SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  For the Quarterly Period Ended June 30, 2000

                         Commission File Number 33-82034

                          INDIANTOWN COGENERATION, L.P.
            (Exact name of co-registrant as specified in its charter)

`Delaware                                    52-1722490
            --------                                    ----------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)



                   Indiantown Cogeneration Funding Corporation
            (Exact name of co-registrant as specified in its charter)

            Delaware                                    52-1889595
            --------                                    ----------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)`

7500 Old Georgetown Road, 13th Floor
                          Bethesda, Maryland 20814-6161
             (Registrants' address of principal executive offices)

                                 (301)-280-6800
              (Registrants' telephone number, including area code)

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 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. [ X ] Yes [ ] No

`Indiantown Cogeneration, L.P.
                   Indiantown Cogeneration Funding Corporation

PART I  FINANCIAL INFORMATION                                               Page
                                                                             No.

Item 1  Financial Statements:

        Consolidated Balance Sheets as of June 30, 2000 (Unaudited) and
               December 31, 1999..............................................1
        Consolidated Statements of Operations for the
               Six Months Ended June 30, 2000 (Unaudited) and June 30, 1999
               (Unaudited)....................................................3
        Consolidated Statements of Cash Flows for the Six Months
               Ended June 30, 2000 (Unaudited) and June 30, 1999
               (Unaudited)....................................................4

        Notes to Consolidated Financial Statements (Unaudited) ...............5

Item 2  Management's Discussion and Analysis
        of Financial Condition and Results of Operations......................8


PART II OTHER INFORMATION

Item 1  Legal Proceedings....................................................12

Item 5  Other Information....................................................14

Item 6  Exhibits and Reports on Form 8K......................................16


Signatures...................................................................17

                                       -i-


                                     PART I
                              FINANCIAL INFORMATION

                          Indiantown Cogeneration, L.P.
                           Consolidated Balance Sheets
                    As of June 30, 2000 and December 31, 1999
                    -----------------------------------------



                                                                                June 30,                   December 31,
                            ASSETS                                                2000                         1999
---------------------------------------------------------------            --------------------        ---------------------
                                                                                (Unaudited)

CURRENT ASSETS:
     Cash and cash equivalents                                             $         1,179,476         $          2,416,997
     Accounts receivable-trade                                                      14,195,106                   13,471,985
     Inventories                                                                     1,170,225                    1,146,017
    Prepaids                                                                         1,160,015                      807,372
     Deposits                                                                           44,450                       44,450
    Investments held by Trustee, including restricted funds
        of $2,741,432 and $2,752,669, respectively
                                                                                     3,549,368                    3,283,909
                                                                           --------------------        ---------------------
               Total current assets                                                 21,298,640                   21,170,730
                                                                           --------------------        ---------------------

INVESTMENTS HELD BY TRUSTEE,
     restricted funds                                                               14,549,425                   14,501,877

DEPOSITS                                                                               153,517                       80,000

PROPERTY, PLANT & EQUIPMENT:
     Land                                                                            8,582,363                    8,582,363
     Electric and steam generating facilities                                      699,955,226                  698,401,089
     Less accumulated depreciation                                                (72,953,072)                 (65,534,397)
                                                                           --------------------        ---------------------
               Net property, plant & equipment                                     635,584,517                  641,449,055
                                                                           --------------------        ---------------------

FUEL RESERVE                                                                         2,079,376                    1,318,099

DEFERRED FINANCING COSTS, net of accumulated amortization of
    $44,266,934 and $43,854,648, respectively
                                                                                    15,919,982                   16,332,268
                                                                           --------------------        ---------------------
               Total assets                                                       $689,585,457                 $694,852,029
                                                                           ====================        =====================`

The accompanying notes are an integral part of these consolidated balance sheets.

                                       1

`Indiantown Cogeneration, L. P.
                           Consolidated Balance Sheets
                    As of June 30, 2000 and December 31, 1999
                    -----------------------------------------



                                                                        June 30,                  December 31,
LIABILITIES AND PARTNERS' CAPITAL                                         2000                        1999
---------------------------------                                ----------------------     -----------------------
                                                                       (Unaudited)

CURRENT LIABILITIES:
     Accrued payables/liabilities                                $          11,881,276      $            7,584,226
     Accrued interest                                                        2,395,902                   2,267,017
     Current portion - First Mortgage Bonds                                 11,337,015                  11,533,135
     Current portion lease payable - railcars                                  319,873                     308,534
     Working Capital Loan                                                    1,202,974                           -
                                                                   --------------------      ----------------------
               Total current liabilities                                    27,137,040                  21,692,912
                                                                   --------------------      ----------------------


LONG TERM DEBT:
     First Mortgage Bonds                                                  449,138,417                 454,708,865
     Tax Exempt Facility Revenue Bonds                                     125,010,000                 125,010,000
     Lease payable - railcars                                                4,112,344                   4,275,166
                                                                   --------------------      ----------------------
               Total long term debt                                        578,260,761                 583,994,031

      Reserve-Major Maintenance                                                      -                     920,536
                                                                   --------------------      ----------------------
               Total liabilities                                           605,397,801                 606,607,479
                                                                   --------------------      ----------------------

PARTNERS' CAPITAL:
    Toyan Enterprises                                                       25,298,390                  26,517,489
    Palm Power Corporation                                                   8,418,765                   8,824,455
    Indiantown Project Investment Partnership                               16,795,438                  17,604,787
    Thaleia                                                                 33,675,063                  35,297,819
                                                                   --------------------      ----------------------
               Total partners' capital                                      84,187,656                  88,244,550

               Total liabilities and partners' capital                    $689,585,457                $694,852,029
                                                                   --------------------      ----------------------
               Capital                                                    $721,268,887                $708,139,691
                                                                   ====================      ======================`

The accompanying notes are an integral part of these consolidated balance sheets.

