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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



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FORM 10-Q

[X]                Quarterly report pursuant to section 13 or 15(d) of the securities exchange act of 1934

[   ]                Transition report pursuant to section 13 or 15(d) of the securities exchange act of 1934

|                                     |  |                              
|------------------------------------ |  | -----------------------------
|For the Quarter Ended: June 30, 2002 |  | Commission File No. 333-42638

NRG Northeast Generating LLC
(Exact name of Registrant as specified in its charter)

|                                                                                                 |  |                                                
|------------------------------------------------------------------------------------------------ |  | -----------------------------------------------
|Delaware
(State or other jurisdiction
of incorporation or organization)                          |  | 41-1937472
(I.R.S. Employer
Identification No.)
|                                                                                                 |  |                                                
|901 Marquette Avenue, Suite 2300
Minneapolis, Minnesota
(Address of principal executive offices) |  | 55402
(Zip Code)                               

(612) 373-5300
(Registrants telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X   No      

The Registrant meets the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.





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TABLE OF CONTENTS



|                            |                                              |                                            |  |  |  |  |  | 
|--------------------------- | -------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|                            |                                              | CONSOLIDATED STATEMENT OF OPERATIONS      
|                            |                                              | CONSOLIDATED BALANCE SHEET                
|                            |                                              | CONSOLIDATED STATEMENT OF MEMBERS EQUITY 
|                            |                                              | CONSOLIDATED STATEMENT OF CASH FLOWS      
|                            |                                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                            | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS
|Part II  OTHER INFORMATION
|                            | ITEM 1  Legal Proceedings                  
|                            | ITEM 6. Exhibits and Reports on Form 8-K    
|SIGNATURES                 



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TABLE OF CONTENTS

INDEX

|           |  |                                                                                                                          |  |         
|---------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | --------
|           |  |                                                                                                                          |  | Page No.
|Part I     |  |                                                                                                                          |  |         
|           |  |                                                                                                                          |  |         
|Item 1     |  | Consolidated Financial Statements and Notes                                                                              |  |         
|           |  |                                                                                                                          |  |         
|           |  | Consolidated Statement of Operations                                                                                     |  | 1       
|           |  |                                                                                                                          |  |         
|           |  | Consolidated Balance Sheet                                                                                               |  | 2       
|           |  |                                                                                                                          |  |         
|           |  | Consolidated Statement of Members Equity                                                                                |  | 3       
|           |  |                                                                                                                          |  |         
|           |  | Consolidated Statement of Cash Flows                                                                                     |  | 4       
|           |  |                                                                                                                          |  |         
|           |  | Notes to Consolidated Financial Statements                                                                               |  | 5       
|           |  |                                                                                                                          |  |         
|Item 2     |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations Results of Operations              |  | 9       
|           |  |                                                                                                                          |  |         
|Item 3     |  | Quantitative and Qualitative Disclosures About Market
Risk (Omitted per general instruction H2 (a) and (b) of
Form 10-Q) |  |        
|           |  |                                                                                                                          |  |         
|Part II    |  |                                                                                                                          |  |         
|           |  |                                                                                                                          |  |         
|Item 1     |  | Legal Proceedings                                                                                                        |  | 12      
|           |  |                                                                                                                          |  |         
|Item 6     |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                                         |  | 13      
|           |  |                                                                                                                          |  |         
|           |  | Cautionary Statement Regarding Forward Looking Information                                                               |  | 14      
|           |  |                                                                                                                          |  |         
|SIGNATURES |  |                                                                                                                          |  | 15      





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NRG NORTHEAST GENERATING LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS

|                             |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |         |  
|---------------------------- | ----------------------------------- | - | ------------------ | ------- | ---------------- | - | ----------- | ------- | ----------- | - | ------ | ------- | - | - | ------ | ------- | -
|                             |                                     |   | Three Months Ended |         | Six Months Ended
|                             |                                     |   | June 30,           |         | June 30,        
|                             |                                     |   | 2002               |         | 2001             |   | 2002        |         | 2001       
|                             |                                     |   |                    |         |                  |   |             |         |            
|                             |                                     |   | (Unaudited)        |         | (Unaudited)      |   | (Unaudited) |         | (Unaudited)
|                             |                                     |   |                    |         |                  |   |             |         |            
|(In thousands)               |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|Operating revenues           |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|                             | Revenues                            |   | $                  | 185,080 |                  |   | $           | 270,819 |             |   | $      | 316,648 |   |   | $      | 546,551 |  
|Operating costs and expenses |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|                             | Operating costs                     |   |                    | 110,518 |                  |   |             | 221,531 |             |   |        | 208,553 |   |   |        | 416,920 |  
|                             | Depreciation                        |   |                    | 13,840  |                  |   |             | 12,332  |             |   |        | 26,151  |   |   |        | 24,315  |  
|                             | General and administrative expenses |   |                    | 7,669   |                  |   |             | 4,927   |             |   |        | 11,341  |   |   |        | 9,108   |  
|                             |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|Operating income             |                                     |   | 53,053             |         |                  |   | 32,029      |         |             |   | 70,603 |         |   |   | 96,208 |        
|Other income (expense)       |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|                             | Other income, net                   |   |                    | 4,811   |                  |   |             | 701     |             |   |        | 5,034   |   |   |        | 1,291   |  
|                             | Interest expense                    |   |                    | (11,111 | )                |   |             | (15,045 | )           |   |        | (26,744 | ) |   |        | (30,336 | )
|                             |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        
|Net income                   |                                     | $ | 46,753             |         |                  | $ | 17,685      |         |             | $ | 48,893 |         |   | $ | 67,163 |        
|                             |                                     |   |                    |         |                  |   |             |         |             |   |        |         |   |   |        |        

See accompanying notes to consolidated financial statements.

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NRG NORTHEAST GENERATING LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET

