SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549FORM 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, 2002

                         Commission File Number 33-82034INDIANTOWN 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 FloorBethesda, 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 CorporationPART I  FINANCIAL INFORMATION                                            Page No.

Item 1  Financial Statements:
        Consolidated Balance Sheets as of June 30, 2002 (Unaudited) and
          December 31, 2001...................................................1
        Consolidated Statements of Operations for the
          Three Months and Six Months Ended June 30, 2002 (Unaudited) and
          June 30, 2001 (Unaudited)...........................................3
        Consolidated Statements of Cash Flows for the Six Months Ended
          June  30,  2002  (Unaudited) and June 30, 2001 (Unaudited)..........4
        Notes to Consolidated Financial Statements (Unaudited) ...............5

Item 2  Management's Discussion and Analysis of Financial
        Condition and Results of Operations..................................10

PART II OTHER INFORMATION

Item 5  Other Information....................................................17

Item 6  Exhibits and Reports on Form 8K......................................18

Signatures...................................................................20
PART I
                              FINANCIAL INFORMATION

                  Indiantown Cogeneration, L.P. and Subsidiary
                           Consolidated Balance SheetsAs of June 30, 2002 and December 31, 2001June 30,                December 31,
                            ASSETS                                                  2002                      2001
---------------------------------------------------------------            -----------------------    ---------------------
                                                                                (Unaudited)
CURRENT ASSETS:
     Cash and cash equivalents                                                $           275,943       $          331,956
     Accounts receivable-trade                                                         13,519,140               14,443,374
     Inventories                                                                        1,509,454                  259,282
    Prepaids                                                                            1,402,251                  981,571
     Deposits                                                                             774,950                   44,450
    Investments held by Trustee, including restricted funds
        of $2,778,770 and $2,666,539, respectively
                                                                                        9,153,793                9,572,996
                                                                           -----------------------    ---------------------
               Total current assets                                                    26,635,531               25,633,629
                                                                           -----------------------    ---------------------

INVESTMENTS HELD BY TRUSTEE,
     restricted funds                                                                  15,519,885               15,502,121

DEPOSITS                                                                                  178,279                  171,737

PROPERTY, PLANT & EQUIPMENT:
     Land                                                                               8,582,363                8,582,363
     Electric and steam generating facilities                                         702,215,576              702,175,087
     Less accumulated depreciation                                                  (103,219,808)             (95,613,164)
                                                                           -----------------------    ---------------------
               Net property, plant & equipment                                        607,578,131              615,144,286
                                                                           -----------------------    ---------------------

FUEL RESERVE                                                                            4,184,496                4,059,534

DEFERRED FINANCING COSTS, net of accumulated amortization of
    $45,916,038 and $45,503,768, respectively                                          14,270,870               14,683,148
                                                                           -----------------------    ---------------------

               Total assets                                                   $       668,367,192       $      675,194,455
                                                                           =======================    =====================


 The accompanying notes are an integral part of these consolidated financial statements.
1
Indiantown Cogeneration, L. P. and Subsidiary
                           Consolidated Balance SheetsAs of June 30, 2002 and December 31, 2001June 30,              December 31, 2001
LIABILITIES AND PARTNERS' CAPITAL                                         2002
--------------------------------------------------------------    ---------------------     ----------------------
                                                                      (Unaudited)
CURRENT LIABILITIES:
     Accrued payables/liabilities                                  $         8,237,775       $         11,474,326
     Accrued interest                                                        2,301,728                  2,324,178
     Current portion - First Mortgage Bonds                                 13,013,247                 11,460,407
     Current portion lease payable - railcars                                  369,550                    358,575
                                                                  ---------------------     ----------------------
               Total current liabilities                                    23,922,300                 25,617,486
                                                                  ---------------------     ----------------------

LONG TERM DEBT:
     First Mortgage Bonds                                                  424,824,519                432,107,562
     Tax Exempt Facility Revenue Bonds                                     125,010,000                125,010,000
     Lease payable - railcars                                                3,398,979                  3,584,963
                                                                  ---------------------     ----------------------
               Total long term debt                                        553,233,498                560,702,525


                                                                  ---------------------     ----------------------
               Total liabilities                                           577,155,798                586,320,011
                                                                  ---------------------     ----------------------

PARTNERS' CAPITAL:
    Toyan Enterprises                                                       27,409,026                 26,706,773
    Palm Power Corporation                                                   9,121,138                  8,887,444
    Indiantown Project Investment Partnership                               18,196,673                 17,730,450
    Thaleia                                                                 36,484,557                 35,549,777
                                                                  ---------------------     ----------------------
                                                                  ---------------------     ----------------------
               Total partners' capital                                      91,211,394                 88,874,444
                                                                  ---------------------     ----------------------

