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


                                    FORM 10-K


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


               For the fiscal year ended December 31, 1998


                                       OR


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


               Exact name of Registrants as specified in
               their charters, State of Incorporation,       IRS Employer
Commission     address of principal executive offices and    Identification
File Number    Registrants' telephone number                 Number
-----------    ------------------------------------------    --------------
33-87902       ESI Tractebel Funding Corp.                   04-3255377
               (a Delaware corporation)
33-87902-02    Northeast Energy Associates,                  04-2955642
               A Limited Partnership
               (a Massachusetts limited partnership)
33-87902-01    North Jersey Energy Associates,               04-2955646
               A Limited Partnership
               (a New Jersey limited partnership)
333-52397      ESI Tractebel Acquisition Corp.               65-0827005
               (a Delaware corporation)
333-52397-01   Northeast Energy, LP                          65-0811248
               (a Delaware limited partnership)
               ------------------------------------------
               c/o FPL Energy, Inc.
               700 Universe Boulevard
               Juno Beach, Florida 33408-2683
               (561) 691-7171

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:
  8.43% Senior Secured Notes due 2000, Series A
  9.16% Senior Secured Notes due 2002, Series A
  9.32% Senior Secured Bonds due 2007, Series A
  9.77% Senior Secured Bonds due 2010, Series A
  7.99% Secured Bonds due 2011, Series B



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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is no contained herein, and will not be contained, to the
best of registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  X

                      ----------------------------------

This combined Form 10-K represents separate filings by ESI Tractebel Funding 
Corp., Northeast Energy Associates, A Limited Partnership, North Jersey 
Energy Associates, A Limited Partnership, ESI Tractebel Acquisition Corp. and 
Northeast Energy, LP. Information contained herein relating to an individual 
registrant is filed by that registrant on its own behalf. Each registrant 
makes representations only as to itself and makes no other representations 
whatsoever as to any other registrant.


DEFINITIONS

Acronyms and defined terms used in the text include the following:

<TABLE>
<CAPTION>
Term                        Meaning
<S>                         <C>
Acquisition Corp.           ESI Tractebel Acquisition Corp.
Act                         Securities Act of 1933, as amended
avoided cost                the incremental cost to an electric utility of electric energy and/or capacity that, but
                              for the purchase from a qualifying facility, such utility would generate itself or
                              purchase from another source
Boston Edison               Boston Edison Company
Broad Street                Broad Street Contract Services, Inc.
Btu                         British thermal units, a unit of energy
Cogeneration                Power production technology that provides for the sequential generation of two or more 
                              useful forms of energy from a single primary fuel source
Commonwealth                Commonwealth Electric Company
ESI Energy                  ESI Energy, Inc.
ESI GP                      ESI Northeast Energy GP, Inc.
ESI LP                      ESI Northeast Energy LP, Inc.
ESI Northeast Acquisition   ESI Northeast Energy Acquisition Funding, Inc.
ESI Northeast Funding       ESI Northeast Energy Funding, Inc.
ESI Northeast Fuel          ESI Northeast Fuel Management, Inc.
ETURC                       ESI Tractebel Urban Renewal Corporation, previously IEC Urban Renewal Corporation
FERC                        Federal Energy Regulatory Commission
FPL                         Florida Power & Light Company
FPL Energy                  FPL Energy, Inc.
FPL Group                   FPL Group, Inc.
FPL Group Capital           FPL Group Capital Inc
FPLE Operating Services     FPL Energy Operating Services, Inc., previously ESI Operating Services, Inc.
Funding Corp.               ESI Tractebel Funding Corp., previously IEC Funding Corp.
IEC                         Intercontinental Energy Corporation, a Massachusetts corporation
JCP&L                       Jersey Central Power & Light
kwh                         kilowatt-hour
Management's Discussion     Item 7. Management's Discussion and Analysis of Financial Condition and Results 
                              of Operations
Montaup                     Montaup Electric Company
MMBtu                       millions of Btu
mw                          megawatt(s)
NE LLC                      Northeast Energy, LLC
NE LP                       Northeast Energy, LP
NEA                         Northeast Energy Associates, A Limited Partnership
NJEA                        North Jersey Energy Associates, A Limited Partnership
NEPOOL                      New England Power Pool
O&M                         operations and maintenance
Partners                    ESI GP and ESI LP together with Tractebel GP and Tractebel LP
Partnerships                NEA together with NJEA
PJM                         Pennsylvania-New Jersey-Maryland power pool
ProGas                      ProGas Limited of Alberta, Canada
PSE&G                       Public Service Electric & Gas of Newark, New Jersey
PURPA                       Public Utility Regulatory Policies Act of 1978, as amended
qualifying facilities       Non-utility power production facilities meeting the requirements of a qualifying 
                              facility under PURPA
Reform Act                  Private Securities Litigation Reform Act of 1995
Rule 144A                   Rule 144A promulgated under the Act
Sanwa                       Sanwa Bank Limited, New York Branch
Tractebel                   Tractebel, Inc.
Tractebel GP                Tractebel Northeast Generation GP, Inc.
Tractebel LP                Tractebel Associates Northeast LP, Inc.
Tractebel Power             Tractebel Power, Inc. 
Trustee                     State Street Bank and Trust Company, a Massachusetts banking corporation
Westinghouse                Siemens Westinghouse Operating Services Company
Westinghouse Power          Siemens Westinghouse Power Corporation

</TABLE>


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT 
OF 1995

In connection with the safe harbor provisions of the Reform Act, the 
Funding Corp., the Partnerships, the Acquisition Corp. and NE LP (all five 
entities collectively, the Registrants) are hereby filing cautionary 
statements identifying important factors that could cause the Registrants' 
actual results to differ materially from those projected in forward-looking 
statements (as such term is defined in the Reform Act) of the Registrants 
made by or on behalf of the Registrants which are made in this combined 
Form 10-K, in presentations, in response to questions or otherwise. Any 
statements that express, or involve discussions as to expectations, 
beliefs, plans, objectives, assumptions or future events or performance 
(often, but not always, through the use of words or phrases such as will 
likely result, are expected to, will continue, is anticipated, estimated, 
projection, outlook) are not statements of historical facts and may be 
forward-looking. Forward-looking statements involve estimates, assumptions 
and uncertainties that could cause actual results to differ materially from 
those expressed in the forward-looking statements. Accordingly, any such 
statements are qualified in their entirety by reference to, and are 
accompanied by, the following important factors that could cause the 
Registrants' actual results to differ materially from those contained in 
forward-looking statement made by or on behalf of the Registrants.

Any forward-looking statement speaks only as of the date on which such 
statement is made, and the Registrants undertake no obligation to update 
any forward-looking statement to reflect events or circumstances after the 
date on which such statement is made or to reflect the occurrence of 
unanticipated events. New factors emerge from time to time and it is not 
possible for management to predict all of such factors, nor can it assess 
the impact of each such factor on the business or the extent to which any 
factor, or combination of factors, may cause actual results to differ 
materially from those contained in any forward-looking statements.

Some important factors that could cause actual results or outcomes to 
differ materially from those discussed in the forward-looking statements 
include changing governmental policies and regulatory actions with respect 
to the Public Utility Regulatory Policies Act of 1978, as amended, 
acquisition and disposal of assets and facilities, operation and 
construction of plant facilities, recovery of fuel and purchased power 
costs, and present or prospective competition.

The business and profitability of the Registrants are also influenced by 
economic and geographic factors including political and economic risks, 
changes in and compliance with environmental and safety laws and policies, 
weather conditions, population growth rates and demographic patterns, 
competition for retail and wholesale customers, pricing and transportation 
of commodities, market demand for energy from plants or facilities, changes 
in tax rates or policies or in rates of inflation, unanticipated 
development project delays or changes in project costs, unanticipated 
changes in operating expenses and capital expenditures, capital market 
conditions, competition for new energy development opportunities, legal and 
administrative proceedings (whether civil, such as environmental, or 
criminal) and settlements, and any unanticipated impact of the year 2000, 
including delays or changes in costs of year 2000 compliance, or the 
failure of major suppliers, customers and others with whom the Registrants 
do business to resolve their own year 2000 issues on a timely basis.

All such factors are difficult to predict, contain uncertainties which may 
materially affect actual results, and are beyond the control of the 
Registrants.


PART I

Item 1.  Business

General.  NE LP, a Delaware limited partnership, was formed on November 21, 
1997 for the purpose of acquiring ownership interests in two partnerships, 
NEA and NJEA, each of which owns an electric power generation station in 
the northeastern United States. NE LP is jointly owned by ESI GP and ESI LP 
(indirect wholly-owned subsidiaries of FPL Energy, which is an indirect 
wholly-owned subsidiary of FPL Group, a company listed on the New York 
Stock Exchange) and Tractebel GP and Tractebel LP (indirect wholly-owned 
subsidiaries of  Tractebel S.A., a Belgian energy and environmental 
services business). NE LP also formed a wholly-owned entity, NE LLC, to 
assist in such acquisitions. On January 14, 1998, NE LP and NE LLC acquired 
all of the interests in the Partnerships from IEC and from certain 
individuals.

The Partnerships were formed in 1986 to develop, construct, own, operate 
and manage the cogeneration facilities. NEA's facility commenced commercial 
operation in September 1991 and is located in Bellingham, Massachusetts. 
NJEA's facility commenced commercial operation in August 1991 and is 
located in Sayreville, New Jersey.

In connection with the acquisition of the Partnerships' interests, the 
Funding Corp. was acquired by a subsidiary of ESI Energy, Tractebel Power 
and Broad Street from IEC. This entity was established in 1994 solely for 
the purpose of issuing debt. This debt was privately issued under Rule 144A 
to acquire outstanding bank debt and to loan funds to the Partnerships and 
was subsequently exchanged for public debt under the Act.

On January 12, 1998, the Acquisition Corp. was formed. The Acquisition 
Corp.'s common stock is jointly owned by a subsidiary of ESI Energy and a 
subsidiary of Tractebel Power. On February 12, 1998, the Acquisition Corp. 
issued $220 million of debt under Rule 144A which was also subsequently 
exchanged for public debt under the Act. The proceeds were loaned to NE LP 
and  then distributed to direct subsidiaries of FPL Energy and Tractebel 
Power. Repayment of the debt is expected from distributions from the 
Partnerships.

None of the Registrants or the Partners have any employees.

See Item 12. Security Ownership of Certain Beneficial Owners and Management 
for interests of ownership.

Partnerships' Operations.  The Partnerships operate in the independent 
power industry. In the United States, regulated electric utilities have 
been the dominant producers and suppliers of electric energy since the 
early 1900s. In 1978, PURPA removed regulatory constraints relating to the 
production and sale of electric energy by certain non-utility power 
producers and required electric utilities to buy electricity from certain 
types of non-utility power producers under certain conditions, thereby 
encouraging companies other than electric utilities to enter the electric 
power production market. The Partnerships were created as a result of the 
PURPA legislation.

Each of the Partnerships owns a nominal 300 mw natural gas-fired combined-
cycle cogeneration facility. The facilities were constructed by 
Westinghouse Power and use natural gas to produce electrical energy and 
thermal energy in the form of steam. The Partnerships were developed and 
are operated as qualifying facilities under PURPA and the regulations 
promulgated thereunder by the FERC. The Partnerships must satisfy certain 
annual operating and efficiency standards and ownership requirements to 
maintain qualifying facility status, which exempts the Partnerships from 
certain federal and state regulations. The Partnerships are, however, not 
exempt from state regulatory commission general supervisory powers relating 
to environmental and safety matters. 

NEA and NJEA sell substantially all of their output to regulated utilities 
under power purchase agreements as follows:

                                      % of              Power Purchase
Power Purchaser            MW         Capacity         Agreement Expiration
NEA:
  Boston Edison           135            45%           September 15, 2016
  Boston Edison            84            28            September 15, 2011
  Commonwealth             25             8            September 15, 2016
  Commonwealth             21             7            September 15, 2016
  Montaup                  25             8            September 15, 2021
  NEA Total               290            96%

NJEA:
  JCP&L                   250            83%           August 13, 2011

The remainder of the net electrical energy produced by NJEA is sold to the 
marketplace either directly to third parties or via FPL's Energy Marketing 
& Trading Division. The power purchase agreements provide for substantially 
continuous delivery of base load power.

Certain of the power purchase agreements require the establishment of 
energy banks to record cumulative payments made by the utilities in excess 
of avoided cost rates scheduled or specified in such agreements. Some of 
the energy banks bear interest at various rates specified in the 
agreements. Upon termination of the agreements, remaining amounts recorded 
in the energy banks will be required to be repaid. Energy bank balances are 
partially secured by letters of credit.

To meet the FERC regulations for a qualifying facility, both NEA and NJEA 
sell at least 5% of the steam produced to unrelated third parties. NEA 
sells its steam to a third party which leases a carbon dioxide facility 
owned by NEA and located on NEA's property. 

Approximately 80% of the natural gas that fuels the Partnerships' 
facilities is supplied pursuant to long-term gas supply agreements with 
ProGas and, in the case of NJEA, also pursuant to a long-term gas supply 
agreement with PSE&G. Gas is transported to, or stored for later use by, 
the Partnerships pursuant to long-term gas transportation and storage 
agreements. The remainder of the daily fuel requirements is satisfied by 
open-market purchases. Price escalators under the long-term gas agreements 
are intended to correlate to the price escalators under the power purchase 
agreements, thereby reducing the risk associated with increases in the 
price of natural gas. ESI Northeast Fuel, an indirect wholly-owned 
subsidiary of FPL Energy, is the fuel manager for the Partnerships and 
provides fuel management and administrative services by contracting with 
FPL's Energy Marketing & Trading Division. This division buys and sells 
wholesale energy commodities, such as natural gas and electric power.

Operations and maintenance of the Partnerships was provided by 
Westinghouse, a subsidiary of Westinghouse Power, through December 31, 
1998. Effective December 31, 1998, the O&M contracts between Westinghouse 
Power and the Partnerships were terminated by mutual consent of both 
parties and the payment of $10 million to Westinghouse. FPLE Operating 
Services, a wholly-owned indirect subsidiary of FPL Energy, became the new 
provider of O&M services for the Partnerships on January 1, 1999. See 
Management's Discussion - Results of Operations.

Seasonality.  The performance of the Partnerships is dependent on ambient 
conditions (principally air temperature, air pressure and humidity), which 
affect the efficiency and capacity of the combined-cycle facilities. 
Payments due to NJEA under the JCP&L power purchase agreement during winter 
and summer season are substantially higher than those in spring and fall. 
Otherwise, the business of the Partnerships is not materially subject to 
seasonal factors.

Competition.  Recent regulatory change has created additional competition 
in the form of wholesale power marketers that engage in purchase and resale 
transactions between power producers and power distributors. This increased 
competition has reduced the price regulated utilities are willing to pay to 
independent power producers for electrical capacity and energy. Although 
substantially all of the Partnerships' output is committed under the power 
purchase agreements described above, these factors may adversely affect 
energy prices under certain power purchase agreements that are tied to the 
actual costs of the purchasing utility, as well as the price NJEA could 
obtain in the open market for excess power sales.

Deregulation.  Both Massachusetts and New Jersey have enacted legislation 
designed to deregulate the production and sale of electricity. By allowing 
customers to choose their electricity supplier, deregulation is expected to 
result in a shift from cost-based rates to market-based rates for energy 
production. Similar initiatives are also being pursued on the federal level. 
Although the legislation varies by state, common areas of focus include when 
market-based pricing will be available for wholesale and retail customers, 
what existing above market costs will be recoverable and the mechanism for 
the recovery of such costs.

The Partnerships operate under two voluntary power pool associations that 
control the transmission of electricity. NEA operates under NEPOOL and NJEA 
operates under PJM. While legislators and state regulatory commissions will 
decide what impact, if any, competitive forces will have on retail 
transactions, the FERC has jurisdiction over potential changes which could 
affect competition in wholesale transactions. The FERC has approved various 
filings submitted by NEPOOL and PJM that further electric industry 
deregulation initiatives.

NE LP and the Partnerships do not expect electric utility industry 
restructuring to result in any material adverse change to prices under the 
Partnerships' power purchase agreements. However, the impact of electric 
utility industry restructuring on the companies that purchase power from 
the Partnerships is uncertain.