|                                                                                      |                                              |                                       |                           |         |             |           |              |         |           |           | 
|------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------------------- | ------------------------- | ------- | ----------- | --------- | ------------ | ------- | --------- | --------- | 
|                                                                                      |                                              |                                       |                           |         | June 30,    |           | December 31,
|                                                                                      |                                              |                                       |                           |         | 2002        |           | 2001        
|                                                                                      |                                              |                                       |                           |         |             |           |             
|                                                                                      |                                              |                                       |                           |         | (Unaudited) |          
|                                                                                      |                                              |                                       |                           |         |             |           |             
|(In thousands)                                                                        |                                              |                                       |                           |         |             |           |              |        
|Assets                                                                                |                                              |                                       |                           |         |             |           |              |        
|Current Assets:                                                                       |                                              |                                       |                           |         |             |           |              |        
|                                                                                      | Cash and cash equivalents                    |                                       | $                         |        |             |           | $            | 370     |          
|                                                                                      | Accounts receivable                          |                                       |                           | 78,600  |             |           |              | 56,025  |          
|                                                                                      | Inventory                                    |                                       |                           | 146,321 |             |           |              | 172,215 |          
|                                                                                      | Prepaid expenses                             |                                       |                           | 27,755  |             |           |              | 20,116  |          
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|                                                                                      |                                              |                                       | Total current assets      |         |             | 252,676   |              |         |           | 248,726   | 
|                                                                                      |                                              |                                       |                           |        
|Property, plant & equipment, net of accumulated depreciation of $138,780
and $113,688 |                                              |                                       | 1,399,862                 |         |             |           | 1,403,318    |        
|Deferred finance costs, net of accumulated amortization of $958 and $750              |                                              |                                       | 9,198                     |         |             |           | 9,406        |        
|Derivative instruments valuation  at market                                          |                                              |                                       | 114,913                   |         |             |           | 109,017      |        
|Other assets, net of accumulated amortization of $2,171 and $1,737                    |                                              |                                       | 23,829                    |         |             |           | 24,263       |        
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|                                                                                      |                                              |                                       | Total assets              |         | $           | 1,800,478 |              |         | $         | 1,794,730 | 
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|Liabilities and Members Equity                                                       |                                              |                                       |                           |         |             |           |              |        
|Liabilities:                                                                          |                                              |                                       |                           |         |             |           |              |        
|                                                                                      | Current portion of long-term debt            |                                       | $                         | 71,000  |             |           | $            | 107,000 |          
|                                                                                      | Accounts payable                             |                                       |                           | 272     |             |           |              | 2,550   |          
|                                                                                      | Accounts payable  affiliates                |                                       |                           | 32,307  |             |           |              |        |          
|                                                                                      | Accrued fuel and purchased power expense     |                                       |                           | 13,015  |             |           |              | 27,049  |          
|                                                                                      | Accrued interest                             |                                       |                           | 3,666   |             |           |              | 2,302   |          
|                                                                                      | Bank overdraft                               |                                       |                           | 1,464   |             |           |              |        |          
|                                                                                      | Other accrued liabilities                    |                                       |                           | 41,143  |             |           |              | 41,086  |          
|                                                                                      | Derivative instruments valuation  at market |                                       |                           | 35,212  |             |           |              | 32,504  |          
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|                                                                                      |                                              |                                       | Total current liabilities |         |             | 198,079   |              |         |           | 212,491   | 
|Long-term debt                                                                        |                                              |                                       | 485,500                   |         |             |           | 503,000      |        
|Note payable  affiliate                                                              |                                              |                                       | 30,000                    |         |             |           |             |        
|Other long-term liabilities                                                           |                                              |                                       | 24,391                    |         |             |           | 24,655       |        
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|                                                                                      |                                              |                                       | Total liabilities         |         |             | 737,970   |              |         |           | 740,146   | 
|Commitments and contingencies                                                         |                                              |                                       |                           |         |             |           |              |        
|Members equity                                                                       |                                              |                                       | 1,062,508                 |         |             |           | 1,054,584    |        
|                                                                                      |                                              |                                       |                           |         |             |           |              |        
|                                                                                      |                                              | Total liabilities and members equity |                           | $       | 1,800,478   |           |              | $       | 1,794,730 |          
|                                                                                      |                                              |                                       |                           |         |             |           |              |        

See accompanying notes to consolidated financial statements.

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NRG NORTHEAST GENERATING LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF MEMBERS EQUITY
(Unaudited)

|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|------------------------------------------------------------- |  | -------------- | ------- | ----------- |  | -------------- | ------- | -------- |  | ----------- | ------- | - |  | - | --------- | -
|                                                              |  |                |         |             |  |                |         |          |  | Accumulated |         |   |  |  
|                                                              |  | Member         |         |             |  |                |         | Other    |  | Total      
|                                                              |  | Contributions/ |         | Accumulated |  | Comprehensive  |         | Members
|                                                              |  | Distributions  |         | Net Income  |  | Income         |         | Equity  
|                                                              |  |                |         |             |  |                |         |         
|                                                              |  |                |         |             |  | (In thousands) |         |          |  |            
|Balances at December 31, 2000                                 |  | $              | 788,315 |             |  | $              |        |          |  |             |        |   |  | $ | 788,315   |  
|Net income                                                    |  |                |        |             |  |                | 67,163  |          |  |             |        |   |  |   | 67,163    |  
|Cumulative effect upon adoption of SFAS No. 133               |  |                |        |             |  |                |        |          |  |             | 14,100  |   |  |   | 14,100    |  
|Impact of SFAS No. 133 for the six months ended
June 30, 2001 |  |                |        |             |  |                |        |          |  |             | 107,637 |   |  |   | 107,637   |  
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|Comprehensive income                                          |  |                |         |             |  |                |         |          |  |             |         |   |  |   | 188,900   |  
|Distributions to member, net                                  |  |                | (68,837 | )           |  |                | (67,163 | )        |  |             |        |   |  |   | (136,000  | )
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|Balances at June 30, 2001                                     |  | $              | 719,478 |             |  | $              |        |          |  | $           | 121,737 |   |  | $ | 841,215   |  
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|Balances at December 31, 2001                                 |  | $              | 788,315 |             |  | $              | 158,528 |          |  |             | 107,741 |   |  | $ | 1,054,584 |  
|Net income                                                    |  |                |        |             |  |                | 48,893  |          |  |             |        |   |  |   | 48,893    |  
|Impact of SFAS No. 133 for the six months ended
June 30, 2002 |  |                |        |             |  |                |        |          |  |             | (40,969 | ) |  |   | (40,969   | )
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|Comprehensive income                                          |  |                |         |             |  |                |         |          |  |             |         |   |  |   | 7,924     |  
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  
|Balances at June 30, 2002                                     |  | $              | 788,315 |             |  | $              | 207,421 |          |  | $           | 66,772  |   |  | $ | 1,062,508 |  
|                                                              |  |                |         |             |  |                |         |          |  |             |         |   |  |   |           |  

See accompanying notes to consolidated financial statements.

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NRG NORTHEAST GENERATING LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |          |        |         |  
|------------------------------------------------ | ------------------------------------------------------------------------------------------ | ------------------------------------------ | ---------------------------------------- | ------- | ---------------- | ------- | ----------- | -------- | ------ | ------- | -
|                                                 |                                                                                            |                                            |                                          |         | Six Months Ended
|                                                 |                                                                                            |                                            |                                          |         | June 30,        
|                                                 |                                                                                            |                                            |                                          |         | 2002             |         | 2001       
|                                                 |                                                                                            |                                            |                                          |         |                  |         |            
|                                                 |                                                                                            |                                            |                                          |         | (Unaudited)      |         | (Unaudited)
|                                                 |                                                                                            |                                            |                                          |         |                  |         |            
|(In thousands)                                   |                                                                                            |                                            |                                          |         |                  |         |             |         
|Cash flows from operating activities:            |                                                                                            |                                            |                                          |         |                  |         |             |         
|                                                 | Net income                                                                                 |                                            | $                                        | 48,893  |                  |         | $           | 67,163   |       
|                                                 | Adjustments to reconcile net income to net cash provided
by (used in) operating activities |                                            |                                          |         |                  |         |             |          |       
|                                                 |                                                                                            | Depreciation                               |                                          |         | 26,151           |         |             |          | 24,315 |        
|                                                 |                                                                                            | Amortization of other assets               |                                          |         | 434              |         |             |          | 433    |        
|                                                 |                                                                                            | Amortization of deferred financing costs   |                                          |         | 208              |         |             |          | 208    |        
|                                                 |                                                                                            | Unrealized (loss)/gain on energy contracts |                                          |         | (44,157          | )       |             |          | 37,739 |        
|                                                 |                                                                                            | Changes in assets and liabilities:         |                                          |         |                  |         |             |          |        |        
|                                                 |                                                                                            |                                            | Accounts receivable                      |         |                  | (22,575 | )           |          |        | 89,732  |  
|                                                 |                                                                                            |                                            | Inventories                              |         |                  | 25,894  |             |          |        | (53,374 | )
|                                                 |                                                                                            |                                            | Prepaid expenses                         |         |                  | (7,639  | )           |          |        | (11,990 | )
|                                                 |                                                                                            |                                            | Accounts payable                         |         |                  | (2,278  | )           |          |        | (2,000  | )
|                                                 |                                                                                            |                                            | Accounts payable  affiliates            |         |                  | 32,307  |             |          |        | 54,589  |  
|                                                 |                                                                                            |                                            | Accrued interest                         |         |                  | 1,364   |             |          |        | 11,824  |  
|                                                 |                                                                                            |                                            | Accrued fuel and purchased power expense |         |                  | (14,034 | )           |          |        | 7,189   |  
|                                                 |                                                                                            |                                            | Other accrued liabilities                |         |                  | 57      |             |          |        | (10,560 | )
|                                                 |                                                                                            |                                            | Other liabilities                        |         |                  | (264    | )           |          |        | (322    | )
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Net cash provided by operating activities        |                                                                                            |                                            | 44,361                                   |         |                  |         | 214,946     |         
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Cash flows from investing activities:            |                                                                                            |                                            |                                          |         |                  |         |             |         
|                                                 | Proceeds from fixed asset dispositions                                                     |                                            |                                          | 972     |                  |         |             |         |       
|                                                 | Capital expenditures                                                                       |                                            |                                          | (23,667 | )                |         |             | (11,467  | )     
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Net cash used in investing activities            |                                                                                            |                                            | (22,695                                  | )       |                  |         | (11,467     | )       
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Cash flows from financing activities:            |                                                                                            |                                            |                                          |         |                  |         |             |         
|                                                 | Distribution to member                                                                     |                                            |                                          |        |                  |         |             | (136,000 | )     
|                                                 | Deferred financing costs                                                                   |                                            |                                          |        |                  |         |             | (198     | )     
|                                                 | Proceeds from note payable  affiliate                                                     |                                            |                                          | 30,000  |                  |         |             |         |       
|                                                 | Bank overdraft                                                                             |                                            |                                          | 1,464   |                  |         |             |         |       
|                                                 | Principal payments on long-term debt                                                       |                                            |                                          | (53,500 | )                |         |             | (45,000  | )     
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Net cash used in financing activities            |                                                                                            |                                            | (22,036                                  | )       |                  |         | (181,198    | )       
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Net increase in cash and cash equivalents        |                                                                                            |                                            | (370                                     | )       |                  |         | 22,281      |         
|Cash and cash equivalents at beginning of period |                                                                                            |                                            | 370                                      |         |                  |         | 2,444       |         
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         
|Cash and cash equivalents at end of period       |                                                                                            | $                                          |                                         |         |                  | $       | 24,725      |         
|                                                 |                                                                                            |                                            |                                          |         |                  |         |             |         