               Total liabilities and partners' capital             $       668,367,192       $        675,194,455
                                                                  =====================     ======================

 The accompanying notes are an integral part of these consolidated financial statements.
2
Indiantown Cogeneration, L.P. and SubsidiaryConsolidated Statements of OperationsFor the Three Months and Six Months Ended June 30, 2002 and June 30, 2001Three Months Ended     Three Months Ended      Six Months Ended     Six Months Ended
                                                           June 30, 2002           June 30, 2001          June 30, 2002       June 30, 2001
                                                      ------------------------ ---------------------- -------------------- ---------------------
Operating Revenues:                                         (Unaudited)             (Unaudited)         (Unaudited)           (Unaudited)
     Electric capacity and capacity bonus
           revenue                                           $28,314,901             $31,094,750          $56,657,977           $62,184,339
     Electric energy revenue                                  11,629,295              14,083,618           25,517,849            29,301,115
     Steam revenue                                                61,389                  41,973              146,801               193,464
                                                              ----------             -----------          -----------           -----------
         Total operating revenues                             40,005,585              45,220,341           82,322,627            91,678,918
                                                              ----------             -----------          -----------           -----------
Cost of Sales:
     Fuel and ash                                             14,191,410              14,576,635           31,251,274            31,756,822
     Operating and maintenance                                 5,607,592               5,524,469            9,317,642             9,464,929
     Depreciation                                              3,803,373               3,795,635            7,606,644             7,584,872
                                                              ----------              ----------           ----------            ----------
         Total cost of sales                                  23,602,375              23,896,739           48,175,560            48,806,623
                                                              ----------              ----------           ----------            ----------

Gross Profit                                                  16,403,210              21,323,602           34,147,067            42,872,295
                                                              ----------              ----------           ----------            ----------

Other Operating Expenses:
     General and administrative                                  845,128                 985,303            1,605,271             2,361,046
     Insurance and taxes                                       1,726,692               1,672,532            3,447,470             3,306,010
                                                              ----------               ---------            ---------            ----------
         Total other operating expenses                        2,571,820               2,657,835            5,052,741             5,667,056
                                                              -----------              ---------            ---------            ----------

Operating Income                                              13,831,390              18,665,767           29,094,326            37,205,239
                                                              ----------              ----------           ----------            ----------

Non-Operating Income (Expenses):
     Interest expense                                       (13,659,522)            (14,157,857)          (27,328,763)          (28,107,674)
     Interest/Other income (expense)                             296,001                593,150               571,387               979,756
                                                              -----------           ------------         -------------          -----------
         Net non-operating expense                          (13,363,521)            (13,564,707)          (26,757,376)          (27,127,918)
                                                            ------------            ------------         -------------          ------------

Net Income                                                      $467,869              $5,101,060            $2,336,950           $10,077,321
                                                            ============            ============         =============          ============

 The accompanying notes are an integral part of these consolidated financial statements.
3
Indiantown Cogeneration, L.P. and Subsidiary
                      Consolidated Statements of Cash FlowsFor the Six Months Ended June 30, 2002 and 2001Six Months                Six Months
                                                                                  Ended                     Ended
                                                                                June 30,                  June 30,
                                                                                  2002                      2001
                                                                           --------------------     ----------------------
                                                                               (Unaudited)               (Unaudited)

    CASH FLOWS FROM OPERATING ACTIVITIES:
         Net income                                                         $        2,336,950       $         10,077,321
             Adjustments to reconcile net income to net
                cash provided by operating activities:
                   Depreciation and amortization                                     8,018,742                  7,997,150
                   Loss on disposal of assets                                                -                    203,032
                   Decrease in accounts receivable                                     924,234                    113,983
                   (Increase) in inventories and fuel reserves                     (1,375,134)                  (269,012)
                   (Increase) in deposits and prepaids                             (1,157,722)                  (952,269)
               (Decrease) increase in accounts payable, accrued
              liabilities and accrued interest                                     (3,259,001)                  3,631,959
                   (Decrease) in lease payable                                       (175,009)                  (162,822)
                                                                           --------------------     ----------------------
                           Net cash provided by operating activities                 5,313,060                 20,639,342
                                                                           --------------------     ----------------------

    CASH FLOWS FROM INVESTING ACTIVITIES:
            Purchase of property, plant & equipment                                   (40,309)                  (743,264)
            Decrease (increase) in investment held by trustee                          401,439                  (661,496)
                                                                           --------------------     ----------------------
                       Net cash provided by (used in) investing
                      activities                                                       361,130                (1,404,760)
                                                                           --------------------     ----------------------

    CASH FLOWS FROM FINANCING ACTIVITIES:
            Payment of bonds                                                       (5,730,203)                (5,570,448)
            Capital distribution                                                             -               (12,400,000)
                                                                           --------------------     ----------------------
                           Net cash used in financing activities                   (5,730,203)               (17,970,448)