Item 2.  Properties

As of December 31, 1998, the Partnerships had the following properties:

        Facility Type                 Location              Principal Use      
NEA cogeneration facility (1)      Bellingham, MA     Power production
NEA carbon dioxide plant (2)       Bellingham, MA     Carbon dioxide production
NEA residential properties (3)     Bellingham, MA     Private residences
NJEA cogeneration facility (2)     Sayreville, NJ     Power production

(1)  Subject to the liens of a first and second mortgage.
(2)  Subject to the lien of a first mortgage.
(3)  NEA owns 12 properties, most with single-family dwellings, located on 
     land immediately adjacent to the facility site. These properties are 
     subject to the lien of a mortgage.

Item 3.  Legal Proceedings

None of the Registrants are involved in any material legal proceedings.


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

None.


PART II

Item 5.  Market for the Registrants' Common Equity and Related Stockholder 
Matters

This item is not applicable for the Registrants.

Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                                                           Years Ended December 31,                
                                                              1998         1997       1996       1995       1994   
                                                                             (Thousands of Dollars)
SELECTED DATA OF NE LP
<S>                                                         <C>          <C>             <C>        <C>         <C>
Operating revenues ......................................   $  302,693   $      -        n/a        n/a         n/a
Net income ..............................................   $   14,098   $      -        n/a        n/a         n/a
Total assets ............................................   $1,410,343   $      -        n/a        n/a         n/a
Long-term debt, excluding current maturities ............   $  665,213   $      -        n/a        n/a         n/a
Amounts due utilities for energy bank balances ..........   $  173,356   $      -        n/a        n/a         n/a

SELECTED DATA OF THE PARTNERSHIPS (a)

Operating revenues ......................................   $   (b)      $312,154   $272,262   $280,549    $238,712
Net income (loss) .......................................   $   (b)      $ 36,673   $  9,924   $ 26,857    $(16,916)
Total assets ............................................   $1,403,045   $541,545   $566,534   $617,034    $650,027
Long-term debt, excluding current maturities ............   $  445,213   $468,724   $490,287   $514,362    $539,566
Amounts due utilities for energy bank balances ..........   $  173,356   $230,565   $220,922   $188,053    $155,496

SELECTED DATA OF THE FUNDING CORP.

Operating revenues ......................................   $        -   $      -   $      -   $      -    $      -
Net income ..............................................   $        -   $      -   $      -   $      -    $      -
Total assets ............................................   $  468,725   $490,288   $514,363   $539,567    $560,145
Long-term debt, excluding current maturities ............   $  445,213   $468,724   $490,287   $514,362    $539,566

SELECTED DATA OF THE ACQUISITION CORP.

Operating revenues ......................................   $        -        n/a        n/a        n/a         n/a
Net income ..............................................   $        8        n/a        n/a        n/a         n/a
Total assets ............................................   $  220,152        n/a        n/a        n/a         n/a
Long-term debt, excluding current maturities ............   $  220,000        n/a        n/a        n/a         n/a

(a)  On January 14, 1998, NE LP and NE LLC acquired all of the interests in the Partnerships from IEC resulting in a
     new basis of accounting by the Partnerships.  (See Note 2 - Summary of Significant Accounting Policies -
     Acquisitions)

(b)  Split period
                                                             1/1 to 1/13      1/14 to 12/31
     Operating revenues .................................        $13,109           $302,693
     Net income  ........................................        $ 2,909           $ 30,000

n/a - not applicable because entities were not in existence.

</TABLE>

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

Results of Operations

NE LP, a Delaware limited partnership, was formed on November 21, 1997 for 
the purpose of acquiring ownership interests in two partnerships, NEA and 
NJEA, each of which owns an electric power generation station in the 
northeastern United States. On January 14, 1998, NE LP acquired all of the 
interests in the Partnerships and the Funding Corp. for approximately $545 
million, including approximately $10 million of acquisition costs. The 
acquisition of the Partnerships was accounted for using the purchase method 
of accounting and was subject to pushdown accounting, which gave rise to a 
new basis of accounting by the Partnerships. During 1998, the Acquisition 
Corp. issued $220,000,000 of 7.99% Secured Bonds Due 2011 to qualified 
institutional buyers as defined in Rule 144A for the purpose of reimbursing 
certain partners of NE LP for a portion of their equity contributions used 
to acquire the Partnerships and the Funding Corp.

Operations and maintenance of the Partnerships was provided by Westinghouse 
through December 31, 1998. Effective December 31, 1998, the O&M contracts 
between Westinghouse Power and the Partnerships were terminated by mutual 
consent of both parties and the payment of $10 million to Westinghouse. The 
Partnerships recorded a net gain of $4.2 million, the effect of which is 
reflected in the statement of operations for the period ended December 31, 
1998. Additionally, the Partnerships agreed to pay Westinghouse a total of 
$15.6 million for spare parts to be purchased in 1999 and 2000. FPLE 
Operating Services became the new provider of O&M services for the 
Partnerships on January 1, 1999.

NE LP for the year ended December 31, 1998 - NE LP's operations for the 
year ended December 31, 1998 primarily reflect the operations of the 
Partnerships subsequent to the acquisitions on January 14, 1998 and the 
related allocation of the purchase price.

Revenues year to date totaled $302.7 million and were comprised of $298.2 
million of power sales to utilities and $4.5 million of steam sales. Power 
sales to utilities reflect changes in utility energy bank balances of $15.6 
million (which increased reported revenues) that are determined in 
accordance with scheduled or specified rates under certain power purchase 
agreements.

Fuel expense of $121.4 million includes $141.5 million of fuel purchased 
for the Partnerships and the fixed and variable costs associated with the 
delivery and use of the fuel for operations. These fuel costs are offset by 
$20.1 million of deferred credit amortization for fuel contracts as a 
result of the purchase price allocation of the acquisitions.

O&M expenses of $14.0 million are comprised of O&M provider fees and site 
expenses of $22.7 million offset by $4.5 million of deferred credit 
amortization for O&M contracts as a result of the purchase price allocation 
of the acquisitions and offset by a $4.2 million net gain recorded from the 
early termination of the O&M contracts between Westinghouse Power and the 
Partnerships. Included in O&M expenses is the major maintenance accrual 
described in Note 2 of NE LP.

Depreciation and amortization of $69.5 million is comprised of depreciation 
for the cogeneration and carbon dioxide facilities of $21.0 million and 
$48.5 million of amortization of the power purchase agreements as a result 
of the purchase price allocation of the acquisitions.

General and administrative expenses of $9.8 million are comprised primarily 
of management and professional fees and site expenses.

Interest expense of $76.3 million is comprised primarily of interest on 
notes payable to the Funding Corp. ($43.7 million), interest on energy bank 
balances ($17.4 million) and interest on the Acquisition Corp. notes ($15.2 
million).

Interest income reflects cash balances earning investment income and 
reflects the impact of the release and distribution of debt service reserve 
cash and energy bank collateral restricted cash during 1998.

The Partnerships for the period from January 14, 1998 to December 31, 1998 
(post-acquisition) - Subsequent to January 13, 1998, the basis of 
presentation of the results of operations for the Partnerships reflects the 
new basis of accounting discussed in Note 1 and Note 2 of the Partnerships.

Revenues period to date totaled $302.7 million and were comprised of $298.2 
million of power sales to utilities and $4.5 million of steam sales. Power 
sales to utilities reflect changes in utility energy bank balances of $15.6 
million (which increased reported revenues) that are determined in 
accordance with scheduled or specified rates under certain power purchase 
agreements.

Fuel expense of $121.4 million includes $141.5 million of fuel purchased 
for the Partnerships and the fixed and variable costs associated with the 
delivery and use of the fuel for operations. These fuel costs are offset by 
$20.1 million of deferred credit amortization for fuel contracts as a 
result of the purchase price allocation of the acquisitions.

O&M expenses of $14.0 million are comprised of O&M provider fees and site 
expenses of $22.7 million offset by $4.5 million of deferred credit 
amortization for O&M contracts as a result of the purchase price allocation 
of the acquisitions and offset by a $4.2 million net gain recorded from the 
early termination of the O&M contracts between Westinghouse Power and the 
Partnerships. Included in O&M expenses is the major maintenance accrual 
described in Note 2 of the Partnerships.

Depreciation and amortization of $69.5 million is comprised of depreciation 
for the cogeneration and carbon dioxide facilities of $21.0 million and 
$48.5 million of amortization of the power purchase agreements as a result 
of the purchase price allocation of the acquisitions.

General and administrative expenses of $9.5 million are comprised primarily 
of management and professional fees and site expenses.

Interest expense of $61.2 million is comprised primarily of interest on 
notes payable to the Funding Corp. ($43.7 million) and interest on energy 
bank balances ($17.4 million).

Interest income reflects cash balances earning investment income and 
reflects the impact of the release and distribution of debt service reserve 
cash and energy bank collateral restricted cash during 1998.

The Partnerships for the period from January 1, 1998 to January 13, 1998 
(pre-acquisition) - Revenues for the thirteen-day period totaled $13.1 
million and were comprised of $12.9 million of power sales to utilities and 
$200 thousand of steam sales. Power sales to utilities reflect changes in 
utility energy bank balances which are determined in accordance with 
scheduled or specified rates under certain power purchase agreements.

Fuel expense of $5.8 million includes fuel purchased for the Partnerships 
and the fixed and variable costs associated with the delivery and use of 
the fuel for operations.

O&M expenses of $974,000 are comprised of O&M provider fees and site 
utility expenses.

Depreciation and amortization of $894,000 is comprised of depreciation for 
the cogeneration and carbon dioxide facilities.

General and administrative expenses of $538,000 are comprised primarily of 
management fees.

Interest expense is comprised primarily of interest on notes payable to the 
Funding Corp. ($1.7 million) and interest on energy bank balances 
($630,000).

Interest income reflects cash balances earning investment income.

The Partnerships for calendar year 1997 compared to calendar year 1996 - 
Revenues for the year ended December 31, 1997 were $312.2 million compared 
to $272.3 million for the year ended December 31, 1996. The increase in 
revenues is primarily due to increased power sales to utilities and 
reflects changes in utility energy bank balances which are determined in 
accordance with scheduled or specified rates under certain power purchase 
agreements.

Fuel expense for the year ended December 31, 1997 was $151.5 million 
compared to $138.7 million for the year ended December 31, 1996. The 
increase in fuel is primarily due to increased fuel needs purchased for the 
Partnerships and fixed and variable costs associated with delivery and use 
of the fuel for operations.

O&M expenses for the year ended December 31, 1997 were $25.7 compared to 
$22.9 million for the year ended December 31, 1996. The increase in O&M 
expenses is primarily due to increased O&M provider fees and site utility 
expenses, as well as performance bonuses and heat rate bonuses payable 
under the O&M agreements.

Depreciation and amortization for the years ended December 31, 1997 and 
1996 was $25.0 million and is primarily comprised of depreciation for the 
cogeneration and carbon dioxide facilities.

General and administrative expenses for the year ended December 31, 1997 
were $16.0 million compared to $14.4 million for the year ended December 
31, 1996 and are comprised primarily of management and professional fees.

Interest expense for the year ended December 31, 1997 is comprised 
primarily of interest on notes payable to the Funding Corp. ($47.3 million) 
and interest on energy bank balances ($17.4 million). Interest expense for 
the year ended December 31, 1996 is comprised primarily of interest on 
notes payable to the Funding Corp. ($49.4 million) and interest on energy 
bank balances ($19.7 million).

Interest income for the year ended December 31, 1997 was $9.9 million as 
compared to $10.5 million for the year ended December 31, 1996. The 
decrease in interest income reflects lower cash balances earning investment 
income.

The Funding Corp. - Debt principal payments were $21.6 million, $24.1 
million and $25.2 million for the years ended December 31, 1998, 1997 and 
1996, respectively. Debt interest payments were $45.3 million, $47.3 
million and $49.4 million for the years ended December 31, 1998, 1997 and 
1996, respectively.

The Acquisition Corp. - Debt interest payments of $15.2 million were made 
by the Acquisition Corp. during 1998.

Both Massachusetts and New Jersey have enacted legislation designed to 
deregulate the production and sale of electricity. By allowing customers to 
choose their electricity supplier, deregulation is expected to result in a 
shift from cost-based rates to market-based rates for energy production. 
Similar initiatives are also being pursued on the federal level. Although the 
legislation varies by state, common areas of focus include when market-based 
pricing will be available for wholesale and retail customers, what existing 
above market costs will be recoverable and the mechanism for the recovery of 
such costs. NE LP and the Partnerships do not expect electric utility 
industry restructuring to result in any material adverse change to the 
Partnerships' power purchase agreements. However, the impact of electric 
utility industry restructuring on the companies that purchase power from 
the Partnerships is uncertain.

The Registrants are continuing to work to resolve the potential impact of 
the year 2000 on the processing of information by their computer systems. A 
multi-phase plan has been developed consisting of inventorying potential 
problems, assessing what will be required to address each potential 
problem, taking the necessary action to fix each problem, testing to see 
that the action taken did result in year 2000 readiness and implementing 
the required solution. The inventory and assessment of the information 
technology infrastructure, computer applications and computerized processes 
embedded in operating equipment has been completed. The Registrants' 
efforts to assess the year 2000 readiness of third parties include 
surveying important suppliers. Meetings are being conducted with suppliers. 
Results of our supplier readiness assessment are being considered in the 
development of our contingency plans to help ensure that critical supplies 
are not interrupted, that large power purchasers are able to receive power 
and that transactions with or processed by financial institutions will 
occur as intended. The Registrants are on schedule with their multi-phase 
plan and all phases are expected to be completed by mid-1999, except for 
work at NJEA which will be completed during a scheduled outage in October 
1999. The cost of addressing year 2000 issues is estimated to be 
approximately $500,000, of which approximately 20% had been spent through 
December 31, 1998.

At this time, the Registrants believe that the most reasonably likely worst 
case scenarios relating to the year 2000 could include a temporary 
disruption of service to customers, caused by a potential disruption in 
fuel supply, water supply and telecommunications. The Registrants' year 
2000 contingency planning is currently underway to address risk scenarios 
at the operating level (such as generation, transmission and distribution), 
as well as at the business level (such as procurement and accounting). 
These plans are intended to mitigate both internal risks and potential 
risks in the Registrants' supply chain. Contingency plans are expected to 
be completed by mid-1999, allowing the second half of 1999 for 
communication and training.

In June 1998, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative 
Instruments and Hedging Activities." This statement establishes accounting 
and reporting standards requiring that every derivative instrument 
(including certain derivative instruments embedded in other contracts) be 
recorded in the balance sheet as either an asset or liability measured at 
its fair value. The statement requires that changes in the derivative's 
fair value be recognized currently in earnings unless specific hedge 
accounting criteria are met. The Registrants are currently assessing the 
effect, if any, on their financial statements of implementing FAS 133. The 
Registrants will be required to adopt the standard in 2000.

Liquidity and Capital Resources 

The Funding Corp. and the Partnerships - Cash flow generated by the 
Partnerships during 1998 was sufficient to fund operating expenses as well 
as fund the debt service requirements of the Funding Corp. Debt maturities 
of the Funding Corp. will require cash outflows of approximately $313.4 
million in principal and interest through 2003, including $67.0 million in 
1999. It is anticipated that cash requirements for principal and interest 
payments in 1999 will be satisfied with operational cash flow. For the year 
ended December 31, 1998, there were $159.6 million in distributions to 
partners, $69.2 million of which resulted from the release of restricted 
cash collateral.

The Acquisition Corp. and NE LP - Cash flow generated by NE LP during 1998 
was sufficient to fund operating expenses as well as fund the debt service 
requirements of the Acquisition Corp. and the Funding Corp. Debt maturities 
of the Acquisition Corp. and the Funding Corp. will require cash outflows 
of approximately $417.8 million in principal and interest through 2003, 
including $84.6 million in 1999. It is anticipated that cash requirements 
for principal and interest payments in 1999 will be satisfied with 
operational cash flow. For the year ended December 31, 1998, there were 
$545.4 million of contributions from partners and $347.2 million in 
distributions to partners.

During the year ended December 31, 1998, NE LP expended net cash of $482.2 
million for acquisition of the Partnerships, received $69.2 million from 
release of restricted cash collateral and received $215.2 million of cash 
proceeds from the loan from the Acquisition Corp.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

All financial instruments and positions held by NE LP and the Partnerships 
described below are held for purposes other than trading.