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NRG Northeast Generating LLC (the Company or NRG Northeast), a
wholly-owned indirect subsidiary of NRG Energy, Inc. (NRG), owns electric power
generation plants in the northeastern region of the United States. The Company
was formed for the purpose of financing, acquiring, owning, operating and
maintaining, through its subsidiaries and affiliates; facilities owned by
Arthur Kill Power LLC, Astoria Gas Turbine Power LLC, Connecticut Jet Power
LLC, Devon Power LLC, Dunkirk Power LLC, Huntley Power LLC, Middletown Power
LLC, Montville Power LLC, Norwalk Harbor Power LLC, Oswego Harbor Power LLC and
Somerset Power LLC.

Additional information regarding the Company can be found in NRG Energys
Form 10-K for the year ended December 31, 2001.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with the SEC regulations for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. The accounting
policies followed by the Company are set forth in Item 8  Note 2 to the
Companys financial statements in its annual report on Form 10-K for the year
ended December 31, 2001 (Form 10-K). The following notes should be read in
conjunction with such policies and other disclosures in the Form 10-K. Interim
results are not necessarily indicative of results for a full year.

In the opinion of management, the accompanying unaudited interim financial
statements contain all material adjustments necessary to present fairly the
consolidated financial position of the Company as of March 31, 2002 and
December 31, 2001, the results of its operations for the three and six months
ended June 30, 2002 and 2001, and its cash flows and members equity for the
six months ended June 30, 2002 and 2001.

Certain prior-year amounts have been reclassified for comparative
purposes. These reclassifications had no effect on net income or total members
equity as previously reported.

1.  LONG-TERM DEBT

On February 22, 2000, the Company issued $750 million of senior secured
bonds to refinance short-term project borrowings and for certain other
purposes. The bond offering included three tranches: $320 million with an
interest rate of 8.065% due in 2004; $130 million with an interest rate of
8.842% due in 2015; and $300 million with an interest rate of 9.292% due in
2024. Principal payments are made semi-annually with $107 million due in 2002,
$35 million due in 2003, $38 million due in 2004, and no payments due in 2005
and 2006. The remaining $430 million is due between June 15, 2007 and December
15, 2024. The bonds are jointly and severally guaranteed by each of NRG
Northeasts existing and future subsidiaries. The bonds are secured by a
security interest in NRG Northeasts membership or other ownership interests in
the guarantors and its rights under all intercompany notes between NRG
Northeast and the guarantors. At June 30, 2002, there remain $556.5 million of
outstanding bonds.

On August 7, 2002, NRG Energy, Inc.
senior unsecured debt was downgraded by

 Standard & Poors
Rating Services to B-plus. As
a consequence, NRG is required under the Indenture to replace the corporate guarantee supporting
the six month debt service reserve account with a letter of credit or cash
collateral by August 25, 2002 to avoid an event of default. If NRG Fails to meet this
collateral requirement by August 25, 2002, NRG will have 30 days to either cure
the default or actively work to cure the default, after which the bondholders will have the right
to accelerate the bonds. If 60 days after August 25, 2002 NRG still has not collateralized
the debt service reserve the account, the bondholders will have the right to
accelerate the bonds.

On August 8, 2002, NRG met with several banks
and committed not to collateralize any debt service reserve accounts, including NRG
Northeast Generating, without the prior consent of NRG's lenders. At this time NRG
management believes that its lenders will ultimately consent to the provision of
collateral for NRG Northeast Generating in advance of any potential acceleration of the bonds.

On July 29, 2002, Moodys Investor Service lowered the senior unsecured
debt rating of NRG from Baa3 to B1 and assigned a Senior Implied rating
of Ba3 to NRG. NRG subsidiaries, including NRG Northeast
Generating, NRG South Central Generating LLC and LSP Energy Limited
Partnership, were placed under review for possible downgrade.

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Due to the debt rating downgrade, NRG is no longer eligible to guarantee
the Companys senior secured bonds. The indenture for the senior secured bonds
requires, as a result, that the Company fund the next six months debt service
requirements of $78.2 million. The Company and the lenders are in discussion,
but if this requirement is not waived or deferred, and the Company cannot fund
the debt service requirement, the Company will be in default and the lenders
can exercise their rights under the indenture agreement.

On June 15, 2002, NRG loaned the Company $30 million to fund capital
expenditures. The debt bears interest at the 3 month London Interbank Offered
Rate plus 0.5%. The debt is subordinate to the other long-term debt of the
Company and is subject to the terms and conditions of the senior secured bonds
indenture.

2  Inventory

Inventory consists of spare parts, coal, fuel oil and kerosene and is stated at
the lower of weighted average cost or market.