    CHANGE IN CASH AND CASH EQUIVALENTS                                               (56,013)                  1,264,134
    CASH and CASH EQUIVALENTS, beginning of year                                       331,956                    821,955
                                                                           --------------------     ----------------------

    CASH and CASH EQUIVALENTS, end of period                                $          275,943       $          2,086,089
                                                                           ====================     ======================

                         The accompanying notes are an integral part of these consolidated financial statements.
4
Indiantown Cogeneration, L.P. and Subsidiary
                   Notes to Consolidated Financial Statements
                               As of June 30, 2002
                                   (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,  own 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. In September 2001, Caulkins sold its processing plant
to Louis Dreyfus Citrus, Inc. ("LDC").

         

     The  original  general  partners  were  Toyan  Enterprises   ("Toyan"),   a
California corporation and a wholly owned special purpose indirect subsidiary of
PG&E  National  Energy  Group,  Inc.  ("NEG,  Inc.") 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  Generating
Company,  Inc. ("Bechtel  Generating") 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% limited  partnership  interest from TIFD and TIFD's
membership  on the Board of Control.  On November  24, 1999,  Thaleia  purchased
TIFD's remaining limited partner interest in the Partnership from TIFD. On April
29,  2002,  Cogentrix  and Aquila,  Inc.  ("Aquila")  entered  into a definitive
agreement  for Aquila  (through  certain  subsidiaries)  to  acquire  all of the
outstanding common stock of Cogentrix (the "Aquila Merger  Agreement").  Also on
April 29, 2002,  Cogentrix and certain of its wholly-owned  subsidiaries entered
into an asset  purchase  agreement  with General  Electric  Capital  Corporation
("GECC") to acquire several of Cogentrix's QF interests, including its interests
in the Partnership ("GECC Purchase Agreement"). On August 2, 2002, Cogentrix and
Aquila agreed to terminate the Aquila Merger Agreement. Consequently,  Cogentrix
and GECC have also terminated the GECC Purchase Agreement.5
The net profits and losses of the  Partnership  are currently  allocated to
Toyan,  Palm,  IPILP, and Thaleia  (collectively,  the "Partners")  based on the
following ownership percentages:Toyan          30.05%
                                Palm           10%*
                                IPILP          19.95%
                                Thaleia        40%*
*Now beneficially owned by Cogentrix.

         

     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 21, 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  National  Energy  Group  Company
("NEG"), formerly known as PG&E 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").  NEG and PG&E OSC are general  partnerships  indirectly  wholly
owned  by  NEG,   Inc.,  an  indirect   wholly  owned   subsidiary  of  PG&E
Corporation.

         

     In December 2000, and in January and February  2001,  PG&E  Corporation
and NEG completed a corporate restructuring that involved the use or creation of
limited  liability  companies  ("LLCs") as intermediate  owners between a parent
company  and its  subsidiaries.  One of these LLCs is PG&E  National  Energy
Group,  LLC,  which owns 100% of the stock of NEG. After the  restructuring  was
completed,  two  independent  rating  agencies,  Standard and Poor's and Moody's
Investor  Services issued  investment  grade ratings for NEG and reaffirmed such
ratings for certain NEG subsidiaries. On April 6, 2001, Pacific Gas and Electric
Company (the "Utility"),  another  subsidiary of PG&E  Corporation,  filed a
voluntary  petition  for relief under the  provisions  of Chapter 11 of the U.S.
Bankruptcy Code. Pursuant to Chapter 11 of the U.S. Bankruptcy Code, the Utility
retains  control of its assets and is  authorized  to operate its  business as a
debtor-in-possession  while being subject to the  jurisdiction of the Bankruptcy
Court. On September 20, 2001, the Utility and PG&E Corporation jointly filed
a plan of reorganization  that entails separating the Utility into four distinct
businesses.  The plan of  reorganization  does not directly affect NEG or any of
its  subsidiaries.  Subsequent to the bankruptcy  filing,  the investment  grade
ratings  of NEG were  reaffirmed  on  April 6 and 9,  2001.  On July  31,  2002,
Standard and Poor's  downgraded NEG, Inc. to BB+ with  CreditWatch with negative
implications  from  BBB  with a stable  outlook.  On  August  5,  2002,  Moody's
downgraded  NEG,  Inc.  to Ba2 from  Baa2 and  maintained  its  negative  rating
outlook.  Neither  agency took any ratings  action with respect to the rating of
the Partnership's  debt. NEG's management believes that the credit agency action
will have no impact on the  financial  condition or results of operations of the
Partnership.  In addition, NEG's management believes that NEG and its direct and
indirect  subsidiaries,  including the  Partnership,  would not be substantively
consolidated   with  PG&E   Corporation  in  any  insolvency  or  bankruptcy
proceeding involving PG&E Corporation or the Utility.
6

2.     BASIS OF PRESENTATION:

         

     The  consolidated  balance sheet as of June 30, 2002, and the  consolidated
statements of  operations  and cash flows for the six months ended June 30, 2002
and 2001, 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, 2002, and the results
of operations and cash flows for the six months ended June 30, 2002 and 2001.

