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                                UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC  20549

                                  FORM 10-Q

            [X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934
              For the quarterly period ended September 30, 1998
                                   
                       Commission File Number 33-83618

                        SELKIRK COGEN PARTNERS, L.P.
     (Exact name of Registrant (Guarantor) as specified in its charter)

                     Delaware			             51-0324332
       (State or other jurisdiction of             (IRS Employer
      incorporation or organization)             Identification No.)
      
          
                      SELKIRK COGEN FUNDING CORPORATION
           (Exact name of Registrant as specified in its charter)

                     Delaware			             51-0354675
       (State or other jurisdiction of             (IRS Employer
      incorporation or organization)             Identification No.)

               One Bowdoin Square, Boston, Massachusetts 02114
        (Address of principal executive offices, including zip code)

                               (617) 788-3000
            (Registrant's telephone number, including area code)

         SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                8.65% First Mortgage Bonds Due 2007, Series A
                8.98% First Mortgage Bonds Due 2012, Series A
                              (Title of class)


	Indicate by check mark whether  the  Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for  such  shorter  period  that  the
Registrant  was  required  to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes X No 
												   ---	 ---
	As of November 11, 1998, there were  10 shares of common stock of Selkirk
Cogen Funding Corporation, $1 par value outstanding.	
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             This document consists of 20 pages of which this page is page 1.

<PAGE>		 




                              TABLE OF CONTENTS



						                												                               ----
                       PART I.  FINANCIAL INFORMATION

																		Page
																		----
Item 1.	Financial Statements (unaudited)							    

		Condensed Consolidated Balance Sheets as of September 30, 1998 
		and December 31, 1997..........................................	   3

		Condensed Consolidated Statements of Operations for the three 
		and nine months ended September 30, 1998 and 1997............. .   4

		Condensed Consolidated Statements of Cash Flows for the three 
		and nine months ended September 30, 1998 and 1997...............   5

		Notes to Condensed Consolidated Financial Statements............   6

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

		Results of Operations...........................................   8


		Liquidity and Capital Resources.................................  11


                         PART II.  OTHER INFORMATION


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

SIGNATURES.............................................................	  19







                                      2

<PAGE>








                        
<TABLE>
                        SELKIRK COGEN PARTNERS, L.P.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)
              
<CAPTION>							
											    (unaudited)
                       				     		September 30,   December 31, 
						                            1998		    1997
						                        -------------	------------
<S>												      <C>	       	<C>
ASSETS		
------										
Current assets:									
  Cash............................................ $     924     $    1,337 
  Restricted funds................................    31,289          6,509
  Accounts receivable.............................    14,306         17,764 
  Due from affiliates.............................        16             14 
  Fuel inventory and supplies.....................     5,236          4,936
  Other current assets............................       517	        338
  				                   				   ---------	   ---------
    	Total current assets......................    52,288         30,898 
										
  Plant and equipment, net........................   312,185        321,537 
  Long-term restricted funds......................    27,091         21,494 
  Deferred financing charges, net.................    11,072         11,945 
                                     			   ---------	   ---------

				Total Assets		              $  402,636     $  385,874
   			                                       ---------	   ---------
   			                                       ---------	   ---------
LIABILITIES AND PARTNERS' CAPITAL									
---------------------------------										
Current liabilities:									
  Accounts payable................................ $     188 	  $   1,663 
  Accrued bond interest payable...................     8,945 	        382 
  Accrued expenses................................    10,258         14,665 
  Due to affiliates...............................       437  	        498 
  Current portion of long-term bonds..............     3,440 	      3,298 
	  					                           ---------	  ----------
	    Total current liabilities.................    23,268         20,506 
										
  Deferred revenues...............................	   6,747		  ---
  Other long-term liabilities.....................    16,019         11,695 
  Long-term bonds, less current portion...........   383,932        385,955 
										
  General partners' capital.......................      (262)          (311)
  Limited partners' capital.......................   (27,068)       (31,971) 
	   											    ---------       --------
	    Total partners' capital...................   (27,330)       (32,282) 
											        ---------	    --------

				Total Liabilities and
					 Partners' Capital            $  402,636     $  385,874 
												    --------- 	   ---------
												    ---------	   ---------
<FN> See Notes to  Condensed  Consolidated  Financial Statements. 
</TABLE>


                                      3
<PAGE>
				 																							
<TABLE>
                        SELKIRK COGEN PARTNERS, L.P.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (in thousands)
                                 (unaudited)
											
											
<CAPTION>											
						             For the                  For the 																		
                               Three Months Ended	     Nine Months Ended	
                              ---------------------	    --------------------

                              Sept. 30,    Sept. 30,	Sept. 30,  Sept. 30,
                 		        1998         1997		  1998       1997
               	              ---------   ---------	   ---------   ---------
<S>                              <C>        <C>          <C>          <C>
Operating revenues:								   

 Electric and steam.........  $  43,251   $  38,238    $ 120,599   $ 116,292   
 Gas resale.................        170       4,148		   5,348      10,869
						      ---------   ---------	   ---------   ---------
    Total operating 
      revenues..............	 43,421      42,386 	 125,947	 127,161
Cost of revenue.............     27,435      29,503		  84,313	  89,918
							  ---------   ---------	   ---------   ---------
Gross Profit................     15,986      12,883 	  41,634	  37,243
						 	 	   			