Inventory consisted of:

|               |       |               |        |                   |  |   |        |         | 
|-------------- | ----- | ------------- | ------ | ----------------- |  | - | ------ | ------- | 
|(In thousands) |       | June 30, 2002 |        | December 31, 2001
|               |       |               |        |                   | 
|Fuel oil       |       | $             | 64,148 |                   |  | $ | 83,857 |        
|Spare parts    |       |               | 59,490 |                   |  |   | 57,901 |        
|Coal           |       |               | 22,062 |                   |  |   | 29,179 |        
|Kerosene       |       |               | 609    |                   |  |   | 1,268  |        
|Other          |       |               | 12     |                   |  |   | 10     |        
|               |       |               |        |                   |  |   |        |        
|               | Total |               | $      | 146,321           |  |   | $      | 172,215 | 
|               |       |               |        |                   |  |   |        |        

3  Property, Plant and Equipment, net

Property, plant and equipment are stated at cost. Depreciation is computed on a
straight-line basis over the following estimated useful lives:

|                                    |  |               
|----------------------------------- |  | --------------
|Facilities, machinery and equipment |  | 25 to 30 years
|Office furnishings and equipment    |  | 3 to 10 years 

Property, plant and equipment consisted of:

|                                    |                                    |               |           |                   |  |   |           |           | 
|----------------------------------- | ---------------------------------- | ------------- | --------- | ----------------- |  | - | --------- | --------- | 
|(In thousands)                      |                                    | June 30, 2002 |           | December 31, 2001
|                                    |                                    |               |           |                   | 
|Facilities, machinery and equipment |                                    | $             | 1,447,613 |                   |  | $ | 1,441,428 |          
|Land                                |                                    |               | 51,920    |                   |  |   | 51,920    |          
|Construction in progress            |                                    |               | 37,650    |                   |  |   | 22,206    |          
|Office furnishings and equipment    |                                    |               | 1,459     |                   |  |   | 1,452     |          
|Accumulated depreciation            |                                    |               | (138,780  | )                 |  |   | (113,688  | )        
|                                    |                                    |               |           |                   |  |   |           |          
|                                    | Property, Plant and Equipment, net |               | $         | 1,399,862         |  |   | $         | 1,403,318 | 
|                                    |                                    |               |           |                   |  |   |           |          

4.  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITY

On January 1, 2001, the Company adopted Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
(SFAS No. 133), as amended by SFAS No. 137 and SFAS No. 138. SFAS No. 133
requires the Company to record all derivatives on the balance sheet at fair
value. Changes in the fair value of non-hedge derivatives are immediately
recognized in earnings. Derivatives that have been designated as hedges of
assets, liabilities or firm commitments, are accounted for using the fair value
method. Changes in the fair value of these instruments are recognized in
earnings as offsets to the

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changes in the fair value of the related hedged assets, liabilities and
firm commitments. Derivatives that have been designated as hedges of forecasted
transactions are accounted for using the cash flow method. Changes in the fair
value of these instruments are deferred and recorded as a component of
accumulated other comprehensive income (OCI) until the hedged transactions
occur and are recognized in earnings. Reclassifications of the deferred gains
and losses are included on the same line of the statement of operations in
which the hedged item is recorded. The ineffective portion of the change in
fair value of a derivative instrument designated as a cash flow hedge is
immediately recognized in earnings. The Company formally assesses both at
inception and at least quarterly thereafter, whether the derivatives used in
hedging transactions are highly effective in offsetting the changes in either
the fair value or cash flows of the hedged item. This assessment includes all
components of each derivatives gain or loss unless otherwise noted. When it is
determined that a derivative ceases to be a highly effective hedge, hedge
accounting is discontinued.

SFAS No. 133 applies to the Companys long-term power sales contracts,
long-term gas purchase contracts and other energy related commodities financial
instruments used to mitigate variability in earnings due to fluctuations in
spot market prices, hedge fuel requirements at generation facilities and
protect investments in fuel inventories. At June 30, 2002, the Company had
derivative contracts extending through December 2006.

Accumulated Other Comprehensive Income

The following table summarizes the effects of SFAS No. 133 on the
Companys Other Comprehensive Income balance as of June 30, 2002:

|                                                                 |                                                   |                    |        |         |                  |      |         |         |   |   |        |         |   |   |         |         |  
|---------------------------------------------------------------- | ------------------------------------------------- | ------------------ | ------ | ------- | ---------------- | ---- | ------- | ------- | - | - | ------ | ------- | - | - | ------- | ------- | -
|                                                                 |                                                   | Three Months Ended |        |         | Six Months Ended |     
|Gains/(Losses)                                                   |                                                   | June 30,           |        |         | June 30,         |     
|(In
thousands)                                                   |                                                   | 2002               |        | 2001    |                  | 2002 |         | 2001    |  
|                                                                 |                                                   |                    |        |         |                  |      |         |         |   |   |        |         |  
|Beginning Balance                                                |                                                   |                    |        |         |                  |      |         |         |   |   |        |         |   |   |         |        
|                                                                 | Unwound from OCI during period:                   |                    | $      | 87,871  |                  |      | $       | 92,386  |   |   | $      | 107,741 |   |   | $       |        |  
|                                                                 | - due to unwinding of previously deferred amounts |                    |        | (79     | )                |      |         | (11,300 | ) |   |        | (3,925  | ) |   |         | (6,100  | )
|                                                                 | Mark to market to hedge contracts                 |                    |        | (21,020 | )                |      |         | 40,651  |   |   |        | (37,044 | ) |   |         | 127,837 |  
|                                                                 |                                                   |                    |        |         |                  |      |         |         |   |   |        |        
|Ending Balance                                                   |                                                   | $                  | 66,772 |         |                  | $    | 121,737 |         |   | $ | 66,772 |         |   | $ | 127,837 |        
|                                                                 |                                                   |                    |        |         |                  |      |         |         |   |   |        |         |  
|Gains/(Losses) expected to unwind from OCI during
next 12 months |                                                   | $                  | 30,041 |         |                  |      |         |         |   | $ | 30,041 |         |   | $ |        |        

During the three and six months ended June 30, 2002, the Company recorded
a loss in OCI of approximately $21.1 million and $41.0 million, respectively,
related to changes in the fair values of derivatives accounted for as hedges.
The net balance in OCI relating to SFAS No. 133 as of June 30, 2002 was a gain
of approximately $66.8 million. The Company expects $30.0 million of the
deferred net gains on derivative instruments accumulated in OCI to be
recognized as earnings during the next twelve months.

Statement of Operations

The following tables summarize the effects of SFAS No. 133 on the
Companys statement of operations for the three month and six
month periods
ended June 30, 2002 (prior year information regarding the
breakout between revenue and operating costs was not available. As
such, all activity is shown as revenue in 2001):

|                |                                      |          |                    |          |                  |      |         |         |   |   |        |        |  |   |         |         |  
|--------------- | ------------------------------------ | -------- | ------------------ | -------- | ---------------- | ---- | ------- | ------- | - | - | ------ | ------ |  | - | ------- | ------- | -
|                |                                      |          | Three Months Ended |          | Six Months Ended
|Gains/(Losses)  |                                      | June 30, |                    | June 30,
|                |                                      |          |                    |          |                 
|(In thousands)  |                                      | 2002     |                    | 2001     |                  | 2002 |         | 2001   
|                |                                      |          |                    |          |                  |      |         |         |  
|Revenues        |                                      | $        | 30,643             |          |                  | $    | (38,900 | )       |   | $ | 34,573 |        |  | $ | (37,700 | )      
|Operating costs |                                      |          | 3,530              |          |                  |      |         |         |   |   | 9,584  |        |  |   |         |        
|                |                                      |          |                    |          |                  |      |         |         |   |   |        |        |  |   |         |        
|                | Total statement of operations impact |          | $                  | 34,173   |                  |      | $       | (38,900 | ) |   | $      | 44,157 |  |   | $       | (37,700 | )
|                |                                      |          |                    |          |                  |      |         |         |   |   |        |        |  |   |         |        

During the three and six months ended June 30, 2002 and 2001, the Company
recognized no gain or loss due to ineffectiveness of commodity cash flow
hedges.

The Companys earnings for the three months ended June 30, 2002 and 2001 were
increased by an unrealized gain of $34.2 million and decreased by an unrealized
loss of $38.9 million, respectively. For the six months ended June 30, 2002
and 2001 the Companys earnings were increased by an unrealized gain of $44.2
million and decreased by an unrealized loss of $37.7 million, respectively,

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associated with changes in the fair value of energy related derivative
instruments not accounted for as hedges in accordance with SFAS No. 133.