                                       2

`Indiantown Cogeneration, L.P.
                      Consolidated Statements of Operations
            For the Six Months Ended June 30, 2000 and June 30, 1999
            --------------------------------------------------------


                                                                     Six Months Ended              Six Months Ended
                                                                       June 30, 2000                June 30, 1999
                                                                     ----------------              ----------------
                                                                        (Unaudited)                (Unaudited)

Operating Revenues:
     Electric capacity and capacity bonus revenue                        $61,902,210                  $61,792,499
     Electric energy revenue                                              24,743,970                   14,354,858
     Steam revenue                                                            48,920                       61,026
                                                                      --------------               --------------
         Total operating revenues                                         86,695,100                   76,208,383
                                                                      --------------               --------------

Cost of Sales:
     Fuel and ash                                                         25,697,129                   14,865,879
     Operating and maintenance                                             9,847,441                    8,725,799
     Depreciation                                                          7,574,455                    7,682,245
                                                                      --------------               --------------
         Total cost of sales                                              43,119,025                   31,273,923
                                                                      --------------               --------------

Gross Profit                                                              43,576,075                   44,934,460
                                                                      --------------               --------------
Other Operating Expenses:
     General and administrative                                            2,470,428                    2,076,805
     Insurance and taxes                                                   3,216,646                    3,316,904
                                                                      --------------               --------------
         Total other operating expenses                                    5,687,074                    5,393,709
                                                                      --------------               --------------

Operating Income                                                          37,889,001                   39,540,751
                                                                      --------------               --------------
Non-Operating Income (Expenses):
     Interest expense                                                   (28,707,972)                 (28,847,362)
     Interest/Other income                                                 1,141,541                      931,992
                                                                      --------------               --------------
         Net non-operating expense                                      (27,566,431)                 (27,915,370)
                                                                      --------------               --------------

Income before cumulative effect  of                                       10,322,570                   11,625,381
         change in accounting principle

Cumulative effect of change in accounting principle                          920,536                            -
                                                                      --------------               --------------
Net Income                                                              $11,243,106                  $11,625,381
                                                                      ==============               ==============`

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

                                       3

`Indiantown Cogeneration, L.P.
                     Consolidated Statements of Cash Flows
                For the Six Months Ended June 30, 2000 and 1999
                -----------------------------------------------

                                                                                Six Months                Six Months
                                                                                  Ended                      Ended
                                                                                 June 30,                  June 30,
                                                                                   2000                      1999
                                                                            --------------------     ----------------------
                                                                               (Unaudited)                (Unaudited)


    CASH FLOWS FROM OPERATING ACTIVITIES:
         Net income                                                         $       11,243,106       $          11,625,381
             Adjustments to reconcile net income to net
                cash provided by operating activities:
                   Depreciation and amortization                                     7,987,772                   8,100,914
                   Increase in accounts receivable                                   (723,121)                 (1,242,330)
                   (Increase)decrease inventories and fuel reserves                  (785,485)                   2,123,839
                   Increase in deposits and prepaids                                 (426,160)                   (393,322)
                   Increase in accounts payable, accrued liabilities
                       and accrued interest                                           4,425,934                  2,642,218
                   (Decrease) increase in major maintenance                          (920,536)                     204,390
                       reserve

                   Decrease in lease payable                                         (151,483)                   (140,934)
                                                                            -------------------      ----------------------
                           Net cash provided by operating activities                20,650,027                  22,920,156
                                                                            -------------------      ----------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
            Purchase of property, plant & equipment                                (1,710,949)                 (1,120,205)
            Increase in investment held by trustee                                   (313,005)                   (431,251)
                           Net cash used in investing activities                   (2,023,954)                 (1,551,454)

    CASH FLOWS FROM FINANCING ACTIVITIES:
             Payment of bonds                                                      (5,766,567)                 (4,998,000)
             Capital distributions                                                (15,300,000)                (16,770,000)
             Increase in working capital loan                                        1,202,974                           -
                                                                            -------------------      ----------------------
                           Net cash used in financing activities                  (21,066,567)                (21,768,000)
                                                                            -------------------      ----------------------

    CHANGE IN CASH AND CASH EQUIVALENTS                                            (1,237,521)                   (399,298)
    CASH and CASH EQUIVALENTS, beginning of year                                     2,416,997                   2,419,089
                                                                             ------------------      ----------------------
    CASH and CASH EQUIVALENTS, end of period                                 $       1,179,476       $           2,019,791
                                                                             ==================      ======================`

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

                                       4

Indiantown Cogeneration, L.P.
                   Notes to Consolidated Financial Statements
                               As of June 30, 2000
                                   (Unaudited)

1.  ORGANIZATION AND BUSINESS:

         

     Indiantown  Cogeneration,  L.P. (the  "Partnership")  is a special  purpose
Delaware  limited  partnership  formed on October 4, 1991. The  Partnership  was
formed to develop,  construct,  and operate an approximately  330 megawatt (net)
pulverized  coal-fired  cogeneration  facility  (the  "Facility")  located on an
approximately 240 acre site in southwestern Martin County, Florida. The Facility
produces  electricity for sale to Florida Power &  Light Company ("FPL") and
supplies  steam to Caulkins  Indiantown  Citrus Co.  ("Caulkins")  for its plant
located near the Facility.