         

     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, 2001.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 $3,000,000 is also held
in long-term assets in the accompanying balance sheets.7
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.Derivative Financial Instruments

         

     The Partnership adopted SFAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities"("SFAS No. 133"), as amended by SFAS Nos. 137 and 138, on
January 1, 2001.  This  standard  requires  the  Partnership  to  recognize  all
derivatives,  as defined in the statements listed above, on the balance sheet at
fair value.  Derivatives,  or any portion thereof, that are not effective hedges
must be adjusted to fair value  through  income.  If  derivatives  are effective
hedges,  depending  on the  nature of the  hedges,  changes in the fair value of
derivatives  either will  offset the change in fair value of the hedged  assets,
liabilities,  or firm  commitments  through  earnings,  or will be recognized in
other comprehensive  income, a component of partners' capital,  until the hedged
items are  recognized  in  earnings.  The  Partnership  has  certain  derivative
commodity  contracts for the physical  delivery of purchase and sale  quantities
transacted in the normal course of business.  Since these activities  qualify as
normal purchase and sale activities,  the Partnership has not recorded the value
of the related contracts on its balance sheet, as permitted under the standards.

         

        In December 2001, the FASB approved an interpretation issued by the
Derivatives Implementation Group ("DIG") that changes the definition of normal
purchases and sales for certain power contracts. Based on the Partnership's
current analysis, the power contract with FPL is a derivative, but qualifies as
a normal purchase and sales exemption, thus is exempt from the requirements of
SFAS No. 133 and is not reflected on the balance sheet at fair value. The FASB
has also approved another DIG interpretation that disallows normal purchases and
sales treatment for commodity contracts (other than power contracts) that
contain volumetric variability or optionality. Based on the Partnership's
current analysis, the commodity contracts held by the Partnership are exempt
from the requirements of SFAS No. 133.
8
Adoption of New Accounting Pronouncements

         

     In  June  2001,   the  FASB  issued  SFAS  No.  141,   entitled,   Business
Combinations.  This  statement  prohibits  the  use of the  pooling-of-interests
method of accounting for business combinations initiated after June 30, 2001 and
applies to all business  combinations  accounted  for under the purchase  method
that are completed after June 30, 2001. This statement was adopted on January 1,
2002,  and did not have an impact on the  Partnership's  consolidated  financial
statements.

         

     Also in June 2001,  the FASB issued SFAS No. 142,  entitled,  Goodwill  and
Other Intangible Assets. This statement eliminates the amortization of goodwill,
and requires goodwill to be reviewed periodically for impairment. This statement
also requires the useful lives of previously  recognized intangible assets to be
reassessed and the remaining  amortization  periods to be adjusted  accordingly.
This statement is effective for fiscal years  beginning after December 15, 2001,
for all goodwill and other  intangible  assets  recognized on the  Partnership's
consolidated  balance  sheets at that date,  regardless  of when the assets were
initially recognized. This statement was adopted on January 1, 2002, and did not
have an impact on the Partnership's consolidated financial statements.

         

     In August 2001, the FASB issued SFAS No. 144, entitled,  Accounting for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 supercedes  SFAS No.
121,  entitled,  Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived Assets to be Disposed of, but retains its fundamental  provisions for
recognizing and measuring  impairment of long-lived  assets to be held and used.
This  statement  also requires that all  long-lived  assets to be disposed of by
sale are  carried  at the lower of  carrying  amount or fair  value less cost to
sell, and that depreciation should cease to be recorded on such assets. SFAS No.
144 standardizes the accounting and presentation requirements for all long-lived
assets to be disposed of by sale, superceding previous guidance for discontinued
operations of business  segments.  This  statement is effective for fiscal years
beginning  after  December 15, 2001.  This  statement  was adopted on January 1,
2002,  and did not have an impact on the  Partnership's  consolidated  financial
statements.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, 2002 and  December  31,
2001,  estimated  present  value of this  deposit  was  $178,279  and  $171,737,
respectively.  The remaining  balance has been included in property  plant,  and
equipment as part of total construction expenses.
9
In 2002, deposits totaling $710,000 have been paid to General Electric
Energy Services for stator bars and long shelf items to perform full repairs to
the generator during the 2002 fall scheduled outage.4.   DEBT SERVICE RESERVE LETTER OF CREDIT:

         