Interest rate risk - The fair value of NE LP's and the Partnerships' long-
term debt is affected by changes in interest rates. The following presents 
the sensitivity of the fair value of debt and interest rate swap agreements 
to a hypothetical 10% decrease in interest rates:

<TABLE>
<CAPTION>
                                                                                                   1998              
                                                                                                             Hypo-
                                                                                                             thetical
                                                                                                             Increase
                                                                                     Carrying     Fair       in Fair
                                                                                      Value       Value      Value(a)
                                                                                          (Thousands of Dollars)
<S>                                                                                  <C>       <C>           <C>
Long-term debt of NE LP/Acquisition Corp. .........................................  $220,000  $ 250,000(b)  $ 12,000
Long-term debt of Partnerships/Funding Corp. ......................................  $468,724  $ 574,000(b)  $ 21,000
Interest rate swap agreements of NE LP/the Partnerships ...........................  $    191  $     191(c)  $      -

(a)  Calculated based on the change in discounted cash flow.
(b)  Based on the borrowing rate currently available for debt instruments with similar terms and average maturities.
(c)  Based on estimated cost to terminate the agreements.

</TABLE>
While a decrease in interest rates would increase the fair value of debt, 
it is unlikely that events that would result in a realized loss will occur.

Commodity price risk - The prices received by the Partnerships for power 
sales under their long-term contracts do not move precisely in tandem with 
the prices paid by the Partnerships for natural gas. To mitigate the price 
risk associated with purchases of natural gas, the Partnerships may, from 
time to time, enter into certain transactions either through public 
exchanges or by means of over-the-counter transactions with specific 
counterparties. The Partnerships mitigate their risk through purchases of 
natural gas through the use of natural gas call options, natural gas 
purchase swap agreements that require the Partnerships to pay a fixed price 
(absolutely or within a specified range) in return for a variable price on 
specified notional quantities of natural gas, and forward purchases of 
natural gas. The following presents the sensitivity of the fair value of 
gas purchase swap agreements to a hypothetical 10% decrease in natural gas 
prices:

<TABLE>
<CAPTION>
                                                                                                   1998              
                                                                                                             Hypo-
                                                                                                             thetical
                                                                                                             Increase
                                                                                     Carrying     Fair       in Fair
                                                                                      Value       Value      Value(a)
                                                                                          (Thousands of Dollars)
<S>                                                                                  <C>       <C>           <C>
Gas purchase swap agreements of NE LP/the Partnerships ............................  $      -  $     788(b)  $  2,681

(a)  Calculated based on the change in natural gas prices.
(b)  Based on estimated cost to terminate the agreements.

</TABLE>


Item 8.  Financial Statements and Supplementary Data


INDEPENDENT AUDITORS' REPORT



NORTHEAST ENERGY, LP
NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP:

We have audited the consolidated financial statements of Northeast Energy, 
LP, as of December 31, 1998 and 1997 and for the year ended December 31, 
1998, and the combined financial statements of Northeast Energy Associates, A 
Limited Partnership and North Jersey Energy Associates, A Limited 
Partnership, as of December 31, 1998 and for the periods from January 1, 1998 
to January 13, 1998, and from January 14, 1998 to December 31, 1998, listed 
in the accompanying index at Item 14(a)1 of this Annual Report (Form 10-K) to 
the Securities and Exchange Commission for the year ended December 31, 1998. 
These financial statements are the responsibility of the respective 
Partnership's management. Our responsibility is to express an opinion on 
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material 
respects, the consolidated financial position of Northeast Energy, LP, and 
the combined financial position of Northeast Energy Associates, A Limited 
Partnership, and North Jersey Energy Associates, A Limited Partnership, and 
the results of their operations and their cash flows for the above-stated 
periods in conformity with generally accepted accounting principles.



DELOITTE & TOUCHE LLP
Certified Public Accountants

West Palm Beach, Florida
March 19, 1999


INDEPENDENT AUDITORS' REPORT



NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP, AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP:

In our opinion, the combined balance sheet and the related combined 
statements of operations, of cash flows and of partners' equity as of and 
for each of the two years in the period ended December 31, 1997 (appearing 
on pages 17 through 27 of this Form 10-K Annual Report) present fairly, in 
all material respects, the financial position, results of operations and 
cash flows of Northeast Energy Associates, A Limited Partnership, and North 
Jersey Energy Associates, A Limited Partnership (the "Partnerships") as of 
and for each of the two years in the period ended December 31, 1997, in 
conformity with generally accepted accounting principles. These financial 
statements are the responsibility of the Partnerships' management; our 
responsibility is to express an opinion on these financial statements based 
on our audits. We conducted our audits of these statements in accordance 
with generally accepted auditing standards, which require that we plan and 
perform the audit to obtain reasonable assurance about whether the 
financial statements are free of material misstatement. An audit includes 
examining, on a test basis, evidence supporting the amounts and disclosures 
in the financial statements, assessing the accounting principles used and 
significant estimates made by management, and evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for the opinion expressed above. We have not audited the 
combined financial statements of the Partnerships for any period subsequent 
to December 31, 1997.




PRICEWATERHOUSECOOPERS LLP


Boston, Massachusetts
March 24, 1998


NORTHEAST ENERGY, LP
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                December 31,      
                                                                                          1998             1997   
<S>                                                                                    <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents ........................................................   $   36,038      $         -
  Accounts receivable ..............................................................       29,746                -
  Fuel inventories .................................................................        4,935                -
  Prepaid expenses and other current assets ........................................          406                -
    Total current assets ...........................................................       71,125                -

Non-current assets:
  Deferred debt issuance costs (net of accumulated amortization of $548) ...........        6,412                -
  Cogeneration facilities and carbon dioxide facility (net of accumulated
    depreciation of $20,987) .......................................................      492,566                -
  Power purchase contracts (net of accumulated amortization of $48,545) ............      840,211                -
  Other assets .....................................................................           29                -
    Total non-current assets .......................................................    1,339,218                -

TOTAL ASSETS .......................................................................   $1,410,343      $         -


LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
  Current portion of notes payable - the Funding Corp. .............................   $   23,511      $         -
  Accounts payable .................................................................       12,338                -
  Due to related parties ...........................................................          800                -
  Other accrued expenses ...........................................................        9,384                -
    Total current liabilities ......................................................       46,033                -

Non-current liabilities:
  Deferred credit - fuel contracts .................................................      313,427                -
  Notes payable - the Funding Corp. ................................................      445,213                -
  Note payable - the Acquisition Corp. .............................................      220,000                -
  Amounts due utilities for energy bank balances ...................................      173,356                -
    Total non-current liabilities ..................................................    1,151,996                -

Partners' equity:
  General partners .................................................................        4,246                -
  Limited partners .................................................................      208,068                -
    Total partners' equity .........................................................      212,314                -

COMMITMENTS AND CONTINGENCIES

TOTAL LIABILITIES AND PARTNERS' EQUITY .............................................   $1,410,343      $         -

</TABLE>



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


NORTHEAST ENERGY, LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                                                        November 21,
                                                                                           Year Ended     1997 to
                                                                                          December 31,  December 31,
                                                                                              1998          1997    
<S>                                                                                         <C>           <C>
REVENUES .............................................................................      $302,693      $      -

COSTS AND EXPENSES:
  Fuel ...............................................................................       121,438             -
  Operations and maintenance .........................................................        13,956             -
  Depreciation and amortization ......................................................        69,543             -
  General and administrative .........................................................         9,794             -
    Total costs and expenses .........................................................       214,731             -

OPERATING INCOME .....................................................................        87,962             -

OTHER EXPENSE (INCOME):
  Amortization of debt issuance costs ................................................           548             -
  Interest expense ...................................................................        76,336             -
  Interest income ....................................................................        (3,020)            -
    Total other expense - net ........................................................        73,864             -

NET INCOME............................................................................      $ 14,098      $      -

</TABLE>



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


NORTHEAST ENERGY, LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                                                        November 21,
                                                                                           Year Ended     1997 to
                                                                                          December 31,  December 31,
                                                                                              1998          1997    
<S>                                                                                         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income ..........................................................................     $  14,098     $      -
  Adjustments to reconcile net income to net cash provided by operating activities:
      Depreciation and amortization ...................................................        70,091            -
      Amortization of fuel and O&M contracts ..........................................       (24,632)           -
      Other ...........................................................................           273            -
      Decrease in accounts receivable .................................................        14,295            -
      Decrease in other current assets ................................................         2,086            -
      Decrease in accounts payable and accrued expenses ...............................       (18,965)           -
      Increase in amounts due utilities for energy bank balances ......................         1,427            -
      Decrease in due to related parties ..............................................        (1,479)           -
    Net cash provided by operating activities .........................................        57,194            -

CASH FLOWS FROM INVESTING ACTIVITIES:
  Release of restricted cash collateral ...............................................        69,156
  Acquisition purchase price, net of $62,635 cash acquired ............................      (482,167)           -
    Net cash used in investing activities .............................................      (413,011)           -

CASH FLOWS FROM FINANCING ACTIVITIES:
  Contributions from partners .........................................................       545,412            -
  Principal payments on the Funding Corp. notes  ......................................       (21,563)           -
  Net proceeds from loan by the Acquisition Corp. .....................................       215,202            -
  Distributions to partners ...........................................................      (347,196)           -
    Net cash provided by financing activities .........................................       391,855            -

Net increase in cash and cash equivalents .............................................        36,038
Cash and cash equivalents at beginning of period ......................................             -            -
Cash and cash equivalents at end of period ............................................     $  36,038     $      -

Supplemental disclosure of cash flow information:
  Cash paid for interest ..............................................................     $  61,227     $      -

</TABLE>



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


NORTHEAST ENERGY, LP
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                             General      Limited       Partners'
                                                                             Partners     Partners       Equity  
<S>                                                                          <C>          <C>           <C>
Balances, December 31, 1997 ............................................     $      -     $       -     $       -
  Contributions from partners ..........................................       10,908       534,504       545,412
  Net income ...........................................................          282        13,816        14,098
  Distributions to partners ............................................       (6,944)     (340,252)     (347,196)
Balances, December 31, 1998 ............................................     $  4,246     $ 208,068     $ 212,314

</TABLE>



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

NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
COMBINED BALANCE SHEETS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                 December 31,       
                                                                                                            1997
                                                                                             1998      (Prior Basis)
<S>                                                                                       <C>            <C>
ASSETS
Current assets:
  Cash and cash equivalents .........................................................     $   35,152     $  61,203
  Accounts receivable ...............................................................         29,746        34,036
  Due from related party ............................................................              -           114
  Fuel inventories ..................................................................          4,935         4,752
  Prepaid expenses and other current assets .........................................            406         3,052
    Total current assets ............................................................         70,239       103,157

Non-current assets:
  Cogeneration facilities and carbon dioxide facility (net of accumulated
    depreciation of $20,987 and $153,963, respectively) .............................        492,566       349,365
  Power purchase contracts (net of accumulated amortization of $48,545) .............        840,211             -
  Unamortized financing costs .......................................................              -        15,674
  Other assets ......................................................................             29         4,193
  Restricted cash ...................................................................              -        69,156
    Total non-current assets ........................................................      1,332,806       438,388

TOTAL ASSETS ........................................................................     $1,403,045     $ 541,545


LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Current liabilities:
  Current portion of notes payable - the Funding Corp. ..............................     $   23,511     $  21,563
  Accounts payable ..................................................................         12,338        15,450
  Due to related parties ............................................................            663            71
  Other accrued expenses ............................................................          9,384         2,358
    Total current liabilities .......................................................         45,896        39,442

Non-current liabilities:
  Deferred credit - fuel contracts ..................................................        313,427             -
  Notes payable - the Funding Corp. .................................................        445,213       468,724
  Amounts due utilities for energy bank balances ....................................        173,356       230,565
    Total non-current liabilities ...................................................        931,996       699,289

Partners' equity (deficit):
  General partner ...................................................................          4,252        (4,714)
  Limited partners ..................................................................        420,901      (192,472)
    Total partners' equity (deficit) ................................................        425,153      (197,186)

COMMITMENTS AND CONTINGENCIES

TOTAL LIABILITIES AND PARTNERS' EQUITY ..............................................     $1,403,045     $ 541,545

</TABLE>



The accompanying notes are an integral part of these combined financial 
statements.



NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
COMBINED STATEMENTS OF OPERATIONS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                          Years Ended December 31,                 
                                                                      Period from
                                                      Period from      January 1,
                                                       January 14,       1998 to
                                                         1998 to       January 13,
                                                      December 31,        1998            1997            1996
                                                          1998        (Prior Basis)   (Prior Basis)   (Prior Basis)
<S>                                                     <C>              <C>             <C>             <C>
REVENUES .........................................      $302,693         $ 13,109        $312,154        $272,262

COSTS AND EXPENSES:
  Fuel ...........................................       121,438            5,774         151,476         138,727
  Operations and maintenance .....................        13,956              974          25,689          22,854
  Depreciation and amortization ..................        69,543              894          24,992          24,978
  General and administrative .....................         9,512              538          15,984          14,424
    Total costs and expenses .....................       214,449            8,180         218,141         200,983

OPERATING INCOME .................................        88,244            4,929          94,013          71,279

OTHER EXPENSE (INCOME):
  Interest expense ...............................        61,154            2,422          67,271          71,889
  Interest income ................................        (2,910)            (402)         (9,931)        (10,534)
    Total other expense - net ....................        58,244            2,020          57,340          61,355

NET INCOME .......................................      $ 30,000         $  2,909        $ 36,673        $  9,924

</TABLE>



The accompanying notes are an integral part of these combined financial 
statements.


NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
COMBINED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                          Years Ended December 31,                 
                                                                      Period from
                                                      Period from      January 1,
                                                       January 14,       1998 to
                                                         1998 to       January 13,
                                                      December 31,        1998            1997            1996
                                                          1998        (Prior Basis)   (Prior Basis)   (Prior Basis)
<S>                                                     <C>              <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .........................................  $  30,000        $   2,909       $ 36,673        $  9,924
  Adjustments to reconcile net income to net cash
  provided by operating activities:
      Depreciation and amortization...................     69,543              894         27,155          27,351
      Amortization of fuel and O&M contracts..........    (24,632)               -              -               -
      Decrease in due from related party .............          -              114              -               -
      (Increase) decrease in accounts receivable .....     14,295          (10,005)         9,635           7,794
      (Increase) decrease in other current assets ....      2,086              426            (34)         (1,342)
      Increase (decrease) in accounts payable and
        accrued expenses..............................    (18,809)           7,217           (996)         (1,317)
      Increase (decrease) in amounts due utilities
        for energy bank balances......................      1,427              (52)         9,643          32,869
      Increase (decrease) in due to related parties...        663              (71)            99            (253)
    Net cash provided by operating activities ........     74,573            1,432         82,175          75,026

CASH FLOWS FROM INVESTING ACTIVITIES:
  Release of restricted cash collateral ..............     69,156                -              -           9,412
  Capital expenditures ...............................          -                -           (378)           (824)
    Net cash provided by (used in) investing 
      activities .....................................     69,156                -           (378)          8,588

CASH FLOWS FROM FINANCING ACTIVITIES:
  Contributions from partners ........................     10,000                -              -               -
  Principal payments on notes ........................    (21,563)               -        (24,075)        (25,204)
  Distributions to partners ..........................   (159,649)               -        (46,380)        (66,826)
    Net cash used in financing activities ............   (171,212)               -        (70,455)        (92,030)

Net increase (decrease) in cash and cash equivalents .    (27,483)           1,432         11,342          (8,416)
Cash and cash equivalents at beginning of period .....     62,635           61,203         49,861          58,277
Cash and cash equivalents at end of period ...........  $  35,152        $  62,635       $ 61,203        $ 49,861

Supplemental disclosure of cash flow information:
  Cash paid for interest .............................  $  46,045        $       -       $ 48,794       $ 51,435

Supplemental schedule of noncash investing and
financing activities:
  Accrued capitalized facility costs .................  $       -        $       -       $    240       $    165

  See Note 1 and Note 2 - Basis of Presentation
  concerning new basis of accounting subsequent to
  January 13, 1998

</TABLE>



The accompanying notes are an integral part of these combined financial 
statements.

NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
COMBINED STATEMENTS OF PARTNERS' EQUITY
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                               General      Limited      Partners'
                                                                               Partner      Partners      Equity  
<S>                                                                            <C>         <C>           <C>
Prior Basis
Balances, December 31, 1995 ............................................       $(4,047)    $(126,530)    $(130,577)
  Net income............................................................            99         9,825         9,924
  Distributions to partners ............................................          (668)      (66,158)      (66,826)
Balances, December 31, 1996 ............................................        (4,616)     (182,863)     (187,479)
  Net income............................................................           366        36,307        36,673
  Distributions to partners ............................................          (464)      (45,916)      (46,380)
Balances, December 31, 1997 ............................................        (4,714)     (192,472)     (197,186)
  Net income from January 1 to January 13, 1998 ........................            29         2,880         2,909
Balances, January 13, 1998..............................................        (4,685)     (189,592)     (194,277)
New Basis
  Adjustment of balance due to adoption of new basis....................        10,133       728,946       739,079
  Capital contributions from partners...................................           100         9,900        10,000
  Net income............................................................           300        29,700        30,000
  Distributions to partners ............................................        (1,596)     (158,053)     (159,649)
Balances, December 31, 1998 ............................................       $ 4,252     $ 420,901     $ 425,153

</TABLE>



The accompanying notes are an integral part of these combined financial 
statements.


NORTHEAST ENERGY, LP
NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
Period Ended December 31, 1998
Period From January 1, 1998 to January 13, 1998
Years Ended December 31, 1997 and 1996


1.  Nature of Business

Northeast Energy, LP (NE LP), a Delaware limited partnership, was formed on 
November 21, 1997 for the purpose of acquiring ownership interests in two 
partnerships, each of which owns an electric power generation station in 
the northeastern United States (Northeast Energy Associates, A Limited 
Partnership (NEA) and North Jersey Energy Associates, A Limited Partnership 
(NJEA), collectively the Partnerships) and is jointly owned by subsidiaries 
of ESI Energy, Inc. (ESI Energy) and Tractebel Power, Inc. (Tractebel 
Power). ESI Energy is wholly-owned by FPL Energy, Inc. (FPL Energy), which 
is an indirect wholly-owned subsidiary of FPL Group, Inc., a company listed 
on the New York Stock Exchange. Tractebel Power is a direct wholly-owned 
subsidiary of Tractebel, Inc., which is a direct wholly-owned subsidiary of 
Tractebel, S.A., a Belgian energy and environmental services business. NE 
LP also formed a wholly-owned entity, Northeast Energy, LLC (NE LLC) to 
assist in such acquisitions. NE LP had no financial activity prior to 
January 1, 1998.

On January 14, 1998, NE LP and NE LLC acquired all of the interests in the 
Partnerships from Intercontinental Energy Corporation (IEC), a 
Massachusetts corporation. NE LP holds a one percent (1%) general partner 
and ninety-eight percent (98%) limited partner interest in the 
Partnerships; NE LLC holds the remaining one percent (1%) limited partner 
interest. See Note 2 - Acquisitions for additional information relating to 
the acquisitions.

The Partnerships were formed in 1986 to develop, construct, own, operate 
and manage two separate 300 megawatt (MW) natural gas-fired combined-cycle 
cogeneration facilities. NEA's facility is located in Bellingham, 
Massachusetts and NJEA's facility is located in Sayreville, New Jersey. NEA 
commenced commercial operation in September 1991 and NJEA commenced 
commercial operation in August 1991. The Partnerships operate in the 
independent power industry and have been granted permission by the Federal 
Energy Regulatory Commission to operate as qualifying facilities defined in 
the Public Utility Regulatory Policies Act of 1978, as amended and as 
defined in federal regulations.

In connection with the acquisitions of the Partnerships' interests, an 
existing special purpose funding corporation was acquired by an entity 
related to FPL Energy and Tractebel Power. The funding corporation's name 
was changed from IEC Funding Corp. to ESI Tractebel Funding Corp (Funding 
Corp.). Additionally, as a means of funding portions of the purchase price 
of the acquisitions of the Partnerships, ESI Tractebel Acquisition Corp. 
(Acquisition Corp.) was formed. On February 12, 1998, the Acquisition Corp. 
issued new debt which was registered with the Securities and Exchange 
Commission in an exchange offer. The proceeds were distributed to ESI 
Energy and Tractebel Power. Repayment of the new debt is expected from 
distributions from the Partnerships and is guaranteed by all interests in 
the Partnerships. See Note 4 for additional information.

The partners share profits and losses and have interests in assets and 
liabilities and cash flows in proportion to their tax basis capital 
accounts. Distributions to the partners may be made only after all funding 
requirements of the Partnerships have been met, as described in the trust 
indenture.

2.  Summary of Significant Accounting Policies

Basis of Presentation - The accompanying consolidated financial statements 
include the accounts of the Partnerships subsequent to the acquisitions, as 
they are indirectly wholly-owned by NE LP. All material intercompany 
transactions have been eliminated in consolidation. The accompanying 
combined financial statements include the accounts of the Partnerships for 
all periods and are combined based on common ownership. All material 
intercompany transactions have been eliminated in the combination.

Acquisitions - On January 14, 1998, NE LP and NE LLC acquired all of the 
interests in the Partnerships for approximately $545 million, including 
approximately $10 million of acquisition costs (the Acquisitions). The 
Acquisitions were accounted for using the purchase method of accounting and 
was subject to pushdown accounting, which gave rise to a new basis of 
accounting by the Partnerships. The purchase price has been allocated to 
the assets and liabilities acquired based on their fair values.


The following is a summary of the Partnerships' assets acquired and 
liabilities assumed in the Acquisitions (thousands of dollars):

Assets:
Current assets ........................................ $114,286
Restricted cash ....................................... $ 69,156
Cogeneration facilities and carbon dioxide facility.... $513,523
Power purchase agreements ............................. $888,756
Other assets .......................................... $     36

Liabilities:
Current liabilities ................................... $ 48,404
Operations and maintenance (O&M) contracts ............ $ 18,749
Fuel contracts ........................................ $333,544
Energy bank balances .................................. $171,530
Notes payable ......................................... $468,724

Carrying values of current assets, restricted cash and current liabilities 
were considered to closely approximate fair value and were not adjusted. 
Power purchase agreements were assigned a value based on the estimated 
amount to be received over the contract period in excess of an independent 
appraiser's assessment of market rates for power, discounted to the date of 
acquisition. The cogeneration facilities and carbon dioxide facility were 
initially assigned value based on an assessment of current replacement cost 
for similar capacity, without the acquired power purchase agreements. In 
accordance with Accounting Principles Board Opinion No. 16, the values 
assigned to these long-lived assets were reduced by the net excess of the 
fair values of all assets acquired over the purchase price. O&M and fuel 
contract obligations were determined based on expected cash flows during 
contract periods compared to estimated cash flows for similar services if 
contracted for currently, discounted to the date of acquisition. Notes 
payable include the previously existing debt of the Partnerships that was 
considered to approximate market value. Energy bank balances were assigned 
a value representing the estimated present value of future payments to 
utilities in connection with certain existing power purchase agreements.

The following unaudited pro forma information has been prepared assuming that 
the Acquisitions and the issuance of the New Securities described in Note 1 
had occurred at the beginning of the periods presented (thousands of 
dollars):

<TABLE>
<CAPTION>
                                                          NE LP                  Partnerships     
                                                       Year Ended                Years Ended
                                                      December 31,               December 31,     
                                                          1998              1998            1997  
<S>                                                     <C>               <C>             <C>
Revenues ...........................................    $315,802          $315,802        $312,154
Operating income ...................................    $ 92,249          $ 92,522        $ 79,004
Net income .........................................    $ 13,596          $ 32,071        $ 16,431

</TABLE>
Cash and Cash Equivalents - Investments purchased with an original maturity 
of three months or less are considered cash equivalents. Excess cash is 
invested in high-grade money market accounts and commercial paper and is 
subject to minimal credit and market risk. At December 31, 1998 and 1997, 
the recorded amount of cash approximates its fair value. Restricted cash at 
December 31, 1997 represents cash reserved as collateral for letters of 
credit related to energy bank balances. Subsequent to the acquisition on 
January 14, 1998, the cash collateral requirement related to energy bank 
balances was terminated and the cash was distributed to the partners. See 
Note 7 for additional information.

Accounts Receivable and Revenue - Accounts receivable primarily consist of 
receivables from three Massachusetts utilities and one New Jersey utility 
for electricity delivered and sold under six power purchase agreements. 
Prices are based on initial floor prices per kilowatt hour (kwh), subject 
to adjustment based on actual volumes of electricity purchased, escalation 
factors and other conditions. Revenue is recognized in accordance with the 
Emerging Issues Task Force Issue No. 91-6, Revenue Recognition of Long-Term 
Power Sales Contracts. Revenue is recognized based on power delivered at 
rates stipulated in the power purchase agreements, except that revenue is 
deferred to the extent that stipulated rates are in excess of amounts, 
either scheduled or specified, in the agreements to the extent the 
Partnerships have an obligation to repay such excess. The amount deferred 
is reflected as amounts due utilities for energy bank balances on the 
balance sheets. Revenue from steam sales is recognized upon delivery.

Cogeneration Facilities, Carbon Dioxide Facility and Other Assets - 
Effective January 14, 1998, all facilities were revalued as a result of 
applying the purchase method of accounting mentioned above. The facilities 
and other fixed assets are depreciated using the straight-line method over 
their estimated useful life which was increased from 20 years to 34 years 
effective January 14, 1998.

Unamortized Financing Costs - Unamortized financing costs of the 
Partnerships at December 31, 1997 consist primarily of investment banking 
fees, legal fees and other costs associated with the placement of 
previously issued secured notes (Funding Corp. Securities) which were being 
amortized over the approximate 15-year term of the securities using the 
interest method. Effective January 14, 1998, these costs were revalued as a 
result of applying the purchase method of accounting mentioned above.

Major Maintenance - Effective January 14, 1998, maintenance expenses are 
accrued for certain identified major maintenance and repair items related 
to the Partnerships' facilities. The expenses are accrued ratably over each 
major maintenance cycle. The amounts accrued relate to maintenance costs 
required for the equipment to operate over its depreciable life. For the 
period ended December 31, 1998, the Partnerships recorded major maintenance 
expense of $2.8 million. At December 31, 1998, the Partnerships had $4.1 
million of accrued major maintenance.

Inventories - Inventories consist of natural gas and fuel oil and are 
stated at the lower of cost, determined on a first-in, first-out (FIFO) 
basis, or market through January 13, 1998. Effective January 14, 1998, 
inventories are determined on an average cost basis to better match 
revenues and expenses. The change did not have a significant impact on the 
financial statements.

Power Purchase Agreements - Effective January 14, 1998, power purchase 
agreements which were determined to be in excess of prevailing rates for 
similar agreements were adjusted as a result of applying the purchase 
method of accounting mentioned above. These amounts are being amortized 
over the respective agreement periods, ranging from 14 to 24 years, on a 
straight-line basis or matched to scheduled fixed-price increases under the 
power purchase agreements, as applicable.

Fuel Contracts - Effective January 14, 1998, fuel contracts which were 
determined to be in excess of prevailing rates for similar contracts were 
adjusted as a result of applying the purchase method of accounting 
mentioned above. The fuel contracts are being amortized on a straight-line 
basis over the remaining terms of the contracts, 16 years.

O&M Contracts - Effective January 14, 1998, O&M contracts which were 
determined to be in excess of prevailing rates for similar contracts were 
adjusted as a result of applying the purchase method of accounting 
mentioned above. The O&M contracts were initially assigned a value of $18.7 
million dollars. For the period ended December 31, 1998, the Partnerships 
recorded $4.5 million of amortization expense for the O&M contracts. 
Effective December 31, 1998, the O&M contracts between Siemens Westinghouse 
Operating Services Company (O&M provider) and the Partnerships were 
terminated by mutual consent of both parties and the payment of $10 million 
to the O&M provider. See Note 7 for further disclosure on the O&M 
contracts.

Interest Rate Swaps - Interest rate swaps that do not qualify for hedge 
accounting are recorded at fair value, with changes in the fair value 
recognized currently in income as adjustments to interest expense. See Note 
6 for further disclosure regarding interest rate swap agreements.

Natural Gas Hedging Instrument - Premiums paid for natural gas call options 
are deferred and recognized in income in conjunction with the underlying 
natural gas purchases. Gains and losses on natural gas purchase swap 
agreements are recognized as adjustments to fuel costs at monthly 
settlement dates. Purchases of natural gas under forward purchase 
agreements are accounted for as fuel costs at their contract price at 
delivery. See Note 6 for further disclosure regarding natural gas hedging 
instruments.

Deferred Debt Issuance Costs - Deferred debt issuance costs of NE LP are 
being amortized over the approximate 14-year term of the Acquisition 
Corp.'s note payable using the interest method.

Income Taxes - Partnerships are not taxable entities for Federal and state 
income tax purposes. As such, no provision has been made for income taxes 
since such taxes, if any, are the responsibilities of the individual 
partners.

Accounting for Derivative Instruments and Hedging Activities - In June 
1998, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative 
Instruments and Hedging Activities." This statement establishes accounting 
and reporting standards requiring that every derivative instrument 
(including certain derivative instruments embedded in other contracts) be 
recorded in the balance sheet as either an asset or liability measured at 
its fair value. The statement requires that changes in the derivative's 
fair value be recognized currently in earnings unless specific hedge 
accounting criteria are met. The Registrants are currently assessing the 
effect, if any, on their financial statements of implementing FAS 133. The 
Registrants will be required to adopt the standard in 2000.

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

3.  Cogeneration Facilities, Power Purchase Agreements and Carbon Dioxide 
Facility

Power Purchase Agreements - In 1986, NEA entered into five power purchase 
agreements with three Massachusetts utilities to sell approximately 290 MW 
at initial floor prices per kwh subject to adjustment based on actual 
volumes purchased, escalation factors, and other conditions. Performance 
under certain of these agreements is secured by a second mortgage on the 
NEA facility. In 1987, NJEA entered into an agreement with a New Jersey 
utility to sell 250 MW at an initial fixed price per kwh subject to 
adjustments, as defined in the agreement. These power purchase agreements 
have initial terms with expiration dates ranging from 2011 to 2021. The 
majority of the Partnerships' power sales to utilities are generated 
through these agreements. As such, the Partnerships are directly affected 
by changes in the power generation industry. Substantially all of the 
Partnerships' accounts receivable are with these utilities. The 
Partnerships do not require collateral or other security to support their 
receivables. However, management does not believe significant credit risk 
exists at December 31, 1998.

For the years ended December 31, 1998, 1997 and 1996, power sale revenues 
from two different utilities accounted for approximately 47% and 40%, 46% 
and 40% and 45% and 44%, respectively, of total revenues.

Both Massachusetts and New Jersey have enacted legislation designed to 
deregulate the production and sale of electricity. While NE LP and the 
Partnerships do not expect electric utility industry restructuring to 
result in any material adverse change to the Partnerships' power purchase 
agreements, the impact of electric utility industry restructuring on the 
companies that purchase power from the Partnerships is uncertain.

Energy Bank Balances - Certain of the power purchase agreements require the 
establishment of energy banks to record cumulative payments made by the 
utilities in excess of avoided cost rates scheduled or specified in such 
agreements. Some of the energy banks bear interest at various rates 
specified in the agreements. Upon termination of the agreements, remaining 
amounts recorded in the energy banks will be required to be repaid. Energy 
bank balances are partially secured by letters of credit (see Note 7 - 
Energy Bank and Loan Collateral).

Steam Sales Agreements and Carbon Dioxide Facility - In order for the 
Partnerships' facilities to maintain qualifying facility status, the 
facilities are required to generate five percent of total energy output as 
steam for sale to unrelated third parties. In 1990, NEA entered into an 
amended and restated NEA steam sales agreement with a processor and seller 
of carbon dioxide. The amended and restated NEA steam sales agreement 
extends for the same terms as the carbon dioxide facility's lease, with 
automatic extension for any renewal period under the carbon dioxide 
facility's lease. Pursuant to the steam sales agreement, NEA sells all the 
steam generated by the NEA facility at a price that fluctuates based on 
changes in the price of a specified grade of fuel oil. In conjunction with 
this contract, NEA constructed the carbon dioxide facility and, in 1989, 
entered into a 16-year agreement to lease the facility to the steam user. 
Base rent under the lease is $100,000 per month, adjusted by the operating 
results of the facility as outlined in the lease agreement. Additionally, 
NEA pays the steam user $100,000 annually for administrative services 
rendered related to the operation of the carbon dioxide facility.