5.  REGULATORY ISSUES

New England

On April 26, 2001 the Federal Energy Regulatory Commission (FERC) approved
with a July 2001 implementation date, a change in the energy market bidding
structure in New England from a one part bidding structure with hourly uplift
compensation to a three part bidding system with Net Commitment Period
Compensation (NCPC). Under this three part bidding system, a supplier submits
separate bids for energy, start up costs and no load. Also under this revised
bidding structure, a supplier is guaranteed of receiving an amount at least
equal to the combination of its start up, no load and accepted energy bids over
the course of the day when it is dispatched to run in the energy market. The
impact of this change is that payments for operations dispatched out-of-merit,
or from operations required to relieve transmission congestion are evaluated
over a twenty-four hour period and compensation is paid if the monies received
from the energy market are insufficient to cover the as-bid offer. Previously,
payments for out-of-merit energy was awarded on an hourly basis and therefore
payments received for out-of-merit energy under three part bidding with NCPC
are expected to be lower than under previously single part bid market.

On August 28, 2001, the FERC ruled that a capacity deficiency of $4.87 per
KW per month was appropriate. The deficiency charge acts as a price cap for the
Installed Capacity (ICAP) market because load-serving entities (LSE) that do
not satisfy their ICAP purchase obligation must pay the deficiency charge.
Previous to this ruling, a temporary deficiency charge of $0.17 per KW per
month existed. In the same order, the FERC rejected ISO-NEs proposed
after-the-fact cure period for LSEs ICAP purchase obligation.

Effective May 1, 2002 certain rule changes went into effect which reflect
in part the recommendations made by ISO-NEs market advisor, David Patton. Rule
changes that are intended to improve the efficiency of the price signal for
energy during high load periods include amending eligibility requirements for
resources eligible to set the clearing prices, changes to reserve markets
including the inclusion of Replacement Reserves in the Thirty Minute Operating
Reserve Markets and rules on transaction across the tie lines to New York.

New York

On October 31, 2001, the extension of the New York City mitigation
measures to the real time market and out-of-merit dispatches expired.
Consolidated Edison Company of New York (ConEd) has requested an extension of
the expanded mitigation measures. On November 27, 2001, the FERC denied this
request and directed the NYISO to address the concerns of ConEd in a
comprehensive mitigation filing, which is referenced below. On March 20, 2002,
the NYISO filed its comprehensive mitigation proposal with the FERC. Under the
proposal, the Day-Ahead energy market (DAM) bids of New York City suppliers
would continue to be mitigated under the existing ConEd mitigation rules with
the following changes. Specifically, the DAM bid for each hour, would be
compared to the energy price at the Indian Point 2 bus and if the In-City bid
exceeded the Indian Point 2 price by more than 107%, all of the DAM energy bids
of the supplier would be mitigated to a reference price. The reference price
represents either an average of accepted energy bids in the DAM over the last
thirty days or a level negotiated with the NYISO. Regarding the real-time
energy market (RTM), the NYISO proposal for New York City restricts the ability
of a facility to bid above its reference price according to the level of
congestion In-City. If congestion prohibits energy from being imported into the
City and is also present within the New York City loads pockets, the NYISO
proposal would restrict the ability to bid above the reference price by
approximately two percent. If there is no congestion found in New York City,
the facilities can bid approximately one hundred dollars above its referenced
price. Currently, the New York City mitigation measures only apply in the
day-ahead market. The effect of the expiration of part of these mitigation
measures means that in the real time market and out-of-merit dispatches, the
Companys generating assets in New York City are subject only to the NYISOs
New York state mitigation measures.

On April 30 2002, the automatic mitigation measure for the entire New York
State DAM expired. On May 1, 2002, the FERC approved a NYISO request for
extension of the automatic mitigation procedures until May 31, 2002. The
extension was granted to permit the FERC to consider the NYISOs comprehensive
mitigation proposal noted above. The automatic mitigation measures evaluate a
suppliers bids to determine if (1) the bid exceeds the suppliers historically
accepted bids (over the past 90 days) by more than $100 and (2) that there is
an impact on the state-wide or a portion of the states energy price by more
than $100. If both of these occur, the suppliers energy bid is reduced to the
facilitys historically accepted bids. The impact of the expiration of the
automatic mitigation measures means that the Company and other market
participants have greater flexibility in submitting bids in the DAM.

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The New York energy markets are subject to a price cap of $1,000 per Megawatt
Hour (MWh). This cap will continue indefinitely.

On September 4, 2001, the FERC approved the request of the NYISO to revise
the ICAP market to one based on unforced capacity similar to the capacity
market in the Pennsylvania New Jersey Maryland Interconnection. The change from
a capacity market that is based on ICAP to one based on unforced capacity
requires that certain New York City Capacity requirements be revised to reflect
the change. Under ICAP methodology, ICAP sold by the Company and other New York
City generators was capped at $105 per Kilowatt (KW) year. In the September 4th
order, the FERC increased the price cap to approximately $112 per KW year. Also
in the order the FERC reduced the amount of In-City Capacity an LSE must
purchase by 8.6%. The amount of New York City capacity that can be sold as
unforced capacity is dependent on the availability of the generating assets to
NYISO dispatch instructions. Initially, the FERC reduced the amount of capacity
available from New York City generation by approximately 7.1%. The effect of
these changes is that the capacity price cap is higher while the amount of
capacity an LSE must purchase from New York City generation and the amount of
available New York City generating capacity is reduced.

6. COMMITMENTS AND CONTINGENCIES

Contractual Commitments

During 1999, the
Company acquired the Huntley and Dunkirk generating facilities from
Niagara Mohawk Power Corp. (NiMo). In connection with this acquisition, the Company entered into a
four-year agreement with NiMo that requires the Company to provide to
NiMo pursuant to a predetermined schedule fixed quantities of energy
and capacity at a fixed price.

During 1999, the
Company acquired certain generating facilities from Connecticut Light
and Power Corp (CL&P). The
Company also entered into a four-year standard offer agreement that
requires the Company to provide to CL&P a portion of its load
requirements through the year 2003 at a substantially fixed rate.

During 1999, the
Company acquired the Oswego generating facilities from NiMo and
entered into a 4-year transition power sales contract with NiMo in
order to hedge NiMos transition to market rates. Under the
agreement, NiMo will pay to Oswego Power a fixed monthly price plus
start up fees for the right to claim, at a specified delivery
point(s), the installed capacity of unit 5 and for the right to
exercise an option for an additional 350 MW of installed capacity.

NRG Power Marketing
has entered into a wholesale standard offer service agreement with
Blackstone Valley Electric Company, Eastern Edison Company and
Newport Electric Corporation (collectively the EUA Companies).
Under the agreement, NRG Power Marketing is obligated to provide each
of the EUA Companies with firm all-requirements electric
service, including capacity, energy, reserves, line losses and
related services necessary to serve the aggregate load attributable
to retail customers taking standard offer service. The price the EUA
Companies pay to NRG Power Marketing for each unit of
electricity is a fixed price plus a fuel cost adjustment factor.




ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS

Managements Discussion and Analysis of Financial Condition is omitted per
conditions as set forth in General Instructions H (1) (a) and (b) of Form 10-Q
for wholly owned subsidiaries. It is replaced with managements narrative
analysis of the results of operations as permitted by General Instructions H
(2) (a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).
This analysis will primarily compare the Companys revenue and expense items
for the three and six months ended June 30, 2002 with the three and six months
ended June 30, 2001.