Other operating expenses:										
 Administrative services -
   affiliates...............	     17         874        1,338       2,212 	
 Other general and 
   administrative expenses..	    250 		643        1,346       2,052 	
 Amortization of deferred
   financing charges........	    290         292 		 873         878 	
							  ---------   ---------	   ---------   ---------
	Total other operating
	  expenses..............        557       1,809 	   3,557	   5,142
							  ---------   ---------	   ---------   ---------
				 
Operating income............     15,429      11,074 	  38,077      32,101
											
Interest (income) expense:
  Interest income...........       (565)       (523)	  (1,639)	  (1,622)
  Interest expense..........	  8,564		  8,629		  25,772	  25,925
							  ---------   ---------	   ---------   ---------
    Net interest expense....      7,999		  8,106		  24,133	  24,303

Net income..................  $   7,430   $   2,968	   $  13,944   $   7,798
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------


Allocated to:
  General partners..........  $      75	  $      29    $     140   $      78
  Limited partners..........	  7,355 	  2,939 	  13,804	   7,720
                              ---------   ---------	   ---------   ---------                  
	Total...................  $   7,430   $   2,968    $  13,944   $   7,798	
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------  			    					 						                                     	
<FN>
See Notes to Condensed Consolidated Financial Statements.										
</TABLE>
                                      4
<PAGE>


<TABLE>
                        SELKIRK COGEN PARTNERS, L.P.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (in thousands)
                                 (unaudited)
												
<CAPTION>												
                                   									 			 
                                     For the                  For the 																		
                                Three Months Ended	      Nine Months Ended	
                              ---------------------	    --------------------

                              Sept. 30,   Sept. 30,     Sept. 30,  Sept. 30,
                 		        1998        1997	     1998       1997
                 		      ----------  ---------     ---------  ---------
<S>                            <C>           <C>          <C>	     <C>
										                                    		 
Net cash provided by  
 operating activities.......   $ 27,074   $  16,001	   $  39,120   $ 31,118
												
Cash flows provided by 
 (used in) investing 
  activities:											
   Plant and equipment 
    additions...............       ---          (18)         (14)        16
    						   ---------  ----------   ----------   --------
  			                                    	   
	Net cash provided by(used in)
	  investing activities..       ---          (18)         (14)        16
												
Cash flows provided by 
 (used in) financing 
  activities:											
   Restricted funds.........    (21,851)    (14,565)     (28,646)   (15,253) 
   Cash distributions.......     (5,665)      ---         (8,992)	(14,920)
   Payments of principal on
    long-term debt..........      ---		  ---	      (1,881)	 (1,061)
   Advances from a 
    customer................      ---         ---          ---	        (17)
                               ---------   ---------    ---------  ---------
    Net cash used in 
       financing activities..   (27,516)     (14,565)     (39,519)   (31,251)
												
Net increase (decrease)
 in cash....................       (442)      1,418         (413)      (117)
Cash at beginning 
 of period..................      1,366 	  1,056		   1,337      2,591
							  ----------  ----------   ----------  ---------
Cash at end of period.......  $     924   $   2,474    $     924   $  2,474
                              ----------  ----------   ----------  ---------
          					  ----------  ----------   ----------  ---------
   
Supplemental disclosures of 
 cash flow information:										

  Cash paid for interest....  $   ---    $    ---      $  17,210  $  17,320   				
  		                       ---------   ---------   ---------  ---------                                 
							   ---------   ---------   ---------  --------- 

<FN>
See Notes to Condensed Consolidated Financial Statements.										
</TABLE>											
											
																				
                                      5
<PAGE>

                        SELKIRK COGEN PARTNERS, L.P.

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (unaudited)

Note 1. Basis of Presentation

The  accompanying  unaudited   condensed  consolidated  financial  statements
consolidate Selkirk Cogen Partners, L.P.  and  its  wholly-owned  subsidiary,
Selkirk  Cogen  Funding  Corporation,  (collectively the "Partnership").  All
significant intercompany accounts and transactions have been eliminated.

The condensed  consolidated  financial  statements  for  the  interim periods
presented are unaudited and have been prepared  pursuant  to  the  rules  and
regulations  of  the  Securities  and  Exchange  Commission.  The information
furnished in the  condensed  consolidated  financial  statements reflects all
normal recurring  adjustments  which,  in  the  opinion  of  management,  are
necessary  for  a  fair  presentation  of such financial statements.  Certain
information  and  footnote   disclosures   normally   included  in  financial
statements  prepared  in  accordance  with  generally   accepted   accounting
principles  have  been condensed or omitted pursuant to rules and regulations
applicable to interim  financial  statements.  Certain reclassifications have
been made to the Condensed Consolidated  Statements  of  Operations  for  the
three  and  nine  months ended September 30, 1998 to conform with the current
period's basis of presentation.

These  condensed  consolidated  financial   statements   should  be  read  in
conjunction with the audited consolidated financial  statements  included  in
the Partnership's December 31, 1997 Annual Report on Form 10-K.