In 1989, NJEA entered into a 20-year steam sales agreement with a steam 
user adjacent to the NJEA facility. Under this agreement, NJEA sells a 
specified maximum quantity of steam at a floor price that can increase 
based on changes in prices of coal. This agreement automatically renews for 
two consecutive five-year terms unless either party gives notice not to 
renew two years before the expiration of each of the prior terms.

Fuel Supply, Transportation and Storage Agreements - Natural gas is 
provided to the NEA and NJEA facilities primarily under long-term contracts 
for supply, transportation and storage. The remaining fuel requirements are 
provided under short-term spot arrangements. The long-term natural gas 
supply is provided under contracts with ProGas Limited (ProGas) and Public 
Service Electric and Gas Company (PSE&G). Various pipeline companies 
provide transportation of the natural gas. Gas storage agreements provide 
contractual arrangements for the storage of limited volumes of natural gas 
with third parties for future delivery to the Partnerships.

The ProGas contracts commenced in 1991, and the initial 15-year terms were 
subsequently extended an additional seven years. The maximum total volumes 
of gas to be delivered under the ProGas contracts are approximately 48,800 
and 22,000 millions of British thermal units (MMBtu) per day for NEA and 
NJEA, respectively. The contract price, including transportation, of the 
ProGas supply delivered to the import point is determined with reference to 
a base price in 1990, re-determined annually thereafter based on specified 
inflation indices. The PSE&G contract commenced in 1991 and provides for 
the sale and delivery to NJEA of up to 25,000 MMBtu per day of gas for a 
term of 20 years. The contract price of the PSE&G gas is established 
monthly using a contractually specified mechanism.

With the exception of the PSE&G arrangement, all of the Partnerships' long-
term contractual arrangements call for monthly demand charge payments. 
These demand charge payments reserve certain pipeline transportation 
capacity and are made regardless of the Partnerships' specified fuel 
requirements in any month and regardless of whether the Partnerships 
utilize the capacity reserved. These demand charges totaled approximately 
$46 million, $46 million and $48 million for the years ended December 31, 
1998, 1997 and 1996, respectively. Total payments under such contracts were 
approximately $125.4 million, $112.5 million and $100.5 million in 1998, 
1997 and 1996, respectively, inclusive of demand charges. Total charges 
under the contract with PSE&G, including transportation costs, during 1998, 
1997 and 1996, were approximately $24.6 million , $28.1 million and 
$32.4 million, respectively. In the event the available capacity under 
these agreements is not utilized by the operations of the facilities, the 
Partnerships have the opportunity under certain of these contractual 
arrangements to sell unused capacity to third parties, but have not yet 
done so. NEA's facility also has the capability to burn No. 2 fuel oil 
which is stored on site for contingency supply.

4.  Loans Payable

Funding Corp. - The proceeds from the Funding Corp. Securities were used to 
make loans to the Partnerships and notes of the Partnerships were issued to 
the Funding Corp. in an aggregate principal amount equal to the Funding 
Corp. Securities. The Funding Corp. has borrowings outstanding as follows:

<TABLE>
<CAPTION>

                                                                                                December 31,       
                                                                                            1998           1997    
<S>                                                                                     <C>            <C>
8.43% Senior Secured Notes Due 2000 ................................................    $ 49,844,000   $ 71,407,000
9.16% Senior Secured Notes Due 2002 ................................................      31,500,000     31,500,000
9.32% Senior Secured Bonds Due 2007 ................................................     215,740,000    215,740,000
9.77% Senior Secured Bonds Due 2010 ................................................     171,640,000    171,640,000
  Total long-term debt .............................................................     468,724,000    490,287,000
    Less current maturities ........................................................      23,511,000     21,563,000
    Long-term debt, excluding current maturities ...................................    $445,213,000   $468,724,000


</TABLE>
Interest on the Funding Corp. Securities is payable semiannually on each 
June 30 and December 30. Principal repayments are made semiannually in 
amounts stipulated in the trust indenture. Future principal payments are as 
follows:

Year ending December 31:
1999 ......... ........................................ $ 23,511,000
2000 .................................................. $ 26,333,000
2001 .................................................. $ 20,160,000
2002 .................................................. $ 22,688,000
2003 .................................................. $ 23,818,000
Thereafter ............................................ $352,214,000

The Funding Corp. Securities are not subject to optional redemption but are 
subject to mandatory redemption in certain limited circumstances involving 
the occurrence of an event of loss, as defined in the trust indenture, for 
which the Partnerships fail to or are unable to restore a facility. 
Additionally, the Partnerships may, at their option, repurchase all or part 
of the Funding Corp. Securities with proceeds received from the release of 
cash collateral maintained as security for letters of credit.

The Funding Corp. Securities are unconditionally guaranteed, jointly and 
severally, by the Partnerships and are secured by a lien on, and a security 
interest in, substantially all of the assets of the Partnerships. The 
Partnerships are jointly and severally required to make scheduled payments 
on the notes on dates and in amounts identical to the scheduled payments of 
principal and interest on the Funding Corp. Securities. The Funding Corp. 
Securities, the guarantees thereon provided by the Partnerships and the 
notes are nonrecourse to the partners and are payable solely from the 
collateral pledged as security.

The trust indenture governing the Funding Corp. Securities contains certain 
restrictions on certain activities of the Partnerships, including incurring 
additional indebtedness or liens, distributions to the partners, the 
cancellation of power sale and fuel supply agreements, the use of proceeds 
from the issuance of the Funding Corp. Securities and the execution of 
mergers, consolidations and sales of assets.

Under the terms of a previous loan and credit agreement, the Partnerships 
were required to enter into interest rate swap agreements providing for the 
payments on a notional principal amount to be made by the Partnerships at 
fixed interest rates, in exchange for payments to be made by such financial 
institutions at floating interest rates. The original specified notional 
principal amount declines periodically until the scheduled expiration of 
the swaps in 1999. The Partnerships are jointly and severally liable under 
these agreements. As a result of the repayment of such loans with the 
proceeds of the Funding Corp. Securities, the original interest swap 
agreements no longer qualify for hedge accounting and are recorded at fair 
value. Changes in fair value are recognized in the statements of 
operations.

Acquisition Corp. - During 1998, the Acquisition Corp. issued $220,000,000 
of 7.99% Secured Bonds Due 2011 (Acquisition Corp. Securities) for the 
purpose of reimbursing certain partners of NE LP for a portion of $545 
million in equity contributions used to acquire the Partnerships. The 
proceeds from the Acquisition Corp. Securities were loaned to NE LP, 
evidenced by a promissory note. Interest on the Acquisition Corp. 
Securities is payable semiannually on each June 30 and December 30. 
Principal repayments are made annually commencing on June 30, 2002 and are 
in amounts stipulated in the trust indenture. Future principal payments are 
as follows:

Year ending December 31:
2002 .................................................. $  8,800,000
2003 .................................................. $  8,800,000
Thereafter ............................................ $202,400,000

The Acquisition Corp. Securities are subject to optional redemption after 
June 30, 2008 at the redemption prices set forth in the trust indenture and 
are subject to extraordinary mandatory redemption at a redemption price of 
100% of the principal amount thereof in certain limited circumstances as 
defined in the trust indenture.

The Acquisition Corp. Securities are unconditionally guaranteed by NE LP 
and are payable solely from payments to be made by NE LP under the 
promissory note and bond guaranty. NE LP's obligations to make payments 
under the promissory note are nonrecourse to the direct and indirect owners 
of NE LP. Payments with respect to the promissory note and, therefore, in 
respect of the Acquisition Corp. Securities will be effectively 
subordinated to payment of all indebtedness and other liabilities and 
commitments of the Partnerships, including the guarantee by the 
Partnerships of its indebtedness. Repayment of the Acquisition Corp. 
Securities is guaranteed by all interests in the Partnerships. The 
Acquisition Corp. Securities will rank senior to all subordinated 
indebtedness and rank evenly with all senior indebtedness that the 
Acquisition Corp. incurs in the future.


5.  Related Party Information

Administrative Services Agreement - NE LP and an entity related to FPL 
Energy have entered into an administrative services agreement that provides 
for management and administrative services to the Partnerships. The 
agreement expires in 2018, provides for fees of a minimum of $600,000 per 
year, subject to certain adjustments, and reimburses costs and expenses of 
performing services. For the period ended December 31, 1998, the 
Partnerships incurred $765,000 under the agreement.

Operations and Maintenance Agreements - NE LP and an entity related to FPL 
Energy have entered into operations and maintenance agreements that provide 
for the operations and maintenance of the Partnerships. The agreements 
expire in 2016, subject to extension by mutual agreement of the parties 
before six months preceding expiration. The agreements provide for fees of 
a minimum of $750,000 per year, subject to certain adjustments, for each 
Partnership and reimburse costs and expenses of performing services. For 
the period ended December 31, 1998, the Partnerships incurred $1,461,000 
under the agreements. See Note 7 - Operations and Maintenance of the 
Cogeneration Facilities.

Fuel Management Agreements - NE LP and an entity related to FPL Energy have 
entered into fuel management agreements that provide for the management of 
all natural gas and fuel oil, transportation and storage agreements, and 
the location and purchase of any additional required natural gas or fuel 
oil for the Partnerships. The agreements expire in 2023, provide for fees 
of a minimum of $450,000 per year, subject to certain adjustments, for each 
Partnership and reimburse costs and expenses of performing services. For 
the period ended December 31, 1998, the Partnerships incurred $881,000 
under the agreements.

The Partnerships pay a management fee to NE LP in an amount equal to the 
administrative services, operations and maintenance and fuel management 
agreements mentioned above.

Accrued expenses under the administrative services, operations and 
maintenance and fuel management agreements were $473,000 at December 31, 
1998. The average balances due to related parties did not vary materially 
from these amounts. Additionally, power sales to an entity related to FPL 
Energy were $1.1 million for the year ended December 31, 1998.

For the years ended December 31, 1997 and 1996, certain expenses were paid 
by IEC and subsequently reimbursed by the Partnerships. Payments made by 
IEC for the years ended December 31, 1997 and 1996 were $4,996,000 and 
$4,778,000, respectively. Reimbursements made by the Partnerships to IEC 
for the years ended December 31, 1997 and 1996 were $4,897,000 and 
$5,031,000, respectively. Net accrued expenses due from the previous owners 
were $43,000 at December 31, 1997.

6.  Financial Instruments

The Partnerships have made use of derivative financial instruments to hedge 
their exposure to fluctuations in both interest rates and the price of 
natural gas.

Under the terms of a previous loan and credit agreement, the Partnerships 
were required to enter into fixed interest rate swap agreements as a means 
of managing exposure to the variable rate of interest of those borrowings. 
In conjunction with the refinancing of those borrowings, the Partnerships 
entered into counter-swap agreements so that the Partnerships would no 
longer be exposed to changes in interest rates. The notional amount of 
these interest rate swap agreements was $5.5 million and $12.9 million at 
December 31, 1998 and 1997, respectively. The notional amount indicates the 
size of the transaction entered into, not the partnerships exposure to 
loss. The net effect on interest expense due to the interest rate swap 
agreements were (decreases) increases of $(11,000), $103,000 and $137,000 
for the years ended December 31, 1998, 1997 and 1996, respectively.

The prices received by the Partnerships for power sales under their long-
term contracts do not move precisely in tandem with the prices paid by the 
Partnerships for natural gas. To mitigate the price risk associated with 
purchases of natural gas, the Partnerships may, from time to time, enter 
into certain transactions either through public exchanges or by means of 
over-the-counter transactions with specific counterparties. The 
Partnerships mitigate their risk through purchases of natural gas through 
the use of natural gas call options, natural gas purchase swap agreements 
that require the Partnerships to pay a fixed price (absolutely or within a 
specified range) in return for a variable price on specified notional 
quantities of natural gas, and forward purchases of natural gas. The 
contract amount of these agreements was 13.4 million MMBtu and 21.9 million 
MMBtu at December 31, 1998 and 1997, respectively. The net gain included in 
fuel costs resulting from the gas purchase options, swap agreements and 
forward purchases was $2.5 million, $4.0 million and $5.2 million for the 
years ended December 31, 1998, 1997 and 1996, respectively.

The carrying amounts of cash equivalents and short-term debt approximate 
their fair values. The following estimates of the fair value of financial 
instruments have been made using available market information and other 
valuation methodologies. However, the use of different market assumptions or 
methods of valuation could result in different estimated fair values.


<TABLE>
<CAPTION>
                                                                                      December 31,                 
                                                                          1998                         1997         
                                                                 Carrying    Estimated         Carrying    Estimated
                                                                  Amount     Fair Value         Amount     Fair Value
                                                                               (Thousands of Dollars)
<S>                                                              <C>         <C>               <C>         <C>
Long-term debt of Partnerships/Funding Corp. (a) .............   $468,724    $574,000(b)       $490,287    $526,010(b)
Long-term debt of NE LP/Acquisition Corp. ....................   $220,000    $250,000(b)       $    n/a    $    n/a
Interest rate swap agreements of NE LP/the Partnerships ......   $    191    $    191(c)       $    889    $    889(c)
Gas purchase swap agreements of NE LP/the Partnerships .......   $      -    $    788(c)       $      -    $  2,527(c)

(a)  Includes current maturities.
(b)  Based on the borrowing rate currently available for debt instruments with similar terms and average maturities.
(c)  Based on estimated cost to terminate the agreements. 

</TABLE>
7.  Commitments and Contingencies

Energy Bank and Loan Collateral - Subsequent to the Acquisitions on January 
14, 1998, certain credit arrangements were terminated and replaced with new 
letters of credit and a guaranty to satisfy requirements in certain power 
purchase agreements. Specifically, new energy bank letters of credit were 
issued in face amounts of $12.7 million and $54 million. The $12.7 million 
letter of credit expires on December 31, 1999 and can be drawn upon on one 
occasion in the event that a certain power purchase agreement has 
terminated at a time when there was a positive energy bank balance existing 
in favor of the power purchaser. The $54 million letter of credit expires 
on December 31, 1999 and can be drawn upon in multiple drawings in the 
event that a certain power purchase agreement has terminated at the time 
when there was a positive energy bank balance existing in favor of the 
power purchaser.  The NEA power purchase agreements are also secured by a 
second mortgage on the NEA cogeneration facilities.

A guaranty was made by a subsidiary of FPL Group, Inc. in favor of the 
Partnerships' trustee. The guarantor unconditionally and irrevocably 
guarantees the payment of an amount equal to 50% of the debt service 
reserve requirement with respect to the Funding Corp. Securities. The 
guaranty expires on December 31, 1999 and is automatically extended for 
successive one-year periods unless the guarantor gives notice that it will 
not renew. Once the new credit arrangements were in place, cash of 
approximately $69.2 million (plus approximately $2.5 million in accrued 
interest) was released and distributed to the partners. Additionally, new 
letters of credit were issued in substitution for cash on deposit in 
Partnership trust accounts and approximately $33.2 million in cash was 
released and distributed to the partners.

Operations and Maintenance of the Cogeneration Facilities - In 1989, the 
Partnerships entered into two separate ten-year O&M agreements with the O&M 
provider for an aggregate annual consideration of approximately $11.1 
million, subject to changes in specified indices. Under these agreements, 
the Partnerships were required to pay the O&M provider a bonus payable 
annually over the term of the agreements based on operating performance. 
The Partnerships incurred $16.7 million, $19.7 million and $16.7 million 
for O&M and bonus expenses for the years ended December 31, 1998, 1997 and 
1996, respectively. Effective December 31, 1998, the O&M contracts between 
the O&M provider and the Partnerships were terminated by mutual consent of 
both parties. The Partnerships paid the O&M Provider $10 million in cash to 
terminate the agreements and recorded a net gain of $4.2 million, the 
effect of which is reflected in the statement of operations for the period 
ended December 31, 1998. Additionally, the Partnerships agreed to pay the 
O&M Provider a total of $15.6 million for spare parts to be purchased in 
1999 and 2000. An entity related to FPL Energy became the new provider of 
O&M services for the Partnerships on January 1, 1999.

