OPERATION AGREEMENT


     This Operation Agreement (the "Agreement") is made as 
of the 16th day of April, 1996, by and among 
Ridgewood/Providence Power Partners,, L.P., a Delaware 
limited partnership ("Owner"), Ridgewood/Providence 
Corporation, a Delaware corporation ("General Partner"), and 
Ridgewood Power Management Corporation, a Delaware 
corporation ("RPMC").

RECITALS

     Some of the facts and circumstances surrounding this 
Agreement are the following:

     The Owner owns an independent power project.  The 
General Partner is responsible for the operation and 
management of the Owner's project.  The Owner and the 
General Partner are beneficially owned by one or more 
business trusts organized and managed by Ridgewood Power 
Corporation.

     Ridgewood Power Corporation ("Ridgewood Power") has 
caused RPMC to be created in order to provide centralized 
operation, management and other services for projects 
beneficially owned by the business trusts, and has caused 
the parties to enter into this Agreement.  The project or 
projects for which RPMC will provide services (the 
"Projects") are listed on Exhibit A to this Agreement.

Section 1.  Services of RPMC.

     1.1.  General.  The Owner employs RPMC to provide the 
services described below and RPMC agrees to do so.  
RPMC shall provide operating personnel for the 
Projects and will be responsible for all day-to-day 
operations of the Projects.  The services provided 
by RPMC include, without limitation, management, 
purchasing, engineering, planning, maintenance, 
administrative, legal, financial, and regulatory 
services, as well as any other services Owner 
(through the General Partner) may need or request.

     1.2.  Responsibility.  RPMC shall act on behalf of and 
under the general direction of the General 
Partner.  Although the General Partner is 
empowered to specify the responsibilities of RPMC, 
to oversee RPMC and to direct RPMC to take action, 
the General Partner shall not specify how RPMC is 
to perform its obligations.  RPMC is an 
independent contractor and not an agent of the 
General Partner or the Owner.  Ridgewood Power is 
authorized to act on behalf of the General Partner 
in supervising RPMC.

Section 2.  Reimbursement of RPMC.  

     RPMC shall charge Owner for all direct costs incurred 
in connection with the Projects and shall also charge Owner 
an allocable amount of RPMC's indirect costs and overhead as 
described below.

     2.1.  Direct Costs.  Costs and expenses paid by RPMC that 
relate to a single Project shall be allocated to 
that Project.  

     2.2.  Multiple Project Costs and Other Indirect Costs.  
Costs and expenses paid by RPMC that relate to more 
than one Project or to Projects and to facilities 
owned by other persons shall be allocated among the 
Projects and facilities affected on the basis of 
time records, comparative value of the work to each 
Project or facility, size of each Project or 
facility, number of employees affected, asset value 
of Project or facility, investment in each Project 
or facility or another reasonable basis approved 
by RPMC and the General Partner.  A share of 
overhead and other indirect costs that do not 
relate to identifiable Projects shall be allocated 
to Owner on the basis of investment in each 
Project or another reasonable basis approved by 
RPMC and the General Partner.  All allocations of 
costs under this Section 2.2 shall be made 
consistently with generally accepted accounting 
principles, consistently applied.

     2.3.  Payment.  RPMC shall be reimbursed by Owner for all 
costs incurred by it and allocable to Projects 
under Sections 2.1 and 2.2.  RPMC may operate or 
participate in a centralized cash management system 
with Owner, Ridgewood Power and other entities 
affiliated with Ridgewood Power and payments may be 
made through that system without the need for Owner 
to reimburse RPMC directly.  If payments are not 
made through that system, Owner shall reimburse 
RPMC at least monthly and not later than 15 days 
after receipt of a statement from RPMC.

     2.4.  Common Expenses with Ridgewood Power.  If Ridgewood 
Power provides space, facilities, personnel, goods 
or services to RPMC that are used by RPMC in 
performing its responsibilities under this 
Agreement, RPMC shall not charge or allocate 
charges to Projects or to other facilities that 
RPMC manages in excess of the amounts, if any, 
charged to RPMC by Ridgewood Power for those 
items.

     2.5.  General Limitation.  RPMC shall not be 
reimbursed for any amount in excess of the actual 
or properly allocated cost of the goods and 
services it provides to the Projects.

Section 3.  Indemnification.  

     3.1.  Indemnification of Owner.  RPMC shall indemnify and 
hold Owner harmless from and against any claim, 
liability, damage, expense, legal action, lien, 
loss or other obligation arising out of the actions 
or omissions of RPMC taken under this Agreement or 
in connection with this Agreement or the Projects.  
RPMC shall indemnify the partners of the Owner and 
their directors, officers, employees, agents, 
affiliates, successors and assigns on the same 
basis as the Owner.