RESULTS OF OPERATIONS

Net income for the three and six months ended June 30, 2002 was $46.8 million
and $48.9 million, an increase of $29.1 million and a decrease of $18.3
million, respectively, compared to the same periods in 2001. These changes
represent an increase of 164% and a decrease of 27.2%, respectively. These
changes were due to the following factors described below.

Operating Revenues

For the three months ended June 30, 2002, the Company had total revenues of
$185.1 million, compared to $270.8 million for the same period in 2001, a
decrease of $85.7 million or 31.6%. The decrease in revenues for the three
months ended June 30, 2002 versus the same period in 2001 is due to a
combination of lower capacity revenues realized of approximately $8.7 million
and a 26% decline in megawatt hour generation compared with the same period in
2001. This decline in generation is attributable to cooler temperatures in the
first two months of the quarter and new regulatory rules that reduced price
volatility and thus unit dispatch opportunities.

For the six months ended June 30, 2002, the Company had total revenues of
$316.6 million, compared to $546.6 million for the same period in 2001, a
decrease of $230.0 million or 42.1%. The decrease in revenues for the six
months ended June 30, 2002 versus the same period in 2001 is due to a
combination of lower capacity revenues realized of approximately $40.7 million
and a 32% decline in megawatt hour generation compared with the same period in
2001. This decline in generation is attributable to an unseasonably warm
winter and cooler spring together with new regulatory rules which reduced price
volatility, particularly in New York City, where the Companys plants sell into
the merchant energy market.

Cost of Operations

Operating costs were $110.5 million for the three months ended June 30, 2002
compared to $221.5 million for the same period in 2001, a decrease of $111.0
million, or 50.1%. Operating costs, as a percentage of operating revenues, were
59.7% for the three months ended June 30, 2002 compared to 81.8% for the same
period in 2001. For the six months ended June 30, 2002, operating costs were
$208.6 million compared to $416.9 million for the same period in 2001, a
decrease of $208.4 million or 50.0%. Operating costs, as a percentage of
operating revenues were 65.9% for the six months ended June 30, 2002 compared
to 76.3% for the same period in 2001. Operating costs primarily consist of
expenses for fuel, plant operations and maintenance and unrealized gains or
losses associated with changes in the fair value of energy related derivative
instruments not accounted for as hedges in accordance with SFAS No. 133. The
decrease in operating costs is primarily due to a reduction in fuel cost due to
a decline in power generation, a general decline in the price of fuel, lower
expenditures on plant maintenance and operations and a $9.6 million favorable
swing in unrealized gains or losses associated with changes in the fair value
of energy related derivative instruments not accounted for as hedges in
accordance with SFAS No. 133.

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Fuel expense for the three months ended June 30, 2002 was $59.5 million
compared to $156.3 million for the same period in 2001, a decrease of $96.8
million or 61.9%. Fuel expense for the three months ended June 30, 2002
represented 32.2% of revenues compared to 57.7% for the same period in, 2001.
Fuel expense included $25.1 million of coal, $26.3 million of natural gas,
$11.6 million of fuel oil, diesel and other related costs, partially offset by
$3.5 million of unrealized gains on energy contracts for the three months ended
June 30, 2002. For the three months ended June 30, 2001, fuel expense included
$28.4 million of coal, $51.9 million of natural gas, $37.1 million of fuel oil,
diesel and other related costs, and $38.9 million of unrealized losses on
energy contracts for the three months ended June 30, 2001. Fuel expense for
the six months ended June 30, 2002 was $105.4 million compared to $294.6
million for same period in 2001, a decrease of $189.2 or 64.2%. Fuel expense
for the six months ended June 30, 2002 represented 33.3% of revenues compared
to 53.9% for the six months ended June 30, 2001. Fuel expense included $48.0
million of coal, $41.1 million of natural gas, $25.9 million of fuel oil,
diesel and other related costs, partially offset by $9.6 million of unrealized
gains on energy contracts for the three months ended June 30, 2002. For the
six months ended June 30, 2001, fuel expense included $64.8 million of coal
$73.9 million of natural gas, $118.2 million of fuel oil, diesel and other
related costs and $37.7 million of unrealized losses on energy contracts for
the six months ended June 30, 2001.

Plant operations and maintenance expense for the three months ended June 30,
2002 was $51.0 million compared to $65.2 million for the same period in 2001, a
decrease of $14.2 million or 21.8%. Plant operations and maintenance expense
for the three months ended June 30, 2002 represented 27.5% of revenue, and
included labor and benefits under operating service agreements of $14.6
million, maintenance parts, supplies and services of $21.0 million and property
taxes and other expense of $15.4 million. Plant operations and maintenance
expense for the three months ended June 30, 2001 represented 24.1% of revenue,
and included labor and benefits under operating service agreements of $17.6
million, maintenance parts, supplies and services of $29.9 million and property
taxes and other expenses of $17.7 million. Plant operations and maintenance
expense for the six months ended June 30, 2002 was 103.1 million compared to
122.3 million for the same period in 2001, a decrease of $19.2 million or
15.7%. Plant operations and maintenance expense for the six months ended June
30, 2002 represented 32.6% of revenue, and included labor and benefits under
operating service agreements of $32.6 million, maintenance parts, supplies and
services of $40.3 million and property taxes and other expenses of $30.2
million. Plant operations and maintenance expense for the six months ended
June 30, 2001 represented 22.4% of revenue, and included labor and benefits
under operating service agreements of $35.7 million, maintenance parts,
supplies and services of $51.5 million and property taxes and other expenses of
$35.1 million.

Depreciation

Depreciation costs were $13.8 million for the three months ended June 30, 2002,
which is an increase of $1.5 million, or 12.2% from the same period in 2001.
Depreciations costs were $26.2 million for the six months ended June 30, 2002,
which is an increase of $1.9 million, or 7.8% from the same period in 2001.
Depreciation expense was primarily related to the acquisition costs of the
facilities, which are being depreciated over twenty-five to thirty years. The
increase in depreciation expense is attributable to additional depreciation on
completed capital projects.

General and Administrative Expenses

General and administrative expenses were $7.7 million for the three months
ended June 30, 2002, compared to $4.9 million for the same period in 2001, an
increase of $2.8 million or 57.1%. General and administrative expenses were
$11.3 million for the six months ended June 30, 2002, compared to $9.1 million
for the same period in 2001, an increase of $2.2 million or 24.5%. General and
administrative expenses include costs for outside legal and other contract
services, payments to NRG Energy for corporate services, expenses related to
office administration, as well as costs for certain employee benefits incurred
under operating service agreements.

Interest Expense

Interest expense for the three months ended June 30, 2002 was $11.1 million
compared to $15.0 million for the three months ended June 30, 2001, a decrease
of $3.9 million or 26.0%. Interest expense for the six months ended June 30,
2002 was $26.7 million compared to $30.3 million for the same period in 2001.
Interest expense relates to the amortization of deferred finance costs and
interest on the senior secured bonds issued on February 22, 2000. The decrease
in interest expense is attributable to a decline in the average principle
amounts outstanding on the senior secured indebtedness.

Other Income

Other income for the three months ended June 30, 2002 was $4.8 million compared
to $0.7 million for the same period in 2001, an

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increase of $4.1 million or 585.7%. Other income for the six months ended June
30, 2002 was $5.0 million compared to $1.3 million for the same period in 2001,
an increase of $3.7 million or 284.6%. The increase in other income is
primarily attributable to receipt of an insurance settlement for $1.5 million
and a refund of transfer tax of $2.9 million related to the acquisition of the
Companys Connecticut assets.

Capital Resources

On July 26, 2002, Standard & Poors Rating Services announced it had
lowered NRGs corporate credit rating to BB. The secured NRG Northeast
Generating LLC bonds were lowered to BB. The senior unsecured bonds of NRG
were lowered to B-plus. All of the NRG debt issues and the
corporate credit rating were placed on credit watch with negative
implications. Standard & Poors ratings are not a recommendation to buy, sell
or hold securities, and each rating should be evaluated independently of any
other rating.