Note 2.  New accounting pronouncements

During  1997,  the  Financial  Accounting  Standards  Board  issued  two  new
accounting  standards that the Partnership will adopt in 1998.  SFAS No. 130,
"Reporting Comprehensive  Income"  will  require  disclosure on comprehensive
income and its components.  SFAS No. 131, "Disclosures about Segments  of  an
Enterprise  and Related Information" will require disclosure of financial and
descriptive information on  reportable  operating  segments.  The adoption of
these  standards  is  not  expected  to  have  a  material  impact   on   the
Partnership's results of operations or financial position.
                                     
                                      6
									  
                                    
<PAGE>



                        SELKIRK COGEN PARTNERS, L.P.

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (unaudited)
                                 (continued)

In  April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5  "Reporting  on  the Costs of Start-Up Activities"
("SOP 98-5").  SOP 98-5 provides  guidance  on  the  financial  reporting  of
start-up  costs  and  organization  costs  ("start-up  costs").   It requires
start-up costs to be expensed as incurred and previously capitalized start-up
costs to be expensed as of the  date  of adoption.  SOP 98-5 is effective for
fiscal years beginning after December  15,  1998.   Management  has  not  yet
quantified the impact of adopting SOP 98-5.

In  June  1998,  the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and  Hedging  Activities   ("Statement   133").   Statement  133  establishes
accounting and reporting standards requiring that every derivative instrument
be recorded in the balance sheet as either an asset or liability measured  at
its  fair value.  Changes in the derivatives fair value must be recognized in
the income statement  as  a  gain  or  loss  unless specific hedge accounting
criteria are met.  Statement 133 is  effective  for  fiscal  years  beginning
after  June  15,  1999.   Statement  133  must  be  applied to (a) derivative
instruments  and  (b)  certain  derivative  instruments  embedded  in  hybrid
contracts  that  were  issued,  acquired,  or  substantively  modified  after
December 31, 1997 (and, at  the  company's election, before January 1, 1998).
Management has not yet quantified the impact of adopting Statement 133 on the
Partnership's financial statements and has  not  yet determined the timing of
or method of its adoption of Statement 133.

                                      7
                                    
<PAGE>

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL 	CONDITION AND
		 -------------------------------------------------------------------
		 RESULTS OF OPERATIONS
		 ---------------------

Results of Operations

Three and Nine Months Ended September 30, 1998 Compared to the Three and Nine
Months Ended September 30, 1997


Net  income  for  the quarter ended September 30, 1998 was approximately $7.4
million as compared to $3.0 million for the corresponding period in the prior
year.   Net  income  for  the  nine  months  ended  September  30,  1998  was
approximately $13.9 million as compared to $7.8 million for the corresponding
period in the prior year.   The  increase  in  net income for the quarter and
nine months ended September 30, 1998 is  primarily  due  to  an  increase  in
delivered  energy to electric customers and decreases in fuel costs and other
operating expenses.

The Partnership entered into a  Master Restructuring Agreement (as amended on
March 31, 1998, April 21, 1998, April 30, 1998, May 7, 1998 and June 2, 1998,
the "MRA")  dated  July  9,  1997  among  Niagara  Mohawk  Power  Corporation
("Niagara  Mohawk"),  the  Partnership  and  certain  other non-utility power
generators selling electricity to Niagara  Mohawk (the "Settling IPP's").  On
August  31,  1998  the  Partnership  and  Niagara  Mohawk   consummated   the
transactions  relating to the Amendment and Restatement of the Niagara Mohawk
Power Purchase Agreement ("Amended  and  Restated Unit 1 Agreement") pursuant
to the MRA.  For a description of certain applicable provisions  of  the  MRA
and related transactions see "Unit 1 Restructuring" below.

Total  revenues for the quarter and nine months ended September 30, 1998 were
approximately $43.4 million and $125.9  million  as compared to $42.4 million
and $127.2 million for the corresponding periods in the prior year.


Electric Revenues (dollars and kWh's in millions):
-------------------------------------------------

								 For the Three Months Ended
                     September 30, 1998              September 30, 1997		 
       	      ------------------------------- -------------------------------
	          Dollars kWh's Capacity Dispatch Dollars kWh's Capacity Dispatch
			  ------- ----- -------- -------- ------- ----- -------- --------
Niagara Mohawk  11.7  152.2   86.00%  100.00%     7.4  70.9   40.19%   44.93%
Con Edison      31.5  575.2   98.30%   98.87%    30.8 495.9   79.87%   89.06%

                                      8
                                    
<PAGE>



Electric Revenues (dollars and kWh's in millions):
-------------------------------------------------

                                 For the Nine Months Ended
                     September 30, 1998             September 30, 1997	
			  ------------------------------- -------------------------------
	          Dollars kWh's Capacity Dispatch Dollars kWh's Capacity Dispatch
			  ------- ------ ------- -------- ------- ----- -------- --------
Niagara Mohawk  27.0   313.4  59.77%   67.98%   23.6   259.4   49.02%  54.21%
Con Edison      93.5 1,599.4  92.12%   95.88%   92.5 1,400.6   79.01%  89.81%