         

     The  original  general  partners  were  Toyan  Enterprises   ("Toyan"),   a
California corporation and a wholly owned special purpose indirect subsidiary of
PG&E Generating Company, LLC and Palm Power Corporation ("Palm"), a Delaware
corporation and a special purpose  indirect  subsidiary of Bechtel  Enterprises,
Inc.  ("Bechtel  Enterprises").  The sole limited  partner was TIFD III-Y,  Inc.
("TIFD"),  a special purpose  indirect  subsidiary of General  Electric  Capital
Corporation ("GECC"). During 1994, the Partnership formed its sole, wholly owned
subsidiary,  Indiantown Cogeneration Funding Corporation ("ICL Funding"), to act
as agent for, and co-issuer  with, the  Partnership in accordance  with the 1994
bond  offering.  ICL  Funding has no  separate  operations  and has only $100 in
assets.

         
        In 1998, Toyan consummated transactions with DCC Project Finance Twelve,
Inc.  ("PFT"),  whereby  PFT,  through  a new  partnership  (Indiantown  Project
Investment,  L.P.  ("IPILP"))  with Toyan,  became a new general  partner in the
Partnership.  Toyan is the  sole  general  partner  of  IPILP.  Prior to the PFT
transaction,  Toyan  converted some of its general  partnership  interest into a
limited  partnership  interest such that Toyan now directly holds only a limited
partnership interest in the Partnership. In addition, Bechtel Enterprises,  sold
all of the stock of Palm to a wholly  owned  indirect  subsidiary  of  Cogentrix
Energy,  Inc.  ("Cogentrix").  Palm holds a 10% general partner  interest in the
Partnership.

         
        On June 4, 1999, Thaleia, LLC ("Thaleia"),  a wholly-owned subsidiary of
Palm and indirect  wholly-owned  subsidiary of  Cogentrix,  acquired from TIFD a
19.9%  limited  partner  interest in the  Partnership.  On  September  20, 1999,
Thaleia acquired another 20.0% limited partnership interest from TIFD and TIFD's
membership  on the Board of Control.  On November  19, 1999,  Thaleia  purchased
TIFD's remaining limited partner interest in the Partnership from TIFD.

         
        The net profits and losses of the  Partnership  are  allocated to Toyan,
Palm,  TIFD,  IPILP,  and Thaleia  (collectively,  the "Partners")  based on the
following ownership percentages:

5

`As of             As of                As of             As of                 As of
                 August 21,        October 20,          June 4,           September 20,         November 24,
                 1998              1998                 1999              1999                  1999
                 ----              ----                 ----              ----                  ----


Toyan            30.05%            30.05%               30.05%            30.05%                30.05%
Palm             10%               10%*                 10%*              10%*                  10%*
IPILP            19.95%**          19.95%**             19.95%**          19.95%**              19.95%**
TIFD             40%               40%                  20.1%             .1%                   --
Thaleia          --                --                   19.9%*            39.9%*                40%*`

*Now beneficially owned by Cogentrix.
**PFTs beneficial ownership in the Partnership through IPILP was equal to 10% as of August 21,
1998, and 15% as of November 23, 1998.

The   changes   in   ownership   were  the   subject   of   notices   of
self-recertification of Qualifying Facility status filed by the Partnership with
the Federal Energy Regulatory  Commission on August 20, 1998, November 16, 1998,
June 4, 1999, September 21, 1999, and November 24, 1999.

         
         All  distributions  other than liquidating  distributions  will be made
based on the Partners'  percentage  interest as shown above,  in accordance with
the  project  documents  and at such  times and in such  amounts as the Board of
Control of the Partnership determines.

                The  Partnership is
managed by PG&E Generating Company ("PG&E Gen"),  formerly known as U.S.
Generating Company, pursuant to a Management Services Agreement (the "MSA"). The
Facility is operated by PG&E  Operating  Services Company  ("PG&E OSC"),
formerly known as U.S. Operating Services Company,  pursuant to an Operation and
Maintenance Agreement (the "O&M  Agreement").  PG&E Gen and PG&E OSC
are general  partnerships  wholly-owned by PG&E Generating Company,  LLC, an
indirect wholly-owned subsidiary of PG&E National Energy Group.


2.  FINANCIAL STATEMENTS:

         

        The   consolidated   balance  sheets  as  of  June  30,  2000,  and  the
consolidated  statements of  operations  and cash flows for the six months ended
June 30, 2000 and 1999, have been prepared by the Partnership, without audit and
in accordance  with the rules and  regulations  of the  Securities  and Exchange
Commission. In the opinion of management, these financial statements include all
adjustments  (consisting  only of normal  recurring  adjustments)  necessary  to
present  fairly the financial  position of the  Partnership as of June 30, 2000,
and the results of  operations  and cash flows for the six months ended June 30,
2000 and 1999.

         
        The financial  statements and related notes  contained  herein should be
read in conjunction  with the  Partnership's  Annual Report on Form 10-K for the
year ended December 31, 1999.