On July 29, 2002, Moodys Investor Service lowered the senior unsecured
debt rating of NRG from Baa3 to B1 and assigned a Senior Implied rating
of Ba3 to NRG. NRG subsidiaries, including NRG Northeast
Generating, NRG South Central Generating LLC and LSP Energy Limited
Partnership, were placed under review for possible downgrade. Moodys ratings
are not a recommendation to buy, sell or hold securities, and each rating
should be evaluated independently of any other rating.

Contract Negotiation

In July 2002, NRG reached a tentative agreement with Connecticut
Light & Power (CL&P) that would result in increased compensation to NRG,
a supplier of CL&Ps wholesale supply agreement. CL&P filed an emergency
petition with the Connecticut Department of Public Utility Control (DPUC)
asking for approval of a shift of wholesale supply agreement revenues,
effective August 1, 2002, through December 31, 2003, that would reallocate 0.7
cents per kilowatt-hour in the wholesale price paid to
existing suppliers. On July 26, 2002, the DPUC denied the request of CL&P for
an emergency letter ruling. On August 9, 2002, NRG Energy
announced that it had reached an agreement with ISO-New England to
keep three units at its Dover station in service. The agreement
expires on September 30, 2003.

New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (the FASB) issued
Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets(SFAS No. 142). SFAS No. 142 requires that goodwill and
intangible assets with indefinite useful lives no longer be amortized but
instead be tested for impairment in accordance with SFAS No. 121, Accounting
for the Impairment of Long-lived Assets and for Long-lived Assets to Be
Disposed Of(SFAS No. 121). Goodwill will no longer be amortized to comply with
the provisions of SFAS No. 142. Instead, goodwill and intangible assets that
will not be amortized should be tested for impairment annually and on an
interim basis if an event occurs or a circumstance changes between annual tests
that may reduce the fair value of a reporting unit below its carrying value. An
impairment test is required to be performed within six months of the date of
adoption, and the first annual impairment test must be performed in the year
the statement is initially adopted. NRG Northeast Generating LLC and its
subsidiaries have adopted the provisions of SFAS No. 142 effective January 1,
2002. No impairments on assets were recorded upon adopting SFAS 142 on January
1, 2002.

In June 2001, FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations(SFAS No. 143). This statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 143 requires an
entity to recognize the fair value of a liability for an asset retirement
obligation in the period in which it is incurred. Upon initial recognition of a
liability for an asset retirement obligation, an entity shall capitalize an
asset retirement cost by increasing the carrying amount of the related
long-lived asset by the same amount as the liability. SFAS No. 143 is effective
for financial statements issued for fiscal years beginning after June 15, 2002.
NRG Northeast has not completed its analysis of SFAS No. 143.

In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets(SFAS No. 144). This statement
addresses financial accounting and reporting for the impairment or disposal of
long-lived assets. SFAS No. 144 retains and expands upon the fundamental
provisions of existing guidance related to the recognition and measurement of
the impairment of long-lived assets to be held and used and the measurement of
long-lived assets to be disposed of by sale. Generally, the provisions of SFAS
No. 144 are effective for financial statements issued for fiscal years
beginning after December 15, 2001. NRG Northeast Generating LLC and its
subsidiaries have adopted SFAS No. 144 effective January 1, 2002. No
impairments were

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recognized as a result of adopting SFAS No. 144 on January 1, 2002.

In April 2002, FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
(SFAS No. 144), that supercedes previous guidance for the reporting of gains
and losses from extinguishment of debt and accounting for leases, among other
things, SFAS No. 145 requires that only gains and losses from the
extinguishment of debt that meet the requirements for classification as
Extraordinary Items, as prescribed in Accounting Practices Board Opinion No.
30, should be disclosed as such in the financial statements. Previous guidance
required all gains and losses from the extinguishment of debt to be classified
as Extraordinary Items. This portion of SFAS No. 145 is effective for fiscal
years beginning after May 15, 2002, with restatement for prior periods
required. In addition, SFAS No. 145 amends SFAS No. 13, Accounting for Leases
(SFAS No. 13), as it relates to accounting by a lessee for certain lease
modifications. Under SFAS No. 13, if a capital lease is modified in such a way
that the change gives rise to a new agreement classified as an operating lease,
the assets and obligation are removed, a gain or loss is recognized and the new
lease is accounted for as an operating lease, the assets and obligation are
removed, a gain or loss is recognized and the new lease is accounted for as an
operating lease. Under SFAS No. 145, capital leases that are modified so the
resulting lease agreement is classified as an operating lease are to be
accounted for under the sale-leaseback provisions of SFAS No. 98, Accounting
for Leases.These provisions of SFAS No. 145 are effective for transaction
occurring after May 15, 2002. SFAS No. 145 will be applied as required.
Adoption of SFAS No. 145 is not expected to have a material impact on the
Company.

Critical Accounting Policies and Estimates

The Company managements discussion and analysis of its financial
condition and results of operations are based upon the Companys consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements and related disclosures in compliance with
generally accepted accounting principles (GAAP) requires the application of
appropriate technical accounting rules and guidance as well as the use of
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. These judgments, in and of themselves,
could materially impact the financial statements and disclosures based on
varying assumptions, which may be appropriate to use. In addition, the
financial and operating environment also may have a significant effect, not
only on the operation of the business, but on the results reported through the
application of accounting measures used in preparing the financial statements
and related disclosures, even if the nature of the accounting policies have not
changed.

On an ongoing basis, the Company evaluates its estimates utilizing
historic experience, consultation with experts and other methods the Company
considers reasonable. In any case, actual results may differ significantly from
the Companys estimates. Any effects on the Companys business, financial
position or results of operations resulting from revisions to these estimates
are recorded in the period in which the facts that give rise to the revision
become known.

Refer to Item 8 Note 2 of the consolidated financial statements of NRG
Northeast Generating LLC Form 10-K for the year ended December 31, 2001 for
additional discussion regarding the Companys critical accounting policies and
estimates.




Part II  OTHER INFORMATION




ITEM 1  Legal Proceedings

Fortistar Capital V. NRG Energy

In July 1999, Fortistar Capital Inc., a Delaware corporation, filed a complaint
in District Court (Fourth Judicial District, Hennepin County) in Minnesota
against NRG asserting claims for injunctive relief and for damages as a
result of NRGs alleged breach of a confidentiality letter agreement
with Fortistar relating to the Oswego facility in New York. NRG disputed
Fortistars allegations and asserted numerous counterclaims, and, in October
1999, NRG, through a wholly-owned subsidiary, closed on the acquisition
of the Oswego facility. In April and December 2000, NRG had summary
judgment motions to dispose of the litigation. A hearing on these motions was
held in February 2001 and certain of Fortistars claims were dismissed. On May
8, 2002 the parties resolved the litigation, pending final agreement on the
terms of settlement. The settlement also encompasses litigation between the
parties with respect to Minnesota Methane LLC. NRG Northeast has no
obligations pursuant to this Settlement Agreement.

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New York Clean Air Act Enforcement Action

In January 2002 the New York Attorney General and the New York Department
of Environmental Conservation (NYDEC) filed suit in the western district of New York
against NRG and Niagara Mohawk Power Corp. (NiMo), the prior owner of
the Huntley and Dunkirk facilities in New York. The lawsuit relates to physical
changes made at those facilities prior to NRGs assumption of ownership.
The complaint alleges that these changes represent major modifications
undertaken without the required permits having been obtained. Although NRG
has a right to indemnification by the previous owner for fines,
penalties, assessments and related losses resulting from the previous owners
failure to comply with environmental laws and regulations, NRG could be
enjoined from operating the facilities if the facilities are found not to
comply with applicable permit requirements. NRG has filed a motion to
dismiss the claims against it.