     The  Partnership  entered into a debt service  reserve letter of credit and
reimbursement  agreement,  dated  as of  November  1,  1994,  with  BNP  Paribas
(formerly  known as Banque  Nationale de Paris) pursuant to which a debt service
reserve letter of credit in the amount of approximately  $60 million was issued.
On January 11, 1999, in accordance with the Partnership's  financing  documents,
the debt  service  reserve  letter of credit was  reduced to  approximately  $30
million.  BNP Paribas  notified the Partnership on May 18, 2001 of its intention
not to extend the term of the  agreement,  which  expires on November  22, 2005.
Pursuant to the terms of the  Disbursement  Agreement,  available cash flows are
required to be deposited on a monthly  basis  beginning on May 22, 2002 into the
Debt Service Reserve Account or the Tax Exempt Debt Service Reserve Account,  as
the case may be, until the required Debt Service Reserve Account Maximum Balance
is achieved,  which is $29,925,906.  No funds have been deposited as of June 30,
2002.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.Cautionary Statement Regarding Forward-Looking Statements

         

     Certain   statements   included  herein  are   forward-looking   statements
concerning the  Partnership's  operations,  economic  performance  and financial
condition.  Such  statements  are  subject to various  risks and  uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors,  including  general  business  and economic  conditions;  the
performance of equipment;  levels of dispatch;  the receipt of certain  capacity
and other fixed payments; and electricity prices.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, 2002, the Partnership had approximately $607.6 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, 2002, the Partnership had total operating  revenues of  approximately  $82.3
million,  total operating costs of  approximately  $53.2 million,  and total net
interest  expenses of  approximately  $26.8 million,  resulting in net income of
approximately $2.3 million.
10
The Partnership's fuel supplier is in bankruptcy. Please see Part II,
Item 5, Other Information, for a description of the bankruptcy and the
Partnership's actions in respect of the bankruptcy.

         

        The Partnership has obtained all material environmental permits and
approvals required as of June 30, 2002, 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.Results of Operations

         

     For the six months ending June 30, 2002 and 2001, the Facility  achieved an
average Capacity Billing Factor ("CBF") of 89.79% and 98.91%, respectively.  The
CBF  measures  the overall  availability  of the  Facility,  but gives a heavier
weighting to on-peak availability. The lower CBF in 2002 resulted from decreased
availability  in the fall of 2001  primarily  caused  by boiler  tube  leaks and
repairs to the  generator,  which required the Facility to be out of service for
eleven days. For the six months ended June 30, 2002 and 2001, respectively, this
resulted in earning  monthly  capacity  payments  aggregating  $56.7 million and
$56.6 million. In addition to the monthly capacity payments,  the Partnership is
entitled  to  capacity  bonus  payments  if the CBF,  at the end of each  month,
exceeds  certain  levels.  Since  the  CBF was  below  these  levels  due to the
decreased  availability  in the fall of 2001, no bonus has been received in 2002
compared to $5.6 million in the same period in 2001.
         

     During the six months ended June 30, 2002,  the Facility was  dispatched by
FPL and generated 1,159,324  megawatt-hours compared to 1,259,288 megawatt-hours
during the same period in 2001. The decrease in 2002 was due to a unit outage to
repair condenser tube leaks and for a scheduled two week outage in 2002 compared
to only a scheduled one week outage in 2001.  The monthly  dispatch rate for the
first six months of 2002  ranged  from 78% to 94%, as compared to a range of 89%
to 95% for the corresponding period in 2001.

         

        Net income for the six months ended June 30, 2002, was approximately
$2.3 million compared to the net income of approximately $10.1 million for the
corresponding period in the prior year. The $7.8 million decrease is primarily
attributable to not receiving monthly capacity bonus payments of $5.6 million in
2002 due to the lower CBF resulting from decreased availability in the fall of
2001. Additionally, there was a decrease in net energy margins of $3.3 million.
This was due in part to higher costs of coal of $2.0 million under the amended
contract for coal supply (see Part II, Item 5, Coal Supplier Bankruptcy). The
energy margins were narrowed also because of a decrease in the index used to
adjust quarterly the mine coal component of the unit energy cost in the Power
Purchase Agreement ("PPA") with FPL. This index decrease reduced energy revenue
by $1.6 million, but was offset by reduced ash disposal and lime costs of $0.3
million as a result of lower mega-watt generation. Offsetting these variances is
a decrease in general and administrative costs of $0.8 million and a decrease in
net non-operating expenses of $0.3 million.
11
Net income for the three months ended June 30, 2002 was approximately
$0.5 million compared to the net income of approximately $5.1 million for the
corresponding period in the prior year. The $4.6 million decrease is primarily
attributable to not receiving monthly capacity bonus payments of $2.8 million in
2002 and lower electric energy revenue of $2.4 due to a lower price per
megawatt-hour and lower mega-watt generation. This is offset by lower interest
expense in 2002 of $0.5 million.Operating Revenues
For the six months ended
                                           June 30, 2002          June 30, 2001