6

Investments Held by Trustee

         
        The investments  held by trustee  represent bond and equity proceeds and
revenue funds held by a bond trustee/disbursement agent and are carried at cost,
which  approximates  market.  All funds are invested in either Nations  Treasury
Fund-Class A or other permitted  investments for longer periods. The Partnership
also maintains  restricted  investments  covering a portion of the Partnership's
debt as required by the financing documents. The proceeds include $12,501,000 of
restricted  tax-exempt debt service reserve required by the financing  documents
and are classified as a noncurrent asset on the accompanying balance sheets. The
Partnership  maintains  restricted   investments  covering  a  portion  of  debt
principal and interest payable,  as required by the financing  documents.  These
investments  are classified as current assets in the  accompanying  consolidated
balance  sheets.  A qualifying  facility  ("QF") reserve of $2.0 million is also
held in long term assets in the accompanying balance sheets.

Property, Plant and Equipment

         

        Property, plant and equipment,  which consist primarily of the Facility,
are recorded at actual  cost.  The Facility is  depreciated  on a  straight-line
basis over 35 years,  with a residual  value on the  Facility  approximating  25
percent of the gross Facility costs.

         
        Other property and equipment are  depreciated on a  straight-line  basis
over the estimated  economic or service lives of the respective  assets (ranging
from five to seven  years).  Routine  maintenance  and  repairs  are  charged to
expense as incurred.

Change in Accounting Principle

         
        The Partnership's depreciation is based on the plant being considered as
a single  property  unit.  Certain  components  within  the plant  will  require
replacement  or overhaul  several times within the estimated  life of the plant.
The scheduled major overhaul represented an accrual for anticipated expenditures
for scheduled  significant  replacement and overhaul costs of the Facility.  The
expense was being  recognized  ratably over the scheduled  overhaul cycle of the
related equipment.

         
        The Securities and Exchange  Commission ("SEC") has recently stated that
it objects to the accrue in advance method for scheduled significant replacement
and  overhaul  costs.  The SEC has  asked  the  Accounting  Standards  Executive
Committee  ("AcSEC") to issue  guidance  related to accounting  for these costs,
which will not include the accrue in advance  method.  Prior to the  issuance of
guidance  from the AcSEC,  the SEC has stated  that it will allow  companies  to
recognize  the change from accrue in advance as a cumulative  effect of a change
in accounting principle.  The Partnership has, therefore,  changed its method of
accounting  for  scheduled  major  overhaul  to  the  as  incurred  method.  The
Partnership  has  recognized  a  cumulative  effect  of a change  in  accounting
principle of $920,536 in its financial statements for the period ending June 30,
2000.

New Accounting Pronouncement
         
        In June 1998, the Financial  Accounting  Standards Board issued SFAS No.
133,  "Accounting  for Derivative  Instruments  and Hedging  Activities"  ("SFAS
133").  SFAS 133

7

established accounting and reporting standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging activities.  It requires that entities recognize all
derivative  instruments  as either  assets or  liabilities  in the  statement of
financial  position  and measure  those  instruments  at fair value.  If certain
conditions are met, a derivative may be  specifically  designated as (a) a hedge
of the exposure to changes in the fair value of a recognized  asset or liability
or an unrecognized  firm commitment,  or (b) a hedge of the exposure to variable
cash flows of a forecasted  transaction.  The  Partnership has also entered into
certain other  contracts that may meet the definition of derivative  instruments
under SFAS 133. The  Partnership  is  evaluating  all contracts to determine the
impact on its financial  statements.  SFAS 133, as amended, is effective for the
Partnership in fiscal year 2001.

3.    DEPOSITS:
         
        In  1991,  in  accordance  with  the  Planned  Unit  Development  Zoning
Agreement between the Partnership and Martin County,  the Partnership  deposited
$1,000,000 in trust with the Board of County Commissioners of Martin County (the
"PUD  Trustee").  Income  from  this  trust  will be used  solely  for  projects
benefiting  the community of  Indiantown.  On July 23, 2025,  the PUD Trustee is
required  to return the  deposit  to the  Partnership.  As of June 30,  2000 and
December  31,  1999,  estimated  present  value of this deposit was $153,517 and
$80,000,  respectively.  The  remaining  balance  has been  included in property
plant, and equipment as part of total construction expenses.


Item 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             
CONDITION AND RESULTS OF OPERATIONS

         
        The  following  discussion  should  be  read  in  conjunction  with  the
Consolidated  Financial  Statements  of the  Partnership  and the notes  thereto
included elsewhere in this report.

General
         
        The Partnership is primarily engaged in the ownership and operation of a
non-utility electric generating facility.  From its inception and until December
21, 1995,  the  Partnership  was in the  development  stage and had no operating
revenues or expenses.  On December 22, 1995 the  Facility  commenced  commercial
operation.  As of June 30, 2000, the Partnership had approximately  $636 million
of property,  plant and equipment (net of accumulated  depreciation)  consisting
primarily of purchased  equipment,  construction  related  labor and  materials,
interest  during   construction,   financing  cost,  and  other  costs  directly
associated with the construction of the Facility.  For the six months ended June
30, 2000, the Partnership had total operating  revenues of  approximately  $86.7
million,  total operating costs of $48.8 million, total net interest expenses of
approximately  $27.6  million,  and a cumulative  effect of change in accounting
principle  of $0.9  million,  resulting  in net  income of  approximately  $11.2
million.