Revenues from Niagara Mohawk increased approximately $4.3  million  and  $3.4
million  for the quarter and nine months ended September 30, 1998 as compared
to the corresponding periods in the prior year.  The increase in revenues for
the quarter and nine months ended September  30, 1998 was primarily due to an
increase in delivered energy as evidenced by the increase in capacity factors
from 40.19% to 86.00%  and  49.02%  to  59.77%,  respectively,  and  improved
contract  pricing  resulting  from  the execution of the Amended and Restated
Unit 1 Agreement on August 31,  1998 with terms and conditions retroactive to
July 1, 1998.  During the nine months ended  September  30,  1998,  with  the
exception  of  March  and  April,  Niagara  Mohawk dispatched Unit 1 on-line.
Energy delivered during the  majority  of  January  and  the entire months of
February, July, August and September was sold at full contract rates.  Energy
delivered during the first four days of January, and the entire months of May
and June was sold under special dispatch a rrangements which called  for  the
pricing  of  delivered  energy  at  variable  rates which were less than full
contract rates.   Had  the  Partnership  not  entered  into  special dispatch
arrangements, the Unit would have otherwise been dispatched  off-line  during
the  relevant periods.  During the nine months ended September 30, 1997, with
the exception of April, May  and  September, Niagara Mohawk dispatched Unit 1
on-line.  Energy delivered during the months of June,  July  and  August  was
sold  at  full contract rates.  Energy delivered during January, February and
March was sold  under  special  dispatch  arrangements  which  called for the
pricing of delivered energy at variable rates less than full contract  rates.
Revenues  for  energy  pursuant to special dispatch arrangements with Niagara
Mohawk for  the  quarter  and  nine  months  ended  September  30,  1998 were
approximately $0 and $1.4 million as compared to $0 and $4.8 million for  the
corresponding periods in the prior year.

Revenues  from  Consolidated  Edison Company of New York, Inc. ("Con Edison")
for  the  quarter  and  nine   months  ended  September  30,  1998  increased
approximately $0.7 million and $1.0 million as compared to the  corresponding
periods  in the prior year.  The increase in delivered energy for the quarter
and nine months ended  September  30,  1998  as  evidenced by the increase in
capacity factors from 79.87% to 98.30% and 79.01%  to  92.12%,  respectively,
was the primary contributor to the increase in revenues from Con Edison.
                                      
                                      9
                                    
<PAGE>


There were no steam revenues for the quarter ended September 30, 1998.  Steam
revenues for the nine months ended September 30, 1998 of $242.0 thousand were
reduced  by  a  reserve for the same amount to reflect the anticipated annual
true-up so that General Electric would  be  charged a nominal amount which is
the annual equivalent of 160,000lbs/hr.  There were no steam revenues for the
quarter ended September 30, 1997.  Steam revenues for the nine  months  ended
September  30,  1997 of $1,053.4 thousand were reduced by a reserve of $881.0
thousand to reflect the anticipated  annual true-up.  Delivered steam for the
quarter and nine months ended September 30, 1998 was 285.5 million pounds and
969.0 million pounds as compared to 287.3 million pounds and 1,116.0  million
pounds for the corresponding periods in the prior year.

Gas   resale   revenues  for  the  quarter  ended  September  30,  1998  were
approximately $0.2 million on  sales  of  0.1  million MMBtu's as compared to
$4.1 million on sales of 1.5 million MMBtu's for the corresponding period  in
the  prior year.  Gas resale revenues for the nine months ended September 30,
1998 were approximately $5.3 million  on  2.3  million MMBtu's as compared to
approximately  $10.9  million  on  sales  of  4.3  million  MMBtu's  for  the
corresponding period in the prior year.  The $3.9 million  and  $5.6  million
decrease  in  gas  resale  revenues  during the quarter and nine months ended
September 30, 1998 was primarily due  to  lower natural gas resale prices and
higher dispatch of Units 1 and 2, which resulted in lower volumes of  natural
gas  becoming  available for resale at lower prices.  The decrease in natural
gas resale prices during the  nine  months ended September 30, 1998 generally
resulted from more moderate temperatures in the Northeast region as  compared
to the colder temperatures, which resulted in higher demand for natural  gas,
during  the  corresponding  period in the prior year.  The Partnership enters
into gas resale  transactions  during  periods  when  Units  1  and 2 are not
operating at full capacity.

Costs of revenues for the  quarter  and  nine months ended September 30, 1998
were approximately $27.4 million  and  $84.3  million  on  purchases  of  7.1
million  MMBtu's  and 21.1 million MMBtu's as compared to approximately $29.5
million and $89.9  million  on  purchases  of  7.1  million  MMBtu's and 21.1
million MMBtu's for the corresponding periods in the prior year.  The largest
component of the decrease for the quarter and nine months ended September 30,
1998 was fuel costs, which decreased $1.5 million and $5.2 million  from  the
corresponding  periods  in  the prior year.  The decrease in the cost of fuel
was primarily due to a decrease in  contract firm fuel rates from lower index
fuel prices and a decrease in transportation demand costs.

Total  other  operating  expenses  for  the  quarter  and  nine  months ended
September 30, 1998 were  approximately  $0.6  million  and  $3.6  million  as
compared to approximately $1.8 million and $5.1 million for the corresponding
periods  in the prior year.  The decrease in other operating expenses for the
quarter and  nine  months  ended  September  30,  1998  is  primarily  due to
decreases  in  affiliate  administrative  services  and  external  legal  and
consulting services.  Net interest expense for the quarter  and  nine  months
ended  September 30, 1998 of approximately $8.0 million and $24.1 million are
comparable to the corresponding periods in the prior year.