Revenues                                  $   82.3 million      $  91.7 million
KWhs                                         1,159,324,000        1,259,288,000
Average Capacity Billing Factor                     89.79%               98.91%
Average Dispatch Rate                               87.65%               91.38%
For the six months ended June 30, 2002, the Partnership had total operating
revenues of  approximately  $82.3  million as compared to $91.7  million for the
corresponding  period in the prior year. The $9.4 million  decrease in operating
revenue is primarily due to lower energy revenue  resulting from the decrease in
the index used to adjust  the unit  energy  cost paid by FPL and from  decreased
capacity   bonus  payments  due  to  the  lower  CBF  resulting  from  decreased
availability primarily caused by boiler tube leaks and repairs to the generator.Cost of Sales

         

     Costs of sales for the six months ended June 30, 2002,  were  approximately
$48.2  million on sales of 1,159,324  MWhs as compared to $48.8 million on sales
of 1,259,288  MWhs for the  corresponding  period in the prior year. The overall
cost of fuel and ash decreased $0.5 million due to lower dispatch  causing lower
fuel consumption; however, the cost per ton of coal increased as a result of the
amended coal purchase  agreement,  resulting in a  disproportionate  decrease in
fuel and ash costs as compared to the lower dispatch.  There was also a decrease
in operating and maintenance costs of $0.1 million.
12
Non-Operating Income (Expense)

         

     Net  interest  expense  for  the  six  months  ended  June  30,  2002,  was
approximately $26.8 million compared to $27.1 million for the same period in the
prior  year.  June 2002 and  December  2001  payments on Series A-9 of the first
mortgage bonds decreased  interest expense by approximately  $0.8 million.  This
was offset by reduced interest income earned of $0.4 million in 2002 as compared
to the  corresponding  period in 2001 due to lower rates on investments  held by
the trustee.Liquidity and Capital Resources

         

     Net cash provided by operating activities for the six months ended June 30,
2002 was  approximately  $5.3  million  as  compared  to $20.6  million  for the
corresponding  period in 2001. The decrease is primarily driven by the reduction
in net income,  a decrease in 2002 in accrued  liabilities for a payment of 2001
property taxes processed in March 2002, and the effect of coal invoices paid net
ten days after  receipt of each  shipment in  accordance  with the amended  coal
purchase  agreement.  Previously,  coal  invoices  were paid  twenty  days after
receipt of each  invoice for all coal loaded for delivery  during the  preceding
month.

         

     Net cash provided by investing activities for the six months ended June 30,
2002 was  approximately  $0.4 million primarily due to a decrease in investments
held by the trustee, partially offset by capital expenditures.  This compares to
an increase in net cash used for investing  activities  for the six months ended
June  30,  2001 of  approximately  $1.4  million  primarily  driven  by  capital
expenditures and an increase in investments held by the trustee.

         

     Net cash used in  financing  activities  for the six months  ended June 30,
2002 and 2001 was $5.7  million  and  $18.0  million,  respectively.  A  capital
distribution of $12.4 million was made in 2001;  however,  no distributions were
made in 2002.

         

     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 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.13
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, 2002
were $769  million.  The equity loan of $139  million was repaid on December 26,
1995. As of June 30, 2002,  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
As of June 30, 2002,  the  Partnership  has made  semi-annual  installments
totaling  $28,404,234  for the A-9  series,  which does not fully  mature  until
December 15, 2010.

         

     The weighted  average interest rate paid by the Partnership on its debt for
the  six  months  ended  June  30,  2002  and  2001,   was  9.202%  and  9.197%,
respectively.

         