8

The  Partnership  is engaged in litigation  with FPL, the  Partnership's
primary source of revenue. Under certain circumstances, an adverse ruling in the
litigation  could have a material adverse effect on the  Partnership's  business
and financial  condition.  Please see Part II Item 1, Legal  Proceedings,  for a
description of the  litigation,  and Part II, Item 5, Other  Information,  for a
description  of the  Partnership's  options  to  mitigate  the risk  posed by an
adverse ruling in such litigation. On July 31, 2000, FPL announced that it would
combine with Entergy Corp. The combination remains subject to many contingencies
and regulatory  approvals and the Partnership can not determine what impact,  if
any, such combination would have on the Partnership or its business.

         
        The  Partnership  has obtained all  material  environmental  permits and
approvals  required as of June 30, 2000,  in order to continue the  operation of
the  Facility.  Certain of these  permits and  approvals are subject to periodic
renewal. Certain additional permits and approvals will be required in the future
for the continued operation of the Facility. The Partnership is not aware of any
technical  circumstances  that would  prevent the  issuance of such  permits and
approvals or the renewal of currently existing permits.

         
        The Partnership timely filed its application for a Title V air permit on
May 24, 1996. The permit was issued on October 11, 1999.

Results of Operations

         
        For the six months ending June 30, 2000 and 1999, the Facility  achieved
an average  Capacity  Billing Factor of 99.06% and 100.92%,  respectively.  This
resulted in earning  monthly  capacity  payments  aggregating  $56.3 million and
$56.2 million and bonuses aggregating $5.6 million for the six months ended June
30, 2000 and 1999,  respectivley.  The  Capacity  Billing  Factor  measures  the
overall  availability of the Facility,  but gives a heavier weighting to on-peak
availability.  During  the six months  ended June 30,  2000,  the  Facility  was
dispatched by FPL and  generated  1,079,071  megawatt-hours  compared to 616,585
megawatt-hours  during the same period in 1999.  The  increase was due to higher
oil and gas prices  incurred  by FPL during  the first and  second  quarters  to
generate energy from its facilities. The monthly dispatch rate for the first six
months of 2000  ranged from 62% to 96%, as compared to a range of 18% to 67% for
the corresponding period in 1999.

         

        Net income for the six months  ended June 30,  2000,  was  approximately
$11.2 million compared to the net income of approximately  $11.6 million for the
corresponding  period in the prior year. The $0.4 million  decrease is primarily
attributable  to higher net energy  costs of $0.4  million,  higher  general and
administrative  costs of $0.4 million for legal fees for the FPL  litigation and
an  increase  in  operating  and  maintenance  costs of $1.1  million due to the
increase in dispatch.  This is offset by an increase in capacity revenue of $0.1
million,  a reduction in insurance and taxes of $0.1 million,  a decrease in net
non-operating  expenses of $0.4 million, and an expense reversal of $0.9 million
for a cumulative  change in accounting  principle  relating to major maintenance
costs.

9

Electric Energy Revenues

`For the six months ended
                                   June 30, 2000                June 30, 1999
                                   -------------                -------------

Revenues                            $86.7 million               $76.2 million
KWhs                                1,079.1                     616.6
Average Capacity Billing Factor     99.06%                      100.92%
Average Dispatch Rate               80.07%                      43.15%`

For the six  months  ended  June 30,  2000,  the  Partnership  had total
operating  revenues of approximately  $86.7 million as compared to $76.2 million
for the  corresponding  period in the prior year. The $10.5 million  increase in
operating  revenue is primarily  due to higher  energy  revenue  resulting  from
higher dispatch by FPL.
         
        Costs  of  revenues  for  the six  months  ended  June  30,  2000,  were
approximately  $43.1  million on sales of  1,079,071  MWhs as  compared to $31.3
million on sales of 616,585 MWhs for the corresponding period in the prior year.
This  increase  is  primarily  a result  of  higher  fuel and ash costs of $10.8
million and an increase of $1.1 million for  operating  and  maintenance  costs,
both resulting from higher dispatch.
         

        Total other  operating  expenses for the six months ended June 30, 2000,
were  approximately  $5.7  million  compared to the $5.4  million of total other
operating  expenses  for the  corresponding  period in the prior year.  The $0.3
million increase is due primarily to higher general and administrative  expenses
for legal expenses for the FPL litigation.
         

        Net  interest  expense  for the six  months  ended  June  30,  2000,  of
approximately  $27.6 million  compared to $27.9 million of net interest  expense
for the same period in the prior year.

Liquidity and Capital Resources
         
        On  November  22, 1994 the  Partnership  and ICL  Funding  issued  first
mortgage  bonds in an  aggregate  principal  amount of $505  million (the "First
Mortgage Bonds"), $236.6 million of which bear an average interest rate of 9.26%
and $268.4  million of which bear an interest rate of 9.77%.  Concurrently  with
the  Partnership's  issuance  of its First  Mortgage  Bonds,  the Martin  County
Industrial  Development Authority issued $113 million of Industrial  Development
Refunding  Revenue  Bonds  (Series  1994A) which bear an interest rate of 7.875%
(the "1994A Tax Exempt  Bonds").  A second  series of tax exempt  bonds  (Series
1994B) in the approximate amount of $12 million,  which bear an interest rate of
8.05%,  were issued by the Martin  County  Industrial  Development  Authority on
December 20, 1994 (the "1994B Tax Exempt Bonds" and, together with the 1994A Tax
Exempt Bonds,  the "1994 Tax Exempt  Bonds").  The First  Mortgage Bonds and the
1994 Tax Exempt Bonds are hereinafter collectively referred to as the "Bonds."
         