                                     10
                                    
<PAGE>

Liquidity and Capital Resources

Net cash flows provided  by  operating  activities  for  the quarter and nine
months ended September 30, 1998 were approximately $27.1  million  and  $39.1
million  as compared to approximately $16.0 million and $31.1 million for the
corresponding periods in the  prior  year.   The  increase  in net cash flows
provided by operating activities  for  the  quarter  and  nine  months  ended
September 30, 1998 is primarily due to the increase in net income and the net
activity   of   approximately   $6.9   million  resulting  from  the  Unit  1
Restructuring see "Unit 1 Restructuring" below.

Net cash flows used in  investing  activities for the quarter ended September
30, 1998 were approximately $0 as compared to approximately $18,000  for  the
corresponding  period  in  the  prior year.  Net cash flows used in investing
activities for the nine  months  ended  September 30, 1998 were approximately
$14,000 as compared to net cash flows provided  by  investing  activities  of
approximately  $16,000  for  the corresponding period in the prior year.  Net
cash flows used in  or  provided  by investing activities primarily represent
additions or adjustments to plant and equipment, respectively.

Net cash flows used in financing activities for the quarter and  nine  months
ended  September  30, 1998 were approximately $27.5 million and $39.5 million
as  compared  to  approximately  $14.6  million  and  $31.3  million  for the
corresponding periods in the prior year.  The increase in net cash flows used
in financing activities for the quarter and nine months ended  September  30,
1998  is  primarily  due  to  more  cash  becoming  available to deposit into
Restricted Funds and distribute  to  Partners.  Pursuant to the Partnership's
Depositary and Disbursement Agreement, administered by Bankers Trust Company,
as  depositary  agent,  the  Partnership  is  required  to  maintain  certain
Restricted Funds.  Net cash flows used in financing activities for  the  nine
months  ended  September 30, 1998 primarily represents net deposits of monies
into the  Principal  Fund,  Interest  Fund,  Debt  Service  Reserve  Fund and
Partnership Distribution Fund and distributions of monies to  Partners.   Net
cash flows used in financing activities for the nine months  ended  September
30,  1997  primarily represents net deposits of monies into the Interest Fund
and Debt  Service  Reserve  Fund  and  distributions  of  monies to Partners.
Interest and principal payments to Bondholders are scheduled  for  June  26th
and December 26th of each year.

                                     11
                                    
<PAGE>


In 1994 and 1995 Con Edison claimed the right to acquire that portion of Unit
2's firm natural gas supply  not  used  in  operating  Unit 2, when Unit 2 is
dispatched off-line or at less than full  capability  ("non-plant  gas"),  or
alternatively  to  be  compensated  for  100%  of  the  margins  derived from
non-plant gas sales.  The  Con  Edison  Power  Purchase Agreement contains no
express language granting Con Edison any rights with respect to  such  excess
natural  gas.  Nevertheless, Con Edison argued that, since payments under the
contract include fixed fuel charges which  are  payable whether or not Unit 2
is dispatched on-line, Con Edison is entitled to exercise such  rights.   The
Partnership vigorously disputes the position adopted by Con Edison, and since
the  commencement  of  Unit  2's  operation in 1994 has made and continues to
make, from time  to  time,  non-plant  gas  sales  from  Unit 2's gas supply.
Although representatives of Con Edison have  expressly  reserved  all  rights
which  Con  Edison  may  have  to  pursue  its asserted claim with respect to
non-plant  gas  sales,  the  Partnership   has  received  no  further  formal
communication from Con Edison on this subject since 1995.  In the  event  Con
Edison  were  to  pursue  its asserted claim, the Partnership would expect to
pursue all available legal remedies, but  there  can be no certainty that the
outcome of such remedial action would be favorable to the Partnership or,  if
favorable,  would provide for the Partnership's full recovery of its damages.
The Partnership's cash  flows  from  the  sale  of  electric  output would be
materially and adversely affected if Con Edison were to prevail in its  claim
to Unit 2's excess natural gas volumes and the related margins.

On  July 21, 1998 the New York Public Service Commission ("NYPSC") approved a
plan submitted by Con Edison for the divestiture of certain of its generating
assets  (the  "Con  Edison  Divestiture  Plan").   Although  the  Con  Edison
Divestiture Plan does not include any proposal  by Con Edison for the sale or
other disposition of its contractual obligations for  purchasing  power  from
non-utility  generators,  like  the  Partnership,  the  NYPSC has ordered Con
Edison  to  submit  a  report  regarding  the  feasibility  of  divesting its
non-utility generator  entitlements.   At  this  time,  the  Partnership  has
insufficient  information  to  determine  whether,  in  the  course  of these
proceedings at the  NYPSC,  Con  Edison  may  seek  to  assign its rights and
obligations  under  the  Con  Edison  Power  Purchase  Agreement   with   the
Partnership  to a third party or to take some other action for the purpose of
divesting itself of the power  purchase  obligations under such contract; nor
can the Partnership evaluate the impact which any such  assignment  or  other
action,  if  proposed,  may  ultimately have on the Con Edison Power Purchase
Agreement.