Operating Lease - NEA entered into a 26-year operating lease in 1986 for a 
parcel of land. The lease may be extended for another 25 years at the 
option of NEA. Lease payments under the operating lease are as follows:

Year ending December 31:
1999 .................................................. $  201,000
2000 .................................................. $  213,000
2001 .................................................. $  225,000
2002 .................................................. $  237,000
2003 .................................................. $  249,000
Thereafter ............................................ $2,511,000

Lease expense under this agreement is recognized on a straight-line 
levelized basis of approximately $198,000 annually over the lease term.


INDEPENDENT AUDITORS' REPORT



ESI TRACTEBEL FUNDING CORP.:

We have audited the financial statements of ESI Tractebel Funding Corp. as 
of December 31, 1998 and for the year then ended, listed in the 
accompanying index at Item 14(a)1 of this Annual Report (Form 10-K) to the 
Securities and Exchange Commission for the year ended December 31, 1998. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements. An audit also includes assessing the accounting principles used 
and significant estimates made by management, as well as evaluating the 
overall financial statement presentation. We believe that our audit 
provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material 
respects, the financial position of ESI Tractebel Funding Corp. at 
December 31, 1998, and the results of its operations and its cash flows for 
the year then ended in conformity with generally accepted accounting 
principles.



DELOITTE & TOUCHE LLP
Certified Public Accountants

West Palm Beach, Florida
March 19, 1999


INDEPENDENT AUDITORS' REPORT



ESI TRACTEBEL FUNDING CORP. (FORMERLY IEC FUNDING CORP.):

In our opinion, the balance sheet and the related statements of operations 
and of cash flows as of and for each of the two years in the period ended 
December 31, 1997 (appearing on pages 30 through 34 of this Form 10-K 
Annual Report) present fairly, in all material respects, the financial 
position, results of operations and cash flows of ESI Tractebel Funding 
Corp. (formerly IEC Funding Corp.) (the "Company") as of and for each of 
the two years in the period ended December 31, 1997, in conformity with 
generally accepted accounting principles. These financial statements are 
the responsibility of the Company's management; our responsibility is to 
express an opinion on these financial statements based on our audits. We 
conducted our audits of these statements in accordance with generally 
accepted auditing standards, which require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test 
basis, evidence supporting the amounts and disclosures in the financial 
statements, assessing the accounting principles used and significant 
estimates made by management, and evaluating the overall financial 
statement presentation. We believe that our audits provide a reasonable 
basis for the opinion expressed above. We have not audited the financial 
statements of the Company for any period subsequent to December 31, 1997.



PRICEWATERHOUSECOOPERS LLP

Boston, Massachusetts
March 24, 1998


ESI TRACTEBEL FUNDING CORP.
BALANCE SHEETS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                 December 31,      
                                                                                            1998            1997   
<S>                                                                                       <C>             <C>
ASSETS
Current assets:
  Cash ..............................................................................     $       1       $       1
  Current portion of notes receivable from the Partnerships..........................        23,511          21,563
    Total current assets ............................................................        23,512          21,564

Notes receivable from the Partnerships ..............................................       445,213         468,724

TOTAL ASSETS ........................................................................     $ 468,725       $ 490,288


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of securities payable .............................................     $  23,511       $  21,563
  
Securities payable ..................................................................       445,213         468,724

Stockholders' equity:
  Common stock, no par value, 10,000 shares authorized, issued and outstanding ......             1               1

COMMITMENTS AND CONTINGENCIES

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..........................................     $ 468,725       $ 490,288

</TABLE>



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


ESI TRACTEBEL FUNDING CORP.
STATEMENTS OF OPERATIONS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                    Years Ended December 31,      
                                                                                1998          1997          1996  
<S>                                                                           <C>           <C>           <C>
Interest income .........................................................     $ 45,327      $ 47,303      $ 49,404
Interest expense ........................................................      (45,327)      (47,303)      (49,404)
 
NET INCOME ..............................................................     $      -      $      -      $      -

</TABLE>



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


ESI TRACTEBEL FUNDING CORP.
STATEMENTS OF CASH FLOWS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,  
                                                                                         1998       1997      1996  
<S>                                                                                    <C>        <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income ........................................................................  $      -   $     -   $     -
  Adjustment to reconcile net income to net cash provided by operating activities:
      Other - net....................................................................         -         -         -
    Net cash provided by operating activities .......................................         -         -         -
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments received from the Partnerships..................................    21,563    24,075    25,204
  Principal payments on debt ........................................................   (21,563)  (24,075)  (25,204)
    Net cash provided by financing activities .......................................         -         -         -

Net increase in cash ................................................................         -         -         -
Cash at beginning of period .........................................................         1         1         1
Cash at end of period ...............................................................  $      1  $      1   $     1

Supplemental disclosure of cash flow information:
  Cash paid for interest ............................................................  $ 45,327  $ 47,303   $49,404

</TABLE>



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


ESI TRACTEBEL FUNDING CORP.
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 1998, 1997 and 1996


1.  Nature of Business

ESI Tractebel Funding Corp. (Funding Corp.) is a Delaware corporation 
established in 1994 as a special purpose funding corporation for the 
purpose of issuing the securities described in Note 3. On January 14, 1998, 
the Funding Corp. was acquired by a subsidiary of ESI Energy, Inc. (ESI 
Energy), Tractebel Power, Inc. (Tractebel Power) and Broad Street Contract 
Services, Inc. (Broad Street) from Intercontinental Energy Corporation 
(IEC), a Massachusetts corporation. Broad Street participates for the 
purpose of providing an independent director and has no economic interests. 
The Funding Corp. changed its name from IEC Funding Corp. to its current 
name concurrent with and related to its acquisition. The Funding Corp. acts 
as agent of Northeast Energy Associates, A Limited Partnership and North 
Jersey Energy Associates, A Limited Partnership (combined, the 
Partnerships) with respect to the securities and holds itself out as agent 
of the Partnerships in all dealings with third parties relating to the 
securities. The Partnerships, owners of electric power generation stations 
in the northeastern United States, are owned indirectly by subsidiaries of 
ESI Energy and Tractebel Power.

2.  Summary of Significant Accounting Policies

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

3.  The Securities

The Funding Corp. previously issued secured notes (Securities). The 
proceeds from the Securities were used to make loans to the Partnerships. 
In connection with this transaction, the notes outstanding under a previous 
loan and credit agreement of the Partnerships were surrendered and new 
notes of the Partnerships were issued to the Funding Corp. in the aggregate 
principal amount of the Securities. Borrowings outstanding are as follows:

<TABLE>
<CAPTION>
                                                                                                December 31,       
                                                                                            1998           1997    
<S>                                                                                     <C>            <C>
8.43% Senior Secured Notes Due 2000 ................................................    $ 49,844,000   $ 71,407,000
9.16% Senior Secured Notes Due 2002 ................................................      31,500,000     31,500,000
9.32% Senior Secured Bonds Due 2007 ................................................     215,740,000    215,740,000
9.77% Senior Secured Bonds Due 2010 ................................................     171,640,000    171,640,000
  Total long-term debt .............................................................     468,724,000    490,287,000
    Less current maturities ........................................................      23,511,000     21,563,000
    Long-term debt, excluding current maturities ...................................    $445,213,000   $468,724,000

</TABLE>
Interest on the Securities is payable semiannually on each June 30 and 
December 30. Principal repayments are made semiannually and are in amounts 
stipulated in the trust indenture. Future principal payments are as 
follows:

Year ending December 31:
1999 .................................................. $ 23,511,000
2000 .................................................. $ 26,333,000
2001 .................................................. $ 20,160,000
2002 .................................................. $ 22,688,000
2003 .................................................. $ 23,818,000
Thereafter ............................................ $352,214,000

The Securities are not subject to optional redemption but are subject to 
mandatory redemption in certain limited circumstances involving the 
occurrence of an event of loss, as defined in the trust indenture, for 
which the Partnerships fail to or are unable to restore a facility. 
Additionally, the Partnerships may, at their option, repurchase all or part 
of the Securities with proceeds received from the release of cash 
collateral maintained as security for letters of credit.

The Securities are unconditionally guaranteed, jointly and severally, by 
the Partnerships and are secured by a lien on, and a security interest in, 
substantially all of the assets of the Partnerships. The Partnerships are 
jointly and severally required to make scheduled payments on the new notes 
on dates and in amounts identical to the scheduled payments of principal 
and interest on the Securities. The Securities, the guarantees thereon 
provided by the Partnerships and the new notes are nonrecourse to the 
partners and are payable solely from the collateral pledged as security.

The trust indenture governing the Securities contains certain restrictions 
on certain activities of the Partnerships, including the incurrence of 
additional indebtedness or liens, distributions to the partners, the 
cancellation of power sale and fuel supply agreements, the use of proceeds 
from the issuance of the Securities and the execution of mergers, 
consolidations and sales of assets.


4.  Financial Instruments

The estimated fair value of the Securities and the notes receivable from 
the Partnerships at December 31, 1998 and 1997 was $574,000,000 and 
$526,010,000, respectively. The estimate of the fair value has been made 
using available market information and other valuation methodologies. 
However, the use of different market assumptions or methods of valuation 
could result in different estimated fair values.


INDEPENDENT AUDITORS' REPORT



ESI TRACTEBEL ACQUISITION CORP.:

We have audited the financial statements of ESI Tractebel Acquisition Corp. 
as of January 12, 1998 (Date of Formation) and December 31, 1998 and for 
the period ended December 31, 1998, listed in the accompanying index at 
Item 14(a)1 of this Annual Report (Form 10-K) to the Securities and 
Exchange Commission for the year ended December 31, 1998. These financial 
statements are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these financial statements based 
on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements. An audit also includes assessing the accounting principles used 
and significant estimates made by management, as well as evaluating the 
overall financial statement presentation. We believe that our audits 
provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material 
respects, the financial position of ESI Tractebel Acquisition Corp. at 
January 12, 1998 and December 31, 1998, and the results of its operations 
and its cash flows for the period ended December 31, 1998 in conformity 
with generally accepted accounting principles.



DELOITTE & TOUCHE LLP
Certified Public Accountants

West Palm Beach, Florida
March 19, 1999


ESI TRACTEBEL ACQUISITION CORP.
BALANCE SHEETS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                           December 31,  January 12,
                                                                                              1998           1998   
<S>                                                                                         <C>            <C>
ASSETS
Due from NE LP .......................................................................      $    152       $      -
Note receivable from NE LP ...........................................................       220,000              -

TOTAL ASSETS .........................................................................      $220,152       $      -


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Income taxes payable ...............................................................      $      4       $      -
            
Deferred credit - interest rate hedge ................................................           140              -
Securities payable ...................................................................       220,000              -

Stockholders' equity:
  Common stock, $.01 par value, 100 shares authorized, 20 shares issued ..............             -              -
  Subscriptions receivable ...........................................................             -              -
  Retained earnings ..................................................................             8              -

COMMITMENTS AND CONTINGENCIES

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........................................      $220,152       $      -

</TABLE>



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


ESI TRACTEBEL ACQUISITION CORP.
STATEMENT OF OPERATIONS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                    Period From
                                                                                                  January 12, 1998
                                                                                                (Date of Formation)
                                                                                                to December 31, 1998
<S>                                                                                                    <C>
Interest income ..............................................................................         $ 15,182
Interest expense .............................................................................          (15,170)
Income before income taxes ...................................................................               12
Income tax expense ...........................................................................               (4)

NET INCOME ...................................................................................         $      8

</TABLE>



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


ESI TRACTEBEL ACQUISITION CORP.
STATEMENT OF CASH FLOWS
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                                    Period From
                                                                                                  January 12, 1998
                                                                                                (Date of Formation)
                                                                                                to December 31, 1998
<S>                                                                                                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .................................................................................        $       8
  Adjustment to reconcile net income to net cash provided by operating activities:
      Other - net.............................................................................               (8)
    Net cash provided by operating activities ................................................                -

CASH FLOWS FROM INVESTING ACTIVITIES:
  Loan to NE LP ..............................................................................         (215,202)
    Net cash used in investing activities ....................................................         (215,202)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of debt securities ................................................................          215,050
  Proceeds from interest rate hedge ..........................................................              152
    Net cash provided by financing activities ................................................          215,202

Net increase in cash .........................................................................                -
Cash at beginning of period ..................................................................                -
Cash at end of period ........................................................................        $       -

Supplemental disclosure of cash flow information:
  Cash paid for interest .....................................................................        $  15,182

</TABLE>



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


 ESI TRACTEBEL ACQUISITION CORP.
STATEMENT OF STOCKHOLDERS' EQUITY
(Thousands of Dollars)

<TABLE>
<CAPTION>
                                                               Common   Subscriptions  Retained  Stockholders'
                                                               Stock      Receivable   Earnings     Equity    
<S>                                                            <C>          <C>          <C>        <C>
Issuance of common stock ................................      $    -       $    -       $    -     $    -
Stock subscriptions .....................................           -            -            -          -
Net income ..............................................           -            -            8          8
Balances, December 31, 1998 .............................      $    -       $    -       $    8     $    8

</TABLE>



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


ESI TRACTEBEL ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
Period From January 12, 1998 (Date of Formation)
to December 31, 1998


1.  Nature of Business

ESI Tractebel Acquisition Corp. (Acquisition Corp.) is a Delaware 
corporation established on January 12, 1998 as a special purpose funding 
corporation for the purpose of issuing the securities described in Note 3. 
The Acquisition Corp.'s common stock is jointly owned by a subsidiary of 
ESI Energy, Inc. (ESI Energy) and a subsidiary of Tractebel Power, Inc. 
(Tractebel Power). The Acquisition Corp. acts as agent of Northeast Energy, 
LP (NE LP) with respect to the securities and holds itself out as agent of 
NE LP in all dealings with third parties relating to the securities. NE LP 
is a Delaware limited partnership that was established on November 21, 1997 
for the purpose of acquiring ownership interests in two electric power 
generation stations in the northeastern United States (the Partnerships). 
NE LP is owned by subsidiaries of ESI Energy and Tractebel Power.

2.  Summary of Significant Accounting Policies

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

3. The Securities

On February 12, 1998, the Acquisition Corp. issued $220,000,000 of 7.99% 
Secured Bonds Due 2011 (Securities). The proceeds from the Securities were 
loaned to NE LP, evidenced by a promissory note, for the purpose of 
reimbursing certain partners of NE LP for a portion of $545 million in 
equity contributions used to acquire the Partnerships. The Securities are 
unconditionally guaranteed by NE LP. Borrowings outstanding at December 31, 
1998 were $220,000,000.

Interest on the Securities is payable semiannually on each June 30 and 
December 30. Principal repayments are made annually commencing on June 30, 
2002 and are in amounts stipulated in the trust indenture. Future principal 
payments are as follows:

Year ending December 31:
2002 ...............................................  $  8,800,000
2003 ...............................................  $  8,800,000
Thereafter .........................................  $202,400,000

The Securities are subject to optional redemption after June 30, 2008 at 
the redemption prices set forth in the trust indenture and are subject to 
extraordinary mandatory redemption at a redemption price of 100% of the 
principal amount thereof in certain limited circumstances as defined in the 
trust indenture.

The Securities are unconditionally guaranteed by NE LP and are payable 
solely from payments to be made by NE LP under the promissory note and bond 
guaranty. NE LP's obligations to make payments under the promissory note 
are nonrecourse to the direct and indirect owners of NE LP. Payments with 
respect to the promissory note and, therefore, in respect of the Securities 
will be effectively subordinated to payment of all indebtedness and other 
liabilities and commitments of the Partnerships, including the guarantee by 
the Partnerships of its indebtedness. Repayment of the Securities is 
guaranteed by all interests in the Partnerships. The Securities will rank 
senior to all subordinated indebtedness and rank evenly with all senior 
indebtedness that the Acquisition Corp. incurs in the future.

4.  Financial Instruments

In January 1998, the Acquisition Corp. entered into a fixed interest rate 
financial instrument to hedge its exposure to fluctuations in the interest 
rate associated with the placement of originally issued securities. The 
financial instrument was settled on February 17, 1998 and qualified for 
hedge accounting. The gain resulting from the hedge was $152,000 and is 
being amortized into income using the effective interest method.

The estimated fair value of the Securities and the note receivable from NE 
LP at December 31, 1998 was $250 million. The estimate of the fair value has 
been made using available market information and other valuation 
methodologies. However, the use of different market assumptions or methods of 
valuation could result in different estimated fair values.