        Certain proceeds from the issuance of the First Mortgage Bonds were used
to repay $421 million of the  Partnership's  indebtedness and financing fees and
expenses  incurred in connection with the  development  and  construction of the
Facility and the balance of the

10

proceeds were deposited in various  restricted funds that are being administered
by  an  independent  disbursement  agent  pursuant  to  trust  indentures  and a
disbursement  agreement.  Funds  administered  by such  disbursement  agent  are
invested  in  specified  investments.  These  funds  together  with other  funds
available  to the  Partnership  were being used:  (i) to finance  completion  of
construction,  testing,  and initial operation of the Facility;  (ii) to finance
construction interest and contingency;  and (iii) to provide for initial working
capital.
         

        The  proceeds  of the 1994 Tax  Exempt  Bonds  were used to refund  $113
million principal amount of Industrial  Development  Revenue Bonds (Series 1992A
and Series 1992B) previously issued by the Martin County Industrial  Development
Authority  for the  benefit of the  Partnership,  and to fund,  in part,  a debt
service reserve  account for the benefit of the holders of its tax-exempt  bonds
and to complete construction of certain portions of the Facility.

         

        The Partnership's  total borrowings from inception through June 30, 2000
were $769  million.  The equity loan of $139  million was repaid on December 26,
1995. As of June 30, 2000,  the  borrowings  included $125 million from the 1994
Tax Exempt Bonds and all of the  available  First  Mortgage Bond  proceeds.  The
First Mortgage Bonds have matured as follows:

`Series      Aggregate Principal Amount          Date Matured and Paid
------      --------------------------          ---------------------

A-1               $4,397,000                    June 15, 1996
A-2                4,398,000                    December 15, 1996
A-3                4,850,000                    June 15, 1997
A-4                4,851,000                    December 15, 1997
A-5                5,132,000                    June 15, 1998
A-6                5,133,000                    December 15, 1998
A-7                4,998,000                    June 15, 1999
A-8                4,999,000                    December 15, 1999`

11

issued. This agreement has a rolling term of five years, subject to extension at
the discretion of the banks party thereto.  Drawings on the debt service reserve
letter  of credit  became  available  on the  Commercial  Operation  Date of the
Facility to pay principal and interest on the First Mortgage Bonds, the 1994 Tax
Exempt Bonds and interest on any loans  created by drawings on such debt service
reserve letter of credit.  Cash and other  investments  held in the debt service
reserve  account will be drawn on for the Tax Exempt Bonds prior to any drawings
on the debt service  reserve letter of credit.  As of June 30, 2000, no drawings
have been made on the debt service reserve letter of credit.

         

        In order to provide for the  Partnership's  working  capital needs,  the
Partnership  entered into a Revolving  Credit Agreement with Credit Suisse dated
as of  November 1, 1994.  This  Agreement  has a term of seven years  subject to
extension at the  discretion of the banks party  thereto.  The revolving  credit
agreement has a maximum  available  amount of $15 million and may be drawn on by
the  Partnership  from time to time.  The  interest  rate is based upon  various
short-term indices at the Partnership's option and is determined  separately for
each draw. As of June 30, 2000,  sixteen  working capital loans had been made to
the  Partnership  under the working  capital loan facility.  All but two working
capital loans for a total of approximately $1.2 million were repaid.

PART II
                                OTHER INFORMATION

Item 1     LEGAL PROCEEDINGS

Dispute with FPL
         

          On March 19, 1999, the  Partnership  filed a complaint  against FPL in
the United States District Court for the Middle District of Florida. The lawsuit
stems from a course of action pursued by FPL beginning in the Spring of 1997, in
which FPL purported to exercise its dispatch and control  rights under the Power
Purchase Agreement in a manner which the Partnership believes violated the terms
of the power sales  agreement.  In its complaint,  the Partnership  charges that
such conduct was  deliberately  calculated to cause the Partnership to be unable
to meet the  requirements  to maintain  the  Facility's  status as a  Qualifying
Facility under the Public Utility Regulatory Policies Act of 1978.
         

        The complaint alleges that FPL took the position that if the Facility is
off-line for any reason,  then FPL is under no  obligation to allow the Facility
to reconnect to FPL's system. The original complaint asserted, however, that the
Partnership  specifically and successfully negotiated for a contractual right to
operate  the  Facility  up to 100 MW  ("Minimum  Load") in order to enable it to
cogenerate  sufficient steam to maintain its Qualifying  Facility status.  While
FPL has not disputed that the Partnership  may maintain  Minimum Load operations
if the  Facility  is  delivering  power when FPL  requests  the  Partnership  to
decommit  the  Facility,  the  complaint  states that FPL has  claimed  absolute
discretion  to deny the  Partnership  permission  to reconnect the Facility with
FPL's system.

12

Since the loss of Qualifying  Facility  status may result in an event of
default under the Power Purchase Agreement,  the Partnership must take action to
address  this  matter.   The  Partnership   continues  to  investegate   various
alternatives  to mitigate its QF risk.  These are described under "QF Mitigation
Options" below.