Future operating results and  cash  flows  from  operations are dependent on,
among other things, the performance of equipment and processes  as  expected,
level  of  dispatch,  prices  for  electricity,  fuel deliveries and price as
contracted and the receipt of  certain  capacity and other fixed payments.  A
significant change in any of these factors  could  have  a  material  adverse
effect on the results for the Partnership.

The  Partnership  believes that based on current conditions and circumstances
it will have  sufficient  liquidity  available  provided  by  cash flows from
operations to fund existing debt obligations and operating costs.

                                     12
                                    
<PAGE>


Unit 1 Restructuring

In October 1995, Niagara Mohawk filed its "Power Choice"  proposal  with  the
NYPSC.   On  October 12, 1995, Niagara Mohawk filed a Report on Form 8-K with
the Securities and Exchange  Commission  explaining the Power Choice proposal
(the "Power Choice Statement").   In  the  Power  Choice  Statement,  Niagara
Mohawk  described  a number of related proposals to restructure the utility's
business, including the reorganization of its assets and the renegotiation of
its contracts with generators which,  like the Partnership, are not regulated
as utilities ("non-utility generators").  Following the filing of  the  Power
Choice proposal with the NYPSC, the Partnership joined with other non-utility
generators   selling   power  to  Niagara  Mohawk  to  commence  negotiations
concerning a  joint  settlement  that  would  result  in  the  termination or
restructuring of their respective power purchase agreements.  On July 9, 1997
Niagara Mohawk, the Partnership and the Settling IPP's entered into the  MRA.
On  February  24,  1998,  the  NYPSC  approved Niaga ra Mohawk's Power Choice
settlement proposal, including the implementation of the MRA.

The closing of the transactions provided under the MRA for the Settling IPP's
other than the Partnership occurred on June 30, 1998 (the "Other Settling IPP
Closing").  At the  Other  Settling  IPP  Closing,  the Partnership made $2.2
million in payments related to the agreed allocation among the Settling IPP's
of certain costs and benefits.  Pursuant to the terms of the MRA, the closing
of the MRA transactions  between  the  Partnership  and  Niagara  Mohawk  was
deferred until August 31, 1998.

On  August  31,  1998  the  Partnership  and  Niagara  Mohawk consummated the
transactions relating to the Amended  and  Restated Unit 1 Agreement pursuant
to the MRA.  As contemplated by the MRA, on that  date  (i)  the  Partnership
notified   Niagara   Mohawk  of  the  Partnership's  determination  that  the
requirements of the Partnership's Trust  Indenture,  dated  as of May 1, 1994
(the "Indenture"), with respect  to  the  restructuring  of  certain  project
contracts  relating  to  the  operation of Unit 1 of the Selkirk facility had
been satisfied; (ii) the Amended and Restated Power Purchase Agreement, dated
as of  July  1,  1998,  between  the  Partnership  and  Niagara Mohawk became
effective; and (iii) Niagara Mohawk made as  its  net  share  of  the  agreed
allocation   among   IPP's   for   certain   adjustments,  cash  payments  of
approximately $10.3  million  into  the  Partnership's  Project  Revenue Fund
maintained at Bankers Trust Company, as Depositary Agent  under  the  May  1,
1994  Deposit  and  Disbursement  Agreement.   In  addition,  the Partnership
delivered   notices   to   Paramount   Resources  Limited  ("Paramount")  and
TransCanada Pipelines Limited  ("TransCanada")  that  the  Second Amended and
Restated Gas Purchase  Contract,  dated  as  of  May  6,  1998,  between  the
Partnership  and  Paramount, and the Amending Agreement to Gas Transportation
Contract, dated as of July 20,  1998, between the Partnership and TransCanada
had become effective.  On September 16, 1998, the Partnership filed a current
report on Form 8-K disclosing the consummation on  August  31,  1998  of  the
transactions  relating  to  the  Amended  and  Restated  Unit 1 Agreement and
including the related Project documents as exhibits.

                                      13
                                    
<PAGE>


The term of the Amended and Restated Unit 1 Agreement is ten years, effective
July 1, 1998.  The $2.2 million payment made by the  Partnership  to  Niagara
Mohawk  and  the  $10.3  million of payments received by the Partnership from
Niagara Mohawk (representing net receipts to the Partnership of approximately
$8.1 million) were a condition to  the  Amended and Restated Unit 1 Agreement
and are being deferred to be amortized over  the  life  of  the  Amended  and
Restated  Unit  1  Agreement.   In  addition,  approximately  $1.2 million in
restructuring costs have been capitalized and will be amortized over the life
of  the  Amended  and  Restated  Unit  1  Agreement.   Deferred  revenues  of
approximately  $173,000  are  included  in  the  Partnership's  revenues from
Niagara Mohawk for the quarter and nine  months  ended  September  30,  1998.
Deferred  Revenues  of approximately $6.7 million appear on the Partnership's
Consolidated Balance Sheet at September 30, 1998.

On August 31, 1998, the  Partnership  received written notice from Standard &
Poor's  Corporation  ("S&P")  that,  after  giving  effect  to  the  Unit   1
Restructuring,  S&P  affirmed  its "BBB-" rating of the Selkirk Cogen Funding
Corporation's Bonds and removed the  rating  from CreditWatch.  On August 27,
1998, the Partnership received written notice from Moody's Investors Service,
Inc. ("Moody's") that, after giving  effect  to  the  Unit  1  Restructuring,
Moody's affirmed its "Baa3" rating of the Selkirk Cogen Funding Corporation's
Bonds,  changed the outlook of the Bonds Due 2007 from "negative" to "stable"
and has not changed its previous "negative outlook" with respect to the Bonds
Due 2012.