5.  Stockholders' Equity

On January 12, 1998 (Date of Formation), the Acquisition Corp. received stock 
subscriptions and subsequently issued 20 shares of common stock, par value 
$.01.

6.  Income Taxes

The Acquisition Corp. acts as agent of NE LP with respect to the Securities 
and holds itself out as agent of NE LP in all dealings with third parties 
relating to the Securities. Accordingly, as a result of the agency 
relationship, all tax activity of the Acquisition Corp. for federal and state 
income tax purposes represents amounts due to NE LP.

Item 9.  Changes In and Disagreements With Accountants on Accounting and 
Financial Disclosure

On September 4, 1998, a Form 8-K reported a change in the Funding Corp.'s 
and the Partnerships' independent accountants.


PART III

Item 10. Directors and Executive Officers of the Registrants

Management Committee of NE LP and the Partnerships

Scot C. Hathaway.  Mr. Hathaway, 40, is director of fuels and business 
management. He was appointed to the NE LP Management Committee by ESI GP in 
April 1998. Mr. Hathaway joined ESI Energy in May 1997. From 1990 to May 
1997, he was employed by Doswell Limited Partnership, a cogeneration 
facility owned by ESI Energy.

Eric M. Heggeseth.  Mr. Heggeseth, 46, is vice president of Tractebel 
Power. He was appointed to the NE LP Management Committee by Tractebel GP 
in March 1998.

Kenneth P. Hoffman.  Mr. Hoffman, 46, is vice president of business 
management. He was appointed to the NE LP Management Committee by ESI GP in 
November 1997.

Werner E. Schattner.  Mr. Schattner, 53, is executive vice president of 
Tractebel Power. He was appointed to the NE LP Management Committee by 
Tractebel GP in January 1998.

Directors of the Funding Corp. and the Acquisition Corp.

Eric M. Heggeseth.  Mr. Heggeseth, 46, is vice president of Tractebel 
Power. He has been a director of the Funding Corp. and the Acquisition 
Corp. since 1998.

Werner E. Schattner.  Mr. Schattner, 53, is executive vice president of 
Tractebel Power. He has been a director of the Funding Corp. and the 
Acquisition Corp. since 1998.

Glenn E. Smith.  Mr. Smith, 40, is vice president of project development. 
He was formerly director of project development for Nations Energy 
Corporation from May 1995 to June 1997. Prior to that, Mr. Smith was vice 
president of BOT Financial Corp. He has been a director of the Funding 
Corp. and the Acquisition Corp. since 1998.

Michael W. Yackira.  Mr. Yackira, 47, is president of FPL Energy. He was 
formerly vice president of finance and chief financial officer of FPL Group 
and senior vice president of finance and chief financial officer of FPL 
from January 1995 to January 1998. Prior to that, he was senior vice 
president of market and regulatory services of FPL. Mr. Yackira is a 
director of FPL. He has been a director of the Funding Corp. and the 
Acquisition Corp. since 1998.

Directors of the Funding Corp. and the Acquisition Corp. are elected 
annually and serve until their resignation, removal or until their 
respective successors are elected. The members of the Management Committee 
of NE LP and the Partnerships serve until their resignation, removal or 
until their respective successors are elected. Except as noted, each 
director or management committee member has held his position for five 
years or more and his employment history is continuous.

Item 11.  Executive Compensation

None.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

The Partnerships and NE LP.  The following table sets forth the direct and 
indirect interests of ownership:

<TABLE>
<CAPTION>
                                              Name and Address of             Nature of             Percentage
               Title of Class                   Beneficial Owner        Beneficial Ownership         Interest 
<S>                                           <C>                     <C>                           <C>
Partnerships:
General and Limited Partnership Interest      NE LP(1)                General Partner               98%LP
                                                                                                     1%GP

Limited Partnership Interest                  NE LLC(1)               Limited Partner                1%LP

NE LP:
General Partnership Interest                  ESI GP(1)               General Partner in NE LP       1%GP

General Partnership Interest                  Tractebel GP(2)         General Partner in NE LP       1%GP

Limited Partnership Interest                  ESI LP(1)               Limited Partner in NE LP      49%LP

Limited Partnership Interest                  Tractebel LP(2)         Limited Partner in NE LP      49%LP

(1)  The address for each of NE LP, NE LLC, ESI GP and ESI LP is c/o FPL Energy, Inc., 700 Universe Blvd.,
     Juno Beach, Florida 33408.
(2)  The address for each of Tractebel GP and Tractebel LP is c/o Tractebel Power, Inc., 1177 West Loop South,
     Suite 900, Houston, Texas 77027.

</TABLE>
The Funding Corp.  The following table sets forth the number of shares and 
percentage owned of the Funding Corp.'s voting securities beneficially 
owned by each person known to be the beneficial owner of more than five 
percent (5%) of the voting securities: 

<TABLE>
<CAPTION>
                                           Name and Address of        Amount and Nature of     Percent of
             Title of Class                  Beneficial Owner         Beneficial Ownership        Class  
<S>                                     <C>                           <C>                      <C>
Common Stock                            ESI Northeast Funding (1)     3,750                    37.5%

Common Stock                            Tractebel Power (1)           3,750                    37.5%

Common Stock                            Broad Street (2)              2,500                    25.0%

(1)  The address for ESI Northeast Funding is c/o FPL Energy, Inc., 700 Universe Blvd., Juno Beach, Florida 33408
     and the address for Tractebel Power, Inc. is 1177 West Loop South, Suite 900, Houston, Texas 77027.
(2)  The address for Broad Street is Two Wall Street, New York, New York 10005. Broad Street is a nominee of the
     Trustee and its sole purpose is to provide an independent director.

</TABLE>
The Acquisition Corp.  The following table sets forth the number of shares 
and percentage owned of the Acquisition Corp.'s voting securities 
beneficially owned by each person known to be the beneficial owner of more 
than five percent (5%) of the voting securities: 

<TABLE>
<CAPTION>
                                                Name and Address of        Amount and Nature of     Percent of
               Title of Class                     Beneficial Owner         Beneficial Ownership        Class  
<S>                                          <C>                           <C>                      <C>
Common Stock                                 ESI Northeast Acquisition (1) 10                       50.0%

Common Stock                                 Tractebel Power               10                       50.0%

(1)  The address for ESI Northeast Acquisition is c/o FPL Energy, Inc., 700 Universe Blvd., Juno Beach,
     Florida 33408. 

</TABLE>

Item 13. Certain Relationships and Related Transactions

Administrative Services Agreement. NE LP and an entity related to FPL 
Energy have entered into an administrative services agreement that provides 
for management and administrative services to the Partnerships. The 
agreement expires in 2018, provides for fees of a minimum of $600,000 per 
year, subject to certain adjustments, and reimburses costs and expenses of 
performing services. For the period ended December 31, 1998, the 
Partnerships incurred $765,000 under the agreement.

O&M Agreements. NE LP and an entity related to FPL Energy have entered into 
operations and maintenance agreements that provide for the operations and 
maintenance of the Partnerships. The agreements expire in 2016, subject to 
extension by mutual agreement of the parties before six months preceding 
expiration. The agreements provide for fees of a minimum of $750,000 per 
year, subject to certain adjustments, for each Partnership and reimburse 
costs and expenses of performing services. For the period ended December 
31, 1998, the Partnerships incurred $1,461,000 under the agreements.

Fuel Management Agreements. NE LP and an entity related to FPL Energy have 
entered into fuel management agreements that provide for the management of 
all natural gas and fuel oil, transportation and storage agreements, and 
the location and purchase of any additional required natural gas or fuel 
oil for the Partnerships. The agreements expire in 2023, provide for fees 
of a minimum of $450,000 per year, subject to certain adjustments, for each 
Partnership and reimburse costs and expenses of performing services. For 
the period ended December 31, 1998, the Partnerships incurred $881,000 
under the agreements.

Power Sales.  From time to time, FPL's Energy Marketing & Trading Division 
will purchase excess power produced by NJEA and resell the power to the 
marketplace. These purchases totaled $1.1 million in 1998.

<TABLE>
<CAPTION>
PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
<S>      <C>                                                                                            <C>
         (a)  1.  Financial Statements                                                                  Page(s)

                  NE LP:
                    Independent Auditors' Report - Deloitte & Touche LLP                                  11
                    Consolidated Balance Sheets                                                           13
                    Consolidated Statements of Operations                                                 14
                    Consolidated Statements of Cash Flows                                                 15
                    Consolidated Statements of Partners' Equity                                           16
                    Notes to Consolidated Financial Statements                                          21-27

                  Partnerships:
                    Independent Auditors' Report - Deloitte & Touche LLP                                  11
                    Independent Auditors' Report - PricewaterhouseCoopers LLP                             12
                    Combined Balance Sheets                                                               17
                    Combined Statements of Operations                                                     18
                    Combined Statements of Cash Flows                                                     19
                    Combined Statements of Partners' Equity                                               20
                    Notes to Combined Financial Statements                                              21-27

                  Funding Corp.:
                    Independent Auditors' Report - Deloitte & Touche LLP                                  28
                    Independent Auditors' Report - PricewaterhouseCoopers LLP                             29
                    Balance Sheets                                                                        30
                    Statements of Operations                                                              31
                    Statements of Cash Flows                                                              32
                    Notes to Financial Statements                                                       33-34

                  Acquisition Corp.:
                    Independent Auditors' Report - Deloitte & Touche LLP                                  35
                    Balance Sheet                                                                         36
                    Statement of Operations                                                               37
                    Statement of Cash Flows                                                               38
                    Statement of Stockholders' Equity                                                     39
                    Notes to Financial Statements                                                       40-41

              2.  Financial Statement Schedules - Schedules are omitted as not applicable or not required.

              3.  Exhibits including those Incorporated by Reference

</TABLE>

<TABLE>
<CAPTION>
              Exhibit No.     Description
<S>           <C>              <C>
              3.1*             Certificate of Incorporation of the Funding Corp.

              3.1.1*****       Certificate of Amendment of Certificate of Incorporation of the Funding Corp. as filed 
                               with the Secretary of State of the State of Delaware on February 3, 1998

              3.1.2******      Certificate of Incorporation of the Acquisition Corp. as filed with the Secretary of 
                               State of the State of Delaware on January 12, 1998

              3.2*****         By-laws of the Funding Corp.

              3.2.1******      By-laws of the Acquisition Corp.

              3.3*****         Amended and Restated Certificate of Limited Partnership of NEA as filed with the 
                               Secretary of State of the Commonwealth of Massachusetts on March 31, 1986, as amended 
                               and restated on January 9, 1987 and November 6, 1987, as further amended on July 6, 1989
                               and as amended and restated on February 16, 1998

              3.4*****         Amended and Restated Certificate of Limited Partnership of NJEA as filed with the 
                               Secretary of State of the State of New Jersey on November 3, 1986, as amended and 
                               restated on January 14, 1987, June 25, 1987, March 4, 1988 and February 16, 1998

               3.5*****        Amended and Restated Agreement of Limited Partnership of NEA dated as of November 21,
                               1997

               3.6*****        Amended and Restated Agreement of Limited Partnership of NJEA dated as of November 21,
                               1997

               3.7*****        Certificate of Limited Partnership of NE LP, a Delaware limited partnership, as filed 
                               with the Secretary of State of the State of Delaware on November 21, 1997

               3.8*****        Agreement of Limited Partnership of NE LP, a Delaware limited partnership, dated as of 
                               November 21, 1997

               4.1*            Trust Indenture dated as of November 15, 1994, among the Partnerships, the Funding Corp.
                               and the Trustee

               4.2*            First Supplemental Indenture dated as of November 15, 1994, among the Partnerships, the 
                               Funding Corp and the Trustee, including forms of the securities

               4.3*            Credit Agreement dated as of December 1, 1994, among the Partnerships, each of the 
                               financial institutions referred to therein and Sanwa

               4.4*            Collateral Agency Agreement dated as of December 1, 1994 among the Partnerships, the 
                               Funding Corp. , the Trustee, Sanwa, the Swap Providers (as defined therein) and State 
                               Street Bank and Trust Company, as Collateral Agent


               4.5*            Amended and Restated Project Loan and Credit Agreement dated as of December 1, 1994, 
                               between the Partnerships and the Funding Corp.

               4.6*            Partnerships' Guarantee Agreement dated as of December 1, 1994, between the Partnerships
                               and the Trustee

               4.7*            Registration Rights Agreement dated as of November 21, 1994, among the Partnerships, the 
                               Funding Corp., Chase Securities, Inc., Merrill Lynch, Pierce Fenner & Smith, Incorporated 
                               and Salomon Brothers, Inc.

               4.8*            Pledge, Trust and Intercreditor Agreement dated as of December 1, 1994 among the 
                               Partnerships, Sanwa, and Sanwa Bank Trust Company of New York and the Trustee

               4.9*            Assignment and Security Agreement dated as of December 1, 1994, between the Funding Corp.
                               and the Trustee

               4.10*           Amended and Restated Assignment and Security Agreement dated as of December 1, 1994, 
                               between the Partnerships, NE LP and the Trustee

               4.11*           Amended and Restated Assignment and Security Agreement dated as of December 1, 1994, 
                               between NEA and the Trustee

               4.12*           Amended and Restated Assignment and Security Agreement dated as of December 1, 1994, 
                               between NJEA and the Trustee

               4.13*           Amended and Restated Mortgage, Assignment of Rents, Security Agreement and Fixture Filing
                               dated as of December 1, 1994, made by NEA in favor of the Trustee

               4.14*           Amended and Restated Mortgage, Assignment of Rents, Security Agreement and Fixture Filing 
                               (Additional Properties) dated as of December 1, 1994, made by NEA in favor of the Trustee

               4.15*           Amended and Restated Indenture of Mortgage, Assignment of Rents, Security Agreement and 
                               Fixture Filing dated as of December 1, 1994, made by NJEA in favor of the Trustee

               4.16*           Amended and Restated Stock Pledge Agreement dated as of December 1, 1994, between NJEA 
                               and the Trustee

               4.17*           Assignment of Mortgage dated as of December 1, 1994, between The Chase Manhattan Bank 
                               (National Association) and the Trustee with respect to the Bellingham Mortgage dated as 
                               of June 28, 1989

               4.18*           Assignment of Mortgage dated as of December 1, 1994, between The Chase Manhattan Bank 
                               (National Association) and the Trustee with respect to the Bellingham Mortgage dated 
                               August 10, 1989

               4.19*           Assignment of Mortgage dated as of December 1, 1994, between The Chase Manhattan Bank 
                               (National Association) and the Trustee with respect to the Sayreville Mortgage dated 
                               June 28, 1989

               4.20*           Assignment of Security Agreements dated as of December 1, 1994, among  The Chase 
                               Manhattan Bank (National Association), the Trustee, the Partnerships, the Funding Corp.
                               and NE LP

               4.21*****       Second Supplemental Trust Indenture dated as of January 14, 1998 among the Funding Corp.,
                               NEA, NJEA and the Trustee

               4.22*****       Amendment to Amended and Restated Assignment and Security Agreement by and between NEA,
                               NJEA, NE LP and the Trustee dated as of January 14, 1998

               4.23*****       Termination of Pledge, Trust and Intercreditor Agreement dated as of January 30, 1998 
                               among NEA, NJEA, Sanwa, Sanwa Bank and Trust Company of New York and the Trustee

               4.24******      Indenture, dated as of February 19, 1998 among the Acquisition Corp., NE LP, NE LLC, and
                               the Trustee

               4.25******      Registration Rights Agreement, dated as of February 19, 1998 by and among the Acquisition
                               Corp., NE LP, and Goldman Sachs & Co.