     3.2.  Waivers of Subrogation and Contribution.  RPMC 
waives any right of subrogation or contribution 
against the Owner or other persons indemnified 
under Section 3.1 in connection with any liability 
or obligation satisfied by RPMC and relating to 
RPMC's responsibilities under this Agreement.

Section 4.  Term of Agreement.

     This Agreement may be terminated at any time without 
penalty by either the Owner or RPMC on 60 days' prior 
written notice to the other parties.  This Agreement may 
also be terminated by action of any trust or investment 
program that is a beneficial owner of equity securities of 
the Owner if (a) the managing shareholder, general partner 
or board of directors of the trust or program so decides or 
(b) a majority in interest of the holders of equity 
securities of the trust or program (excluding any management 
share or other special equity security owned solely by a 
managing shareholder or general partner) vote to terminate 
this Agreement.  In that case, this Agreement terminates 60 
days after all parties are given written notice of the 
decision to terminate.  

Section 5.  Other Matters.

     5.1.  Non-exclusivity.  RPMC may perform services for 
other persons affiliated or not affiliated with 
Ridgewood Power.  Owner and the General Partner 
waive any objection to (a) the fact that now or in 
the future Robert E. Swanson and other persons who 
are directors, officers, employees or affiliates of 
Ridgewood Power may have similar positions with 
RPMC and may have a financial interest in RPMC and 
(b) the fact that RPMC and its directors, officers 
and employees may be employed by or have financial 
interests in Ridgewood Power and its affiliates.

     5.2.  Assignment.  This Agreement may not be assigned by 
either party.  Notwithstanding the foregoing, in 
the event of an unapproved assignment, the 
assignee shall also be responsible for performance 
of assignor's responsibilities and both assignor 
and assignee shall be liable to the other parties 
for breach of this covenant.  

     5.3.  Amendments.  This Agreement can be amended only by 
a writing signed by all parties.  In addition, no 
amendment that materially increases the obligations 
of the Owner or the General Partner or that 
materially decreases the obligations of RPMC shall 
become effective until 45 days after notice of the 
amendment together with the text thereof has been 
given to all holders of equity securities of the 
trusts or other investment programs that 
beneficially own the securities of the Owner and 
the General Partner.  

     5.4.  Governing Law.  This Agreement is governed by the 
laws of New Jersey applying to contracts having 
their most significant contacts with New Jersey.

     5.5.  Entire Agreement.  This Agreement is the entire 
agreement among the parties as to its subject 
matter and supersedes all prior agreements among 
them.  

     5.6.  Captions and Counterparts.  The captions of this 
Agreement are for reference only and shall not be 
used in construing its meaning.  This Agreement may 
be executed in counterparts, each of which shall be 
an original and all of which shall be considered 
to be a single document.

     5.7.  Jurisdiction and Venue.  ALL LAWSUITS IN CONNECTION 
WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE 
STATE OR FEDERAL COURTS SITTING IN OR FOR THE COUNTY 
OF BERGEN, STATE OF NEW JERSEY.  THE PARTIES AGREE 
THAT THOSE COURTS SHALL HAVE PERSONAL JURISDICTION 
AND AGREE TO VENUE IN THOSE COURTS.  PROCESS MAY BE 
SERVED IN ANY MANNER PERMITTED BY THE RULES OF THE 



COURT DESCRIBED IN THIS SECTION IN WHICH AN ACTION 
IS BROUGHT.  

     IN WITNESS WHEREOF, the parties have signed this 
Agreement as of the date first stated above.
          

RIDGEWOOD PROVIDENCE POWER PARTNERS, L.P., Owner
 By:  RIDGEWOOD/PROVIDENCE CORPORATION, General Partner
 
 
 By:/s/ Thomas R. Brown
 Name:  Thomas R. Brown
 Title:  Senior Vice President
 
 
 RIDGEWOOD/PROVIDENCE CORPORATION, General Partner
 
 
 By:  /s/ Thomas R. Brown
 Name:  Thomas R. Brown
 Title:  Senior Vice President
 
 
 RIDGEWOOD POWER MANAGEMENT CORPORATION
 
 
 By:  /s/ Thomas R. Brown
 Name:  Thomas R. Brown
 Title:  Senior Vice President


EXHIBIT A
PROJECTS SUBJECT TO AGREEMENT

Providence Project at the Rhode Island State Central 
Landfill