Year 2000

The Year 2000 issue  exists  for  the  Partnership  because many software and
embedded systems use only two digits to identify a year in a date field,  and
were  developed  without considering the impact of the upcoming change in the
century.  Some of these systems  are critical to the Partnership's operations
and business processes and might fail or function incorrectly if not repaired
or replaced with Year 2000 ready products.  "Ready" is defined as the  system
is remediated so that it will perform its essential functions.  "Software" is
defined  as  both  computer  programming  that  has  been  developed  by  the
Partnership  for  its  own  purposes ("in-house software") and that purchased
from  vendors  ("vendor  software").    "Embedded  systems"  refers  to  both
computing hardware  and  other  electronic  monitoring,  communications,  and
control systems that have microprocessors within them.

                                      14
                                    
<PAGE>


The  Partnership's  Year  2000  project  focuses  on  those  systems that are
critical to  its  business.   "Critical"  is  defined  as  those systems, the
failure of which  would  directly  and  adversely  affect  the  Partnership's
ability  to  generate  or  deliver  products and services or otherwise affect
revenues, safety, or reliability for  such  a  period  of  time as to lead to
unrecoverable consequences.  For these critical systems, the Partnership  has
adopted  a  phased  approach to address Year 2000 issues.  The primary phases
include:  (1) a facility-wide  inventory,  in  which  systems critical to the
Partnership's business are identified;  (2)  assessment,  in  which  critical
systems  are  evaluated  as  to their readiness to operate after December 31,
1999; (3) remediation, in which critical systems that are not Year 2000 ready
are made so, either  through  modifications  or  replacement; (4) testing, in
which remediation is validated by checking the ability of the critical system
to operate within the Year 2000  time  frame; and (5) certification, in which
systems are formally acknowledged to be Year 2000 ready, and  acceptable  for
production or operation.

The Partnership's Year 2000 project is proceeding generally on schedule.  For
in-house and vendor  software,  the  Partnership  has completed the inventory
phase and has identified  12  critical  systems.   Additional  software  that
requires Year 2000 remediation may be discovered as the Partnership continues
with the assessment, remediation, and testing phases.  All of the identified,
critical,   in-house  and  vendor  software  are  in  the  process  of  being
remediated, with completion  expected  in  the  first  quarter  of 1999.  The
Partnership expects to finish testing remediated in-house and vendor software
by July 1999 and expects to complete the certification phase by July 1999.

The Partnership is testing remediated software and embedded systems both  for
ability   to   handle  Year  2000  dates,  including  appropriate  leap  year
calculations, and to  assure  that  code  repair  has  not  affected the base
functionality  of  the  code.   Software  and  embedded  systems  are  tested
individually and where necessary will be tested in an integrated manner  with
other  systems,  with  dates and data advanced and aged to simulate Year 2000
operations.  Testing, by its  nature, however, cannot comprehensively address
all future combinations of dates and events.  Some  uncertainty  will  remain
after  testing  as to the ability of code to process future dates, as well as
the ability of remediated systems to work in an integrated fashion with other
systems.

The Partnership  also  depends  upon  external  parties, including customers,
suppliers, business partners, gas and electric system  operators,  government
agencies,  and financial institutions, to reliably deliver their products and
services.  To the  extent  that  any  of  these  parties experience Year 2000
problems in their  systems,  the  demand  for  and  the  reliability  of  the
Partnership's  services  may  be  adversely affected.  The primary phases the
Partnership has undertaken to deal with external parties are:  (1) inventory,
in which critical business relationships are identified; (2) action planning,
in which the Partnership develops a  series  of  actions and a time frame for
monitoring  expected  compliance  status;  (3)  assessment,  in   which   the
likelihood  of  external party Year 2000 readiness is periodically evaluated;
and (4) contingency planning, in which appropriate plans are made to be ready
to deal with the  potential  failure  of  an  external  party to be Year 2000
ready.

The Partnership has completed its inventory  of  external  contacts  and  has
identified  all  of  its  critical  relationships.  The Partnership will soon
complete the action-planning phase  for  each  of these entities.  Additional
critical relationships may be entered into or discovered as  the  Partnership
continues.   Assessment of Year 2000 readiness of these external parties will
continue through 1999.  The Partnership expects to complete contingency plans
for each of these critical business relationships by July 1999.

                                     15
                                    
<PAGE>


The Partnership is developing contingency  plans for its critical software or
embedded systems that may be at risk for Year  2000  repair  or  replacement.
For  example, if the schedule lags and cannot be re-scheduled to meet certain
milestones, then the Partnership expects  to begin an appropriate contingency
planning process.  These contingency plans would be implemented as necessary,
if a remediated system does not become available by the date  it  is  needed.
In addition, as described above, the Partnership plans to develop contingency
plans for the potential failure of critical external parties to fully address
their Year 2000 issues.