         
        The  complaint  asserted  causes of action  for (i) FPL's  breach of the
Power  Purchase  Agreement,  (ii) FPL's  anticipatory  repudiation  of the Power
Purchase  Agreement,  (iii) breach of the implied  covenant of good faith,  fair
dealing and  commercial  reasonableness  and (iv) a declaratory  judgment by the
court of the  rights of the  parties  under the Power  Purchase  Agreement.  The
Partnership  seeks (a) a  declaratory  ruling that FPL's  actions  constitute  a
breach of the terms of the Power Purchase Agreement and that the Partnership has
the  absolute  right to operate the Facility at Minimum Load (except for reasons
of safety or system  security) at the rates  provided for in the Power  Purchase
Agreement, (b) injunctive relief preventing FPL from further violating the Power
Purchase Agreement,  (c) compensatory  damages and (d) other relief as the court
may deem appropriate.

         

        On April 14,  1999,  FPL filed a  responsive  pleading to the  complaint
including a motion to dismiss two of the four  counts  raised in the  complaint,
raising  certain  affirmative  defenses  and  seeking  declaration  that FPL has
unfettered  dispatch  rights under the Power  Purchase  Agreement.  On April 23,
1999,  FPL filed answer to the counts which were not challenged in the motion to
dismiss.  On May 13, 1999, the Partnership filed its response to FPL's motion to
dismiss and request for declaratory judgement. On May 18, 1999, the Court denied
FPL's  Motion to  Dismiss  in its  entirety.  The  Partnership  filed an amended
complaint  which was accepted on June 17,  1999.  The amended  complaint  simply
consolidated the  Partnership's  claims for breach of contract and breach of the
implied  obligation  of good  faith and fair  dealing  which  was,  in part,  in
response to a recent  federal  court  decision.  FPL moved to dismiss the entire
amended  complaint and the  Partnership  filed its  opposition  papers August 2,
1999.  The Court  granted FPL's motion to dismiss only with respect to the first
count of the  complaint.  The  Partnership  has amended its complaint to address
issues  raised by the Court in its  decision to dismiss  this count.  The second
amended  complaint  which was filed on March 21, 2000, is attached as an exhibit
to the  Partnership's  Annual Report on Form 10-K filed with the  Securities and
Exchange  Commission on March 30, 2000. On April 7, 2000,  FPL filed a motion to
dismiss ICL's second amended  complaint and the Partnership filed its opposition
papers  April 21,  2000.  The Court has not yet ruled on FPL's motion to dismiss
the second  amended  complaint.  The court  approved a temporary  suspension  of
discovery  activities  while FPL and the  Partnership  attempt  to  resolve  the
litigation. The Court has also ordered a mediation session. In addition, a trial
period has been established by the Court in April 2001.
         

        This summary of the Partnership's  complaint against FPL is qualified in
its  entirety  by the  complaint,  which  was  filed  with the  court in  docket
99-317-CIV-ORL-19C.  This summary does not, nor does it purport to,  include all
of the  material  statements  and  claims  made in the  complaint,  and has been
provided solely for the reader's convenience. This summary is not intended to be
relied upon for any purpose without reference to the complaint.

13

Item 5    OTHER INFORMATION

QF Mitigation Options

         

     If the court rules against the  Partnership in the litigation with FPL, the
Facility could lose its QF status,  unless the  Partnership is able to implement
mitigating  action.  Loss of QF status would result in an event of default under
the Power Purchase Agreement and the indenture for the Bonds. Unless cured, such
events of default would have a material adverse effect on the Partnerships
business, results of operation and financial condition.

         
        To  mitigate  the risk of a possible  adverse  ruling by the Court,  the
Partnership  has  analyzed  the  feasibility  of various  options.  The analyses
included the following:

    providing steam to Caulkins for refrigeration
    constructing  a liquid carbon dioxide  production  facility to which the
        Facility would supply steam
    installing  distilled water  production  equipment to which the Facility
        would supply steam
    providing  steam for a facility to dry  chicken  manure at a nearby farm
        for use as a fertilizer
    providing steam to Caulkins to dry orange peels for use in cattle feed
    providing steam to Caulkins for wash-water cooling
    providing  steam or  chilled  water for water  temperature  control at a
        nearby fish farm
    constructing  a cold  storage  food  distribution  center  to which  the
        Facility would supply chilled water
    providing chilled water to a nearby hen house for cooling
    constructing  a lumber  kiln to dry wood  using  steam  provided  by the
        Facility
    providing chilled water to a nearby flour mill for temperature control

         
        The analyses  included an  evaluation  as to whether the steam usage for
these  alternatives would qualify for QF purposes and to determine each option's
feasibility  - whether the option can increase  steam  production on a schedule,
which may include  regulatory  approval,  that would  assure  maintenance  of QF
status at an acceptable cost to the  Partnership.  The Partnership has completed
its  initial  analyses of the  options,  but has not yet  determined  whether to
implement  any option.  The  Partnership  has,  however,  commenced  the lengthy
process of amending its Site  Certification  to allow for a chilled  water plant
and a carbon dioxide facility. The Partnership may defer a decision to implement
any option until a judgment is made in the litigation with FPL. If any option is
implemented,  the Partnership may, subject to the terms of the indenture for the
Bonds,  finance such option with senior secured debt ranking pari passu with the
Bonds.

         
        No assurance can be given that of any option under  consideration or any
other option will finally be determined  to be feasible or that,  even if one or
more  options  are  determined  to be  feasible,  that  such  option(s)  will be
implemented or will result in assuring the maintenance of QF status.