               4.26******      Company & Partner Pledge Agreement dated as of February 19, 1998 by and among the 
                               Acquisition Corp., NE LP, NE LLC in favor of the Trustee

               4.27******      Sponsor Pledge Agreement dated as of February 19, 1998 by and among ESI Northeast 
                               Acquisition, ESI GP, ESI LP, Tractebel GP, Tractebel LP, and Tractebel Power in favor 
                               of the Trustee

               10.1*           Accommodation Agreement dated as of June 28, 1989, between NEA, BECO, Commonwealth, 
                               Montaup, and The Chase Manhattan Bank (National Association)

               10.2.1*         Amended and Restated Operation and Maintenance Agreement dated as of June 28, 1989 (the 
                               "Sayreville O&M Agreement"), between NJEA and Westinghouse Power

               10.2.2*         Letter Agreement regarding the Sayreville Heat Rate dated June 23, 1993, between NJEA 
                               and Westinghouse Power

               10.2.3*         Letter Agreement regarding extension of the Sayreville O&M Agreement dated June 23, 1993,
                               between Westinghouse Power and NJEA

               10.2.4*         Second Amended and Restated Operation and Maintenance Agreement dated as of June 28, 1989
                               (the "Bellingham O&M Agreement"), between NEA and Westinghouse Power

               10.2.5*         Letter Agreement regarding the Bellingham Heat Rate dated June 23, 1993, between NEA and
                               Westinghouse

               10.2.6*         Letter Agreement regarding extension of the Bellingham O&M Agreement dated June 23, 1993,
                               between NEA and Westinghouse Power

               10.2.7**        Amendment No. 1 to the Bellingham O&M Agreement, dated as of May 1, 1995, by and between
                               NEA and Westinghouse Power

               10.3.1*         Power Purchase Agreement dated as of April 1, 1986 (the "BECO I Power Purchase 
                               Agreement"), between NEA and BECO

               10.3.2*         First Amendment to the BECO I Power Purchase Agreement dated as of June 8, 1987, between
                               BECO and NEA

               10.3.3*         Second Amendment to the BECO I Power Purchase Agreement dated as of June 21, 1989, 
                               between BECO and NEA

               10.3.4*         Power Purchase Agreement dated as of January 28, 1988 (the "BECO II Power Purchase 
                               Agreement"), between NEA and BECO

               10.3.5*         First Amendment to the BECO II Power Purchase Agreement dated as of June 21, 1989, 
                               between NEA and BECO

               10.3.6*         Power Sale Agreement dated as of November 26, 1986 (the "Commonwealth I Power Purchase 
                               Agreement"), between NEA and Commonwealth

               10.3.7*         First Amendment to the Commonwealth I Power Purchase Agreement dated as of August 15, 
                               1988, between Commonwealth and NEA

               10.3.8*         Second Amendment to the Commonwealth I Power Purchase Agreement dated as of January 1, 
                               1989, between Commonwealth and NEA

               10.3.9*         Power Sale Agreement dated as of August 15, 1988 (the "Commonwealth II Power Purchase 
                               Agreement"), between NEA and Commonwealth

               10.3.10*        First Amendment to the Commonwealth II Power Purchase Agreement dated as of January 1,
                               1989, between NEA and Commonwealth

               10.3.11*        Power Purchase Agreement dated as of October 17, 1986 (the "Montaup Power Purchase 
                               Agreement"), between NEA and Montaup

               10.3.12*        First Amendment to the Montaup Power Purchase Agreement dated as of June 28, 1989, 
                               between Montaup and NEA

               10.3.13*        Power Purchase Agreement dated as of October 22, 1987 (the "JCP&L Power Purchase 
                               Agreement"), between NJEA and JCP&L

               10.3.14*        First Amendment to the JCP&L Power Purchase Agreement dated as of June 16, 1989, between
                               JCP&L and NJEA

               10.4.1*         Firm Transportation Service Agreement dated as of February 28, 1994, among CNG 
                               Transmission Corporation, a Delaware corporation ("CNG"), NEA, ProGas U.S.A., Inc.,
                               a Delaware corporation ("ProGas USA") and ProGas

               10.4.2*         Firm Gas Transportation Agreement (Rate Schedule X-320) dated as of February 27, 1991, 
                               between NEA and Transcontinental Gas Pipe Line Corporation, a Delaware corporation
                               ("Transco")

               10.4.3*         Rate Schedule X-35 Firm Gas Transportation Agreement dated as of October 1, 1993, between
                               NEA and Algonquin Gas Transmission Company, a Delaware corporation ("Algonquin")

               10.4.4*         Service Agreement for Rate Schedule FTS-5 dated as of February 16, 1994, between NEA and 
                               Texas Eastern Transmission Corporation, a Delaware corporation ("Texas Eastern")

               10.4.5*         ProGas/TransCanada NE Assignment Agreement dated as of July 30, 1993, between ProGas and 
                               TransCanada Pipelines Limited, an Ontario corporation ("TransCanada")

               10.4.6*         Northeast Gas Substitution Agreement dated as of July 30, 1993, among ProGas, NEA and 
                               TransCanada

               10.4.7*         Northeast Notice and Consent dated as of July 30, 1993, among NEA, ProGas and TransCanada

               10.4.8*         ProGas NE Producer Assignment Agreement dated as of July 30, 1993, between ProGas and 
                               TransCanada

               10.4.9*         Firm Transportation Service Agreement dated as of February 28, 1994, among CNG, NJEA, 
                               ProGas USA and ProGas

               10.4.10*        Firm Gas Transportation Agreement (Rate Schedule X-319) dated as of February 27, 1991, 
                               between Transco and NJEA

               10.4.11*        Service Agreement for Rate Schedule FTS-5 dated as of February 16, 1994, between Texas 
                               Eastern and NJEA

               10.4.12*        ProGas/TransCanada NJ Assignment Agreement dated as of July 30, 1993, between ProGas and 
                               TransCanada

               10.4.13*        North Jersey Gas Substitution Agreement dated as of July 30, 1993, among ProGas, NJEA and
                               TransCanada

               10.4.14*        North Jersey Notice and Consent dated as of July 30, 1993, among NJEA, ProGas and 
                               TransCanada

               10.4.15*        ProGas NJ Producer Assignment dated as of July 30, 1993, between ProGas and TransCanada

               10.4.16*        Gas Purchase and Sales Agreement dated as of May 4, 1989 (the "PSE&G Agreement"), between
                               NJEA and PSE&G

               10.5.1*         Service Agreement Applicable to the Storage of Natural Gas Under Rate Schedule GSS-II 
                               dated as of September 30, 1993, between CNG and NEA

               10.5.2*         Service Agreement Applicable to the Storage of Natural Gas Under Rate Schedule GSS-II 
                               dated as of September 30, 1993, between CNG and NJEA

               10.5.3**        Service Agreement Applicable to Transportation of Natural Gas under Rate Schedule FT 
                               dated as of February 1, 1996, by and between CNG and NEA

               10.5.4**        Service Agreement Applicable to Transportation of Natural Gas under Rate Schedule FT 
                               dated as of February 1, 1996, by and between CNG and NJEA


               10.6.1*         Gas Purchase Contract dated as of May 12, 1988 (the "Bellingham ProGas Agreement"), 
                               between ProGas and NEA

               10.6.2*         First Amending Agreement to the Bellingham ProGas Agreement dated as of April 17, 1989, 
                               between ProGas and NEA

               10.6.3*         Second Amending Agreement to the Bellingham ProGas Agreement dated as of June 23, 1989, 
                               between ProGas and NEA

               10.6.4*         Amending Agreement to the ProGas Agreements (as defined below) dated as of November 1, 
                               1991, between ProGas, NEA and NJEA

               10.6.5*         Third Amending Agreement to the Bellingham ProGas Agreement dated as of July 30, 1993, 
                               between ProGas and NEA

               10.6.6*         Letter Agreement regarding the Bellingham ProGas Agreement dated as of September 14, 
                               1992, between ProGas and NEA

               10.6.7*         Letter Agreement regarding the Bellingham ProGas Agreement dated as of July 30, 1993, 
                               between ProGas and NEA

               10.6.8*         Gas Purchase Contract dated as of May 12, 1988 (the "Sayreville ProGas Agreement," and 
                               together with the Bellingham ProGas Agreement, the "ProGas Agreements"), between ProGas 
                               and NJEA

               10.6.9*         First Amending Agreement to the Sayreville ProGas Agreement dated April 17, 1989, between 
                               ProGas and NJEA

               10.6.10*        Second Amending Agreement to the Sayreville ProGas Agreement dated June 23, 1989, between 
                               ProGas and NJEA

               10.6.11*        Third Amending Agreement to the Sayreville ProGas Agreement dated July 30, 1993, between
                               ProGas and NJEA

               10.6.12*        Letter Agreement regarding the Sayreville ProGas Agreement dated as of September 14, 
                               1992, between ProGas and NJEA, as amended as of April 22, 1994 by Letter Agreement 
                               between ProGas and NJEA

               10.6.13*        Letter Agreement regarding the Sayreville ProGas Agreement dated July 30, 1993, between
                               ProGas and NJEA

               10.7.1*         Amended and Restated Steam Sales Agreement dated as of December 21, 1990, between NEA and 
                               NECO-Bellingham, Inc., a Massachusetts corporation ("NECO")

               10.7.2*         Industrial Steam Sales Contract dated as of June 5, 1989, between NJEA and Hercules 
                               Incorporated, a Delaware corporation ("Hercules")

               10.8.1*         Letter agreement regarding Bellingham Project power transmission arrangements dated 
                               June 29, 1989, between NEA and BECO

               10.8.2*         Letter agreement regarding Bellingham Project power transmission arrangements dated 
                               June 6, 1989, between NEA and Commonwealth

               10.8.3*         Letter agreement regarding Bellingham Project power transmission arrangements dated 
                               June 28, 1989, between NEA and Montaup

               10.9*           Amended and Restated Interconnection Agreement dated as of September 24, 1993, between
                               BECO and NEA

               10.10.1*        Amended and Restated Lease Agreement dated as of December 21, 1990, between NEA and NECO

               10.10.2*        Carbon Dioxide Agreement dated as of December 21, 1990, between NECO and Praxair, Inc.,
                               as successor to Liquid Carbonic Carbon Dioxide Corporation ("Praxair")

               10.10.3*        BOC Gases Carbon Dioxide Agreement dated as of December 21, 1990, between NECO and the
                               BOC Gases of the BOC Group, Inc., a Delaware corporation ("BOC Gases")

               10.10.4*        Assignment and Security Agreement dated as of December 1, 1991, between NECO and NEA

               10.10.5***      Operation and Maintenance Agreement by and between NECO-Bellingham, Inc. as Lessee and 
                               Westinghouse as Operator for the Bellingham Project Carbon Dioxide Recovery Facility 
                               dated as of May 1, 1995

               10.10.5.1****   Guaranty of Contract for Operation and Maintenance dated May 12, 1995 by Westinghouse 
                               Power

               10.10.6*        Licensing Agreement for the Fluor Daniel Carbon Dioxide Recovery Process dated as of 
                               June 28, 1989, between Fluor Daniel Inc., a California corporation ("Fluor Daniel"), and
                               NEA

               10.11.1*        Ground Lease Agreement dated as of June 28, 1989, between NJEA and ETURC

               10.11.2*        Agreement of Sublease dated as of June 28, 1989, between ETURC and NJEA

               10.11.3*        Lease of Property dated as of June 1, 1986, between Prestwich Corporation and NE LP

               10.12.1*        Investment Agreement dated as of December 1, 1994, between Sanwa and Sanwa Bank Trust 
                               Company of New York under the Pledge, Trust and Intercreditor Agreement

               10.12.2*        Investment Agreement dated as of December 1, 1994, between Sanwa and Sanwa Bank Trust 
                               Company of New York under the Pledge, Trust and Intercreditor Agreement

               10.13*          Agreement between the Water and Sewer Commissioners of the Town of Bellingham and NEA 
                               dated as of December 13, 1988 and December 30, 1988, respectively

               10.14*          Mortgage, Assignment of Rents, Security Agreement and Fixture Filing dated June 29, 1989,
                               by NEA in favor of BECO, Commonwealth and Montaup

               10.15***        Declaration of Easements, Covenants, and Restrictions dated as of June 28, 1989 by NEA


               10.16*****      Operation and Maintenance Agreement dated as of November 21, 1997 by and between NE LP
                               and FPLE Operating Services

               10.17*****      Operation and Maintenance Agreement dated as of November 21, 1997 by and between NE LP 
                               and FPLE Operating Services

               10.18*****      Fuel Management Agreement, dated as of January 20, 1998, by and between NE LP and ESI 
                               Northeast Fuel , assigned by NE LP to NEA on January 20, 1998

               10.19*****      Fuel Management Agreement, dated as of January 20, 1998, effective retroactive to 
                               January 14, 1998, by and between NE LP and ESI Northeast Fuel

               10.20*****      Administrative Services Agreement dated as of November 21, 1997 between NE LP and  ESI GP

               10.21******     Reimbursement Agreement dated as of November 21, 1997 by and among FPL Group Capital,
                               Tractebel Power and NE LP

               16*******       Change in Certifying Accountant Letter

               21              Subsidiaries of the Registrants

               27.1            Financial Data Schedule - ESI Tractebel Funding Corp.

               27.2            Financial Data Schedule for the period January 1, 1998 to January 13, 1998 - Northeast
                               Energy Associates, A Limited Partnership

               27.3            Financial Data Schedule for the period January 1, 1998 to January 13, 1998 - North Jersey
                               Energy Associates, A Limited Partnership

               27.4            Financial Data Schedule for the period January 14, 1998 to December 31, 1998 - Northeast
                               Energy Associates, A Limited Partnership

               27.5            Financial Data Schedule for the period January 14, 1998 to December 31, 1998 - North 
                               Jersey Energy Associates, A Limited Partnership

               27.6            Financial Data Schedule - ESI Tractebel Acquisition Corp.

               27.7            Financial Data Schedule - Northeast Energy LP

*        Incorporated herein by reference from the Registration Statement on Form S-4, file no. 33-87902, filed with
         the Securities and Exchange Commission by the Funding Corp. on February 9, 1995, as amended.

**       Incorporated herein by reference from the Annual Report on Form 10-K filed by the Funding Corp. and the
         Partnerships on April 1, 1996.

***      Incorporated herein by reference from the Quarterly Report on Form 10-Q filed by the Funding Corp. and the
         Partnerships on November 14, 1996.

****     Incorporated herein by reference from the Annual Report on Form 10-K filed by the Funding Corp. and the
         Partnerships on March 31, 1997.

*****    Incorporated herein by reference from the Annual Report on Form 10-K filed by the Funding Corp. and the
         Partnerships on March 27, 1998.

******   Incorporated herein by reference from the Registration Statement on Form S-4, file no. 333-52397, filed with
         the Securities and Exchange Commission by the Acquisition Corp. on August 11, 1998, as amended.

*******  Incorporated herein by reference from Form 8-K filed by the Funding Corp. and the Partnerships on
         September 4, 1998.

         (b)  Reports On Form 8-K:

              None.

</TABLE>


SIGNATURES

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


                       ESI TRACTEBEL FUNDING CORP.
                     ESI TRACTEBEL ACQUISITION CORP.



                            KENNETH P. HOFFMAN
                            Kenneth P. Hoffman
                               Vice President
                       (Principal Executive Officer )

Date:  March 30, 1999

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


Signature and Title as of March 30, 1999:



KENNETH P. HOFFMAN              PETER D. BOYLAN
Kenneth P. Hoffman              Peter D. Boylan
Vice President                  Treasurer
(Principal Executive Officer)   (Principal Financial and
                                Principal Accounting Officer)


Directors:



ERIC M. HEGGESETH               WERNER E. SCHATTNER
Eric M. Heggeseth               Werner E. Schattner



GLENN E. SMITH                  MICHAEL W. YACKIRA
Glenn E. Smith                  Michael W. Yackira


SIGNATURES

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

            NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
      (ESI Northeast Energy GP, Inc. as Administrative General Partner)
           NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
      (ESI Northeast Energy GP, Inc. as Administrative General Partner)
                            NORTHEAST ENERGY, LP
      (ESI Northeast Energy GP, Inc. as Administrative General Partner)



                            KENNETH P. HOFFMAN 
                            Kenneth P. Hoffman
                Vice President of ESI Northeast Energy GP, Inc.
                        (Principal Executive Officer )

Date:  March 30, 1999

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


Signature and Title as of March 30, 1999:



KENNETH P. HOFFMAN             PETER D. BOYLAN
Kenneth P. Hoffman             Peter D. Boylan
Vice President of              Treasurer of
ESI Northeast Energy GP, Inc.  ESI Northeast Energy GP, Inc.
(Principal Executive Officer)  (Principal Financial and Principal
                               Accounting Officer and Director of
                               ESI Northeast Energy GP, Inc.)


Directors of ESI Northeast Energy GP, Inc.:



GLENN E. SMITH                  MICHAEL W. YACKIRA
Glenn E. Smith                  Michael W. Yackira