The  Partnership  also  recognizes  that,  given  the  complex interaction of
today's computing and communication systems, it cannot be certain that all of
its efforts to have all critical  systems Year 2000 ready will be successful.
Therefore, irrespective of  the  progress  of  the  Year  2000  project,  the
Partnership is preparing contingency plans.  The plans will take into account
the  possibility of multiple system failures, both internal and external, due
to Year 2000 effects.

These  contingency  plans  will  build  on  existing  emergency  and business
restoration plans.   Although  no  definitive  list  of  scenarios  for  this
planning  has  yet been developed, the events that the Partnership considered
for  planning  purposes   includes   increased   frequency  and  duration  of
interruptions  of  the  power,  computing,  financial,   and   communications
infrastructure.   The  Partnership  expects to complete first drafts of these
contingency plans in the first  quarter of 1999.  The Partnership anticipates
testing and revision of these plans throughout 1999.

Due to the speculative  nature  of  contingency  planning,  it  is  uncertain
whether  the  Partnership's  contingency plans to address failure of external
parties or internal systems will be sufficient to reduce the risk of material
impacts on its operations due to Year 2000 problems.

The  Partnership  currently  is  revising  and  refining  its  procedures for
tracking and reporting costs associated with its Year 2000 effort.   For  the
nine months ended September 30, 1998, the Partnership has spent approximately
$45,000 to assess and remediate Year 2000 problems.


                                      16
                                    
<PAGE>

The  Partnership  estimates that its future costs to address Year 2000 issues
will be approximately $395,000.  About  $305,000 of these remaining Year 2000
costs are expected to be capitalized because they relate to the purchase  and
installation   of   new  systems  for  general  business  purposes.   As  the
Partnership continues to assess its  systems and as the remediation, testing,
and certification phases of the compliance effort progresses, estimated costs
may change.  Further, the Partnership expects to incur costs in the year 2000
and beyond to remediate and  replace  less  critical  software  and  embedded
systems.   The  Partnership  does  not  believe  that the incremental cost of
addressing Year 2000 issues will have  a material impact on the its financial
position or results of operation.

The Partnership's  current  schedule  is  subject  to  change,  depending  on
developments  that  may  arise through further assessment of its systems, and
through  the  remediation  and  testing  phases  of  its  compliance  effort.
Further, the current schedule is partially  dependent on the efforts of third
parties, including  vendors,  suppliers,  and  customers.   Delays  by  third
parties may cause the Partnership's schedule to change.  There also are risks
associated  with  loss  of  or  inability  to  locate  critical  personnel to
remediate  and  return  to  service  the  identified  critical  systems.  The
Partnership may fail to locate all systems critical to its business processes
that  require  remediation.   A  combination  of  businesses  and  government
entities may fail to be Year 2000 ready, which  may  lead  to  a  substantial
reduction in a demand for the Partnership's energy services.

Based on the Partnership's current  schedule  for the completion of Year 2000
tasks, the Partnership believes its plan is  adequate  to  secure  Year  2000
readiness  of  its critical systems.  The Partnership expects its remediation
efforts  and  those   of   external   parties   to   be  largely  successful.
Nevertheless, achieving Year 2000 readiness is subject to various  risks  and
uncertainties, many of which are noted above.  The Partnership is not able to
predict  all the factors that could cause actual results to differ materially
from its  current  expectations  as  to  its  Year  2000  readiness.   If the
Partnership, or third parties  with  whom  the  Partnership  has  significant
business  relationships,  fail to achieve Year 2000 readiness with respect to
critical  systems,  there  could  be   a   material  adverse  impact  on  the
Partnership's financial position, results of operations, and cash flows.

                                      17
                                    
<PAGE>



                         PART II.		OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
		 --------------------------------
(A)	Exhibits

	Exhibit No.	Description				                 Page No.
	----------  -----------                              -------
	  
	  27		Financial Data Schedule	
				(For electronic filing purposes only)



(B)	Reports on Form 8-K

On September 16, 1998, the Registrant filed a  current  report  on  Form  8-K
disclosing  the  consummation on August 31, 1998 of the transactions relating
to the amendment and  restatement  of  the  existing power purchase agreement
between  the  Partnership  and  Niagara  Mohawk  pursuant   to   the   Master
Restructuring  Agreement  dated  as of July 9, 1997, as amended among Niagara
Mohawk, the Partnership and certain other independent power producers.

Omitted  from this Part II are items which are not applicable or to which the
answer is negative for the periods covered.

                                     18

<PAGE>
 



                    
                                 SIGNATURES

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



                               	       SELKIRK COGEN PARTNERS, L.P.

Date: November 13, 1998	                 /s/    JMC SELKIRK, INC.
                                        --------------------------
 	                                    		General Partner


Date: November 13, 1998	                 /s/    JOHN R. COOPER
                                        --------------------------
 	                                     Name:  John R. Cooper
                                         Title:	Senior Vice President and
		                                         and Chief Financial Officer

			

						















                                     19

<PAGE>



                    
                                 SIGNATURES

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



                                 	    SELKIRK COGEN FUNDING 
						                   CORPORATION

Date: November 13, 1998	                 /s/    JOHN R. COOPER
                                        --------------------------
 	                                     Name:  John R. Cooper
                                         Title:	Senior Vice President and
		                                         and Chief Financial Officer
			

						




















                                     20