     The Partnership,  pursuant to certain of the Project Contracts, is required
to post letters of credit,  which, in the aggregate,  will have a face amount of
no more than $65  million.  Certain of these  letters of credit have been issued
pursuant to a Letter of Credit and  Reimbursement  Agreement  with Credit Suisse
and the  remaining  letters of credit  will be issued  when  required  under the
Project Contracts,  subject to conditions contained in such Letter of Credit and
Reimbursement  Agreement. As of June 30, 2002, no drawings have been made on any
of these letters of credit. The Letter of Credit and Reimbursement Agreement has
a term of seven years subject to extension at the  discretion of the banks party
thereto.  In September  2001,  Credit  Suisse  notified the  Partnership  of its
intention not to extend the term of these agreements, which are due to expire in
the fourth  quarter of 2002.  The current  amount of these  letters of credit is
$13.1 million,  which, if not renewed 30 days prior to expiration,  will convert
into  letter of credit  loans.  The  Partnership  hopes to obtain a  replacement
letter of credit provider before the current letters of credit expire,  although
there are no assurances the Partnership will be successful.
14
The  Partnership  entered into a debt service  reserve letter of credit and
reimbursement  agreement,  dated  as of  November  1,  1994,  with  BNP  Paribas
(formerly  known as Banque  Nationale de Paris) pursuant to which a debt service
reserve letter of credit in the amount of approximately  $60 million was issued.
On January 11, 1999, in accordance with the Partnership's  financing  documents,
the debt  service  reserve  letter of credit was  reduced to  approximately  $30
million,  which,  together  with  cash  in the  debt  service  reserve  account,
represents the maximum remaining  semi-annual debt service on the First Mortgage
Bonds and the 1994 Tax Exempt Bonds. BNP Paribas notified the Partnership on May
18, 2001 of its intention not to extend the term of the agreement, which expires
on  November  22,  2005.  Pursuant to the terms of the  Disbursement  Agreement,
available  cash flows are required to be deposited on a monthly basis  beginning
on May 22,  2002 into the Debt  Service  Reserve  Account or the Tax Exempt Debt
Service  Reserve  Account,  as the case may be, until the required  Debt Service
Reserve Account Maximum Balance is achieved, which is $29,925,906. No funds have
been  deposited  as of  June  30,  2002.  The  Partnership  hopes  to  obtain  a
replacement  letter of  credit  provider  before  the  current  letter of credit
expires.

         

     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.  In  September  2001,  Credit  Suisse  notified  the
Partnership  of its  intention  not to extend the term of the  agreement,  which
expired  on  November  22,  2001.  The  Partnership  is  actively   engaging  in
discussions with other financial  institutions to obtain another working capital
facility.  The  Partnership  believes  that  it  has  adequate  cash  flow  from
operations to timely fund all of its working capital,  capital  expenditures and
major maintenance  requirements even if no replacement  working capital facility
is obtained.

         

     See  Report  on Form 10-K  dated  December  31,  2001 for  qualitative  and
quantitative disclosures about market risk regarding the fair value of debt.Accounting Principles Issued But Not Yet Adopted

         

     In August 2001, the Financial  Accounting  Standards  Board ("FASB") issued
Statement of Financial  Accounting  Statements ("SFAS") No. 143, "Accounting for
Asset  Retirement  Obligations."  This  statement is effective  for fiscal years
beginning after June 15, 2002. SFAS No. 143 provides accounting requirements for
obligations associated with the retirement of tangible long-lived assets and the
associated asset  retirement  costs.  Under the statement,  the asset retirement
obligation  is  recorded  at fair value in the period in which it is incurred by
increasing the carrying amount of the related long-lived asset. The liability is
accreted to its present value in each subsequent period and the capitalized cost
is  depreciated  over the useful life of the related asset.  The  Partnership is
currently  evaluating the impact of SFAS No. 143 on its  consolidated  financial
statements.
15
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." This statement  eliminates the current  requirement that gains and
losses on debt  extinguishment  must be classified as extraordinary items in the
income  statement.  Instead,  such  gains  and  losses  will  be  classified  as
extraordinary  items only if they are deemed to be unusual  and  infrequent,  in
accordance with the current GAAP criteria for extraordinary  classification.  In
addition,  SFAS 145 eliminates an inconsistency in lease accounting by requiring
that  modifications  of  capital  leases  that  result  in  reclassification  as
operating  leases be accounted for  consistent  with  sale-leaseback  accounting
rules.  The  statement  also contains  other 46  nonsubstantive  corrections  to
authoritative accounting literature.  The changes related to debt extinguishment
will be effective for fiscal years beginning after May 15, 2002, and the changes
related to lease accounting will be effective for  transactions  occurring after
May 15,  2002.  The  Partnership  does not expect  that  implementation  of this
statement  will  have  a  significant  impact  on  its  consolidated   financial
statements.

         

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities,"  which  addresses  accounting for
restructuring  and similar costs.  SFAS No. 146 supersedes  previous  accounting
guidance,  principally  Emerging Issues Task Force ("EITF") Issue No. 94-3. This
statement  is to  be  applied  prospectively  to  exit  or  disposal  activities
initiated  after December 31, 2002. SFAS No. 146 requires that the liability for
costs  associated  with an exit or  disposal  activity  be  recognized  when the
liability  is incurred.  Under EITF No.  94-3, a liability  for an exit cost was
recognized at the date of a company's  commitment to an exit plan.  SFAS No. 146
also establishes that the liability should initially be measured and recorded at
fair  value.  The  Partnership  does  not  expect  that  implementation  of this
statement  will  have  a  significant  impact  on  its  consolidated   financial
statements.
PART II
                                OTHER INFORMATIONItem 5   OTHER INFORMATIONCoal Supplier Bankruptcy