NYDEC Opacity Notice of Violation

NRG became
part of an opacity consent order negotiation as a result of acquiring
its Huntley, Dunkirk and Oswego plants from Niagara Mohawk. At the
time of financial close on these assets, a consent order was being
negotiated between Niagara Mohawk and the NYDEC; it required Niagara
Mohawk to pay a stipulated penalty for each opacity event at these
facilities. On January 14, 2002, the NYDEC issued NRG Notices
of Violations (NOV) for opacity events, which had occurred since the
time NRG assumed ownership of the Huntley, Dunkirk and Oswego
generating stations. The NOVs allege that a total of 7,231 events had
occurred where the average opacity during a six-minute block of time
had exceeded 20%. The NYDEC proposed a penalty associated with the
NOVs at $900,000.

Station Use Power

On September 21, 2000, Dunkirk, Huntley and Oswego Harbor Power LLC
(Oswego) filed an action before the FERC seeking its declaration that they are
entitled to pay NiMo wholesale prices for the power consumed at their
respective generating facilities, rather than paying for such station power at
retail rates, as NiMo alleges is required. On September 28, 2000, NiMo filed
separate actions against Dunkirk, Huntley and Oswego in the State Supreme Court
of New York, seeking, in total, payment of approximately $7.0 million, which
NiMo asserts is due under such retail tariff. NiMo asserts that the amount now
owed it exceeds $20 million. The FERC rendered a decision on
March 14, 2001, determining that certain types of station use power are not
subject to retail tariffs and granting some relief sought by Dunkirk, Huntley
and Oswego. Legal counsel is evaluating the impact of the ruling on the merits
of the NiMo litigation. The parties in the state court actions have exchanged
written discovery and are engaged in depositions. A tentative trial date has
been set for September 2002.

Constellation Power Source Inc. Agreement

On August 2, 2002, the Company received payment under a net settlement
agreement, of approximately $20 million from Constellation Power Source, Inc.,
through their affiliate, NRG Power Marketing, Inc. The agreement provides for
the termination of a long-term power purchase contract dated February 25, 2002
between Constellation and NRG Power Marketing on the Companys behalf.




ITEM 6.  Exhibits and Reports on Form 8-K

|    |  |                                          
|--- |  | -----------------------------------------
|(A) |  | Exhibits                                 
|    |  |                                          
|    |  | None                                     
|    |  |                                          
|(B) |  | Reports on Form 8-K                      
|    |  |                                          
|    |  | July 25, 2002 re: credit rating downgrade

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Cautionary Statement Regarding Forward-Looking Statements

The information presented in this Form 10-Q includes forward-looking
statements in addition to historical information. These statements involve
known and unknown risks and relate to future events, or projected business
results. In some cases forward-looking statements may be identified by their
use of such words as may, expects, plans, anticipates, believes, and
similar terms. Forward-looking statements are only predications, and actual
results may differ materially from the expectations expressed in any
forward-looking statement. While the Company believes that the expectations
expressed in such forward-looking statements are reasonable, we can give no
assurances that these expectations will prove to have been correct. In addition
to any assumptions and other factors referred to specifically in connection
with such forward-looking statements, factors that could cause actual results
to differ materially from those contemplated in any forward-looking statements
include, among others, the following:



| |  |  | NRG Energys ability to
reach agreements with its lenders and creditors to restructure debt
and delay the funding of collateral required following NRG
Energys, and the Companys, ratings downgrades;                                                                                                                                                                                                                       
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The implementation of the
business plan Xcel Energy put in place for NRG Energy following
completion of the Xcel Energy exchange offer transaction;                                                                                                                                                                                                                                                                           
|
| |  |  | NRG Energys ability to
sell assets in the amounts and on the time table assumed;                                                                                                                                                                                                                                                                                                                                             
|
| |  |  | General economic conditions including inflation rates and monetary exchange rate fluctuations;                                                                                                                                                                                                                                                                                                                                
|
| |  |  | Trade, monetary, fiscal, taxation, and environmental policies of governments, agencies and similar
organizations in geographic areas where we have a financial interest;                                                                                                                                                                                                                                                      
|
| |  |  | Customer business conditions including demand for their products or services and supply of labor and
materials used in creating their products and services;                                                                                                                                                                                                                                                                  
|
| |  |  | Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards
Board, the Securities and Exchange Commission, the Federal Energy Regulatory Commission and similar
entities with regulatory oversight;                                                                                                                                                                               
|
| |  |  | Factors affecting the availability or cost of capital such as changes in: interest rates; market
perceptions of the power generation industry, the Companies or changes in credit ratings;                                                                                                                                                                                                                                    
|
| |  |  | Factors affecting power generation operations such as unusual weather conditions; catastrophic
weather-related damage; unscheduled generation outages, maintenance or repairs; unanticipated changes to
fossil fuel, or gas supply costs or availability due to higher demand, shortages, transportation problems
or other developments; environmental incidents; or electric transmission or gas pipeline system constraints;
|
| |  |  | Employee workforce factors including loss or retirement of key executives, collective bargaining
agreements with union employees, or work stoppages;                                                                                                                                                                                                                                                                          
|
| |  |  | Volatility of energy prices in a deregulated market environment:                                                                                                                                                                                                                                                                                                                                                              
|
| |  |  | Increased competition in the power generation industry;                                                                                                                                                                                                                                                                                                                                                                       
|
| |  |  | Cost and other effects of legal and administrative proceedings, settlements, investigations and claims;                                                                                                                                                                                                                                                                                                                       
|
| |  |  | Technological developments that result in competitive disadvantages and create the potential for
impairment of existing assets;                                                                                                                                                                                                                                                                                               
|
| |  |  | Factors associated with various investments including competition,
         operating risks, dependence on certain suppliers and customers, and
         environmental and energy regulations;                                                                                                                                                                                                                                
|
| |  |  | Other business or investment considerations that may be disclosed from
         time to time in our Securities and Exchange Commission filings or in
         other publicly disseminated written documents including NRG Northeast's
         Registration Statement No. 333-42638, as amended.                                                                                                                              

NRG Northeast undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. The foregoing review of factors that could cause NRG
Northeasts actual results to differ materially from those contemplated in any
forward-looking statements included in this Form 10-Q should not be construed as
exhaustive.

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SIGNATURES

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

|                      |  |                                                                         
|--------------------- |  | ------------------------------------------------------------------------
|                      |  | NRG Northeast Generating LLC
(Registrant)                               
|                     
|                      |  |                                                                         
|                     
|                      |  | /s/ RICHARD C. KELLY
Richard C. Kelly, President                        
|                     
|                      |  |                                                                         
|                     
|                      |  | /s/ C. ADAM CARTE
C. Adam Carte, Treasurer
(Principal Financial Officer)
|                     
|Date: August 14, 2002 |  |                                                                         

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his/her capacity as an officer of
NRG Northeast Generating LLC (the Company), for purposes of 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:



| |  |  | the Quarterly Report of the Company on Form 10-Q for the period
ended June 30, 2002 fully complies with the requirements of      Section
13(a) of the Securities Exchange Act of 1934; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the information contained in such report fairly presents, in
all material respects, the financial condition and results of
operation       of the Company.                                

Dated: August 14, 2002



| |                            
| | ---------------------------
| | /s/ RICHARD C. KELLY       
| | Richard
C. Kelly, President
|
| | /s/ C. ADAM
CARTE          
| | C. Adam
Carte, Treasurer   

15