14

Notwithstanding  the 18-day period,  in March of 1999,  during which FPL
prevented   the  Facility  from   reconnecting   to  FPL's  system  and  thereby
cogenerating  qualifying steam, the Partnership  cogenerated steam totaling 6.1%
of  electrical  output in 1999 thereby  exceeding  the  statutorily  required 5%
threshold.

Governmental Approvals
         
        The  Partnership  has obtained all  material  environmental  permits and
approvals  required,  as of June  30,  2000,  in order  to  continue  commercial
operation of the Facility. Certain of these permits and approvals are subject to
periodic renewal.  Certain  additional permits and approvals will be required in
the future for the continued  operation of the Facility.  The Partnership is not
aware of any  technical  circumstances  that would  prevent the issuance of such
permits  and  approvals  or  the  renewal  of  currently  issued  permits.   The
Partnership  timely  filed its  application  for a Title V air permit on May 24,
1996. The permit was issued on October 11, 1999.

         
        On  December  22,  1999,  the  Partnership   submitted  to  the  Florida
Department of Environmental  Protection  ("DEP") a request for amendments to the
Site Certification and an application for modifications of the Site Certificate.
The  amendments to the Site  Certification  are being  provided to inform DEP of
certain  changes to the Facility's  design and operation.  The requests will not
require changes to the Conditions of  Certification  for the Facility and do not
involve significant  environmental  impacts that would require new environmental
permits or approvals. Also submitted was an application for modifications of the
Site Certificate,  which describes other proposed changes to the Facility design
and  operations.  The  modifications  will require  changes to the Conditions of
Certification.  The requests  include  modifications to allow the additions of a
carbon  dioxide  plant and a chilled  water plant,  changes in the cooling water
storage pond  elevation,  and  modifications  of the operation of the pulverized
coal-fired boiler to increase the electric generation output.

         
        The DEP has proposed to modify the conditions of the Site  Certification
to allow  emergency  discharge of cooling  water and process water to conform to
NPDES Permit Number FL0183750, which was issued on January 19, 2000.

Energy Prices
         
        In October 1999, FPL filed with the Florida  Public  Service  Commission
its projections for its 2000-2001 "as available"  energy costs (in this context,
"as available"  energy costs reflect actual energy  production  costs avoided by
FPL resulting from the purchase of energy from the Facility and other Qualifying
Facilities). The projections filed by FPL are lower for certain periods than the
energy prices  specified in the Power  Purchase  Agreement  for energy  actually
delivered by the Facility.  At other times,  the  projections  exceed the energy
prices  specified in the Power Purchase  Agreement.  Should FPL's "as available"
energy cost projections  prove to reflect actual rates, FPL may elect,  pursuant
to its  dispatch  and control  rights over the  Facility  set forth in the Power
Purchase  Agreement,  to run the Facility less frequently or at lower loads than
if the Facility's energy prices were lower than the cost of other energy sources
available to FPL. Since capacity payments under the Power Purchase Agreement are
not affected by FPL's dispatch of the Facility and because capacity payments are
expected  by the  Partnership  to cover all of the  Partnership's  fixed  costs,

15

including debt service,  the  Partnership  currently  expects that, if the filed
projections prove to reflect actual rates, such rates and the resulting dispatch
of  the   Facility   will   not  have  a   material   adverse   effect   on  the
Partnerships  ability to service its debt.  To the extent the  Facility is
not operated by FPL during Caulkins  processing season (November to June),
the Partnership may elect to run the Facility at a minimum load or shut down the
Facility  and run  auxiliary  boilers to produce  steam for  Caulkins in amounts
required  under the  Partnerships  steam  agreement  with  Caulkins.  Such
operations  may result in decreased net operating  income for such periods.  The
Partnership expects that the decrease, if any, will not be material. For the six
months ended June 30, 2000,  FPL has not requested the  Partnership  to decommit
the Facility. The Partnerships election to operate at minimum load has not
had a material  impact on the  Partnership or its financial  condition  although
energy delivered during such operations is sold at reduced prices.

Debt Service Reserve Account
         
        As permitted by the Partnership's financing arrangements,  on August 19,
1998, the  Partnership  requested  that the balance in the Debt Service  Reserve
Account be reduced  to the Debt  Service  Reserve  Account  Required  Balance by
reducing the Debt Service  Reserve  Letter of Credit.  On January 11, 1999,  the
reduction  was  approved.  The Debt  Service  Reserve  Account now  contains the
$29,609,840  Debt  Service  Reserve  Letter of Credit  and  $12,501,000  of cash
(available only as a debt service reserve for the Tax Exempt Bonds).


Item 6    EXHIBITS AND REPORTS ON FORM 8-K
         
        a)    Reports on Form 8-K:
                
            None
         
        b)    Exhibits:

`Exhibit
          No.                                       Description
        -------                                     -----------

          27                                   Financial Data Schedule`

16

SIGNATURE

Pursuant to the requirements 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.

`INDIANTOWN COGENERATION, L.P.
                                      (Co-Registrant)


Date:  August 14, 2000                --------------------------------
                                      John R. Cooper
                                      Vice President and Chief Financial Officer



                                      INDIANTOWN COGENERATION FUNDING
                                      CORPORATION
                                      (Co-Registrant)


Date:  August 14, 2000                --------------------------------
                                      John R. Cooper
                                      Vice President and Chief Financial Officer`