         

     Indiantown  Cogeneration,  L.P. (Partnership) has a coal purchase agreement
(the "Coal Purchase  Agreement")  with Lodestar  Energy,  Inc. (LEI) pursuant to
which LEI supplies all of the coal for the facility.
16
As previously reported,  on April 27, 2001, an order for relief was entered
in the  Involuntary  Petition  under Chapter 11 of the United States  Bankruptcy
Code with respect to LEI and its parent,  Lodestar Holdings Inc. ("LHI"), in the
U.S. Bankruptcy Court in Lexington,  Kentucky. Since that time, LHI and LEI have
been operating  their business as "debtors in  possession."  On October 3, 2001,
LEI filed a motion with the Bankruptcy Court seeking to reject the Coal Purchase
Agreement. The Partnership and LEI agreed to and executed Amendment No. 3 to the
Coal  Purchase  Agreement  effective  October  16, 2001 (the  "Amendment").  The
principal change effected in the Coal Purchase  Agreement by the Amendment is an
increase  from  $26.632  to  $34.00  per ton in the  base  coal  price  for coal
delivered after October 16, 2001, with a 2% additional increase in the base coal
price  effective  October 16, 2002. The agreement also reduced the amount of ash
the  Partnership  is  required  to  provide  to  LEI.  The   transportation  and
administrative  fees the  Partnership is required to pay remain  unchanged,  but
will  continue  to adjust  in  accordance  with the  terms of the Coal  Purchase
Agreement.  The  Amendment  also  includes  market  price  reopener  provisions,
beginning October 16, 2003.

         

     Other than with respect to developments  that may have a material impact on
the  Partnership  or its  business  operations,  the  Partnership  is  under  no
obligation  nor  does it  intend  to  continuously  provide  updates  of the LEI
bankruptcy  proceedings.  However,  copies  of  all  pleadings  filed  with  the
Bankruptcy  Court are available  from the office of the clerk of the  Bankruptcy
Court.Governmental Approvals

         

     The  Partnership  has  obtained  all  material  environmental  permits  and
approvals  required,  as of June  30,  2002,  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.Newly Appointed Officers

         

     A Board of Control  written  consent in lieu of a meeting  was  executed on
April 1, 2002 for the Partnership.  The following tables set forth the names and
positions of newly appointed officers.
17

Indiantown Cogeneration, L.P.Name                       Position

            John R. Cooper*                 Senior Vice President and Treasurer
            Thomas E. Legro                 Vice President, Controller and
                                            Principal Accounting OfficerIndiantown Cogeneration Funding CorporationName                       Position

             John R. Cooper*                Vice President, Chief Financial
                                            Officer, Treasurer and Principal
                                            Accounting Officer
             Thomas E. Legro                Vice President and Controller
*John R. Cooper has been elected to the additional position of Treasurer,
      
replacing David N. Bassett.

      
Thomas E. Legro is Vice President,  Controller and Chief Accounting  Officer of PG&E
      
National Energy Group,  Inc., an affiliate of the  Partnership,  and has been with PG&E
      
National  Energy Group,  Inc. since July 2001. From January 1994 to June 2001, Mr. Legro
      
was Vice President and Controller of Edison Mission Energy.Item 6   EXHIBITS AND REPORTS ON FORM 8-K

          

        a)   Reports on Form 8-K:

                 

               The Partnership filed a current report on Form 8-K on May 15,
                 
2002, announcing a change of certifying accountants.
18
b)   Exhibits:

      
      Exhibit
         
        No.
              
              
Description

          
99.1
      
Certification  of  P.  Chrisman  Iribe,  President  of  Indiantown  Cogeneration,  L.P.
                
        
and  Indiantown  Cogeneration  Funding Corporation, pursuant to 18 U.S.C. Section 1350.

          
99.2
      
Certification  of Thomas E. Legro,  Vice President,  Controller and Principal  Accounting
                
        
Officer of Indiantown  Cogeneration, L.P., pursuant to 18 U.S.C. Section 1350.

          
99.3
      
Certification  of John R. Cooper,  Vice President,  Treasurer,  Chief  Financial  Officer 
                
        
and Principal  Accounting  Officer of Indiantown Cogeneration Funding Corporation, pursuant to 
                
        
18 U.S.C. Section 1350.
19
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, 2002               __________________________________
                                     Thomas E. Legro
                                     Vice President, Controller and Principal
                                     Accounting Officer


                                     INDIANTOWN COGENERATION FUNDING
                                     CORPORATION
                                     (Co-Registrant)


Date:  August 14, 2002               __________________________________
                                     John R. Cooper
                                     Vice President, Treasurer, Chief Financial
                                     Officer and Principal Accounting Officer
20