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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, 1997
                                   
                       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) 227-8080
            (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 
												   ---	 ---
	
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             This document consists of 16 pages of which this page is page 1.

<PAGE>		 




                              TABLE OF CONTENTS



						                												                               ----
                       PART I.  FINANCIAL INFORMATION


Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Balance Sheets as of September 30, 1997 
		and December 31, 1996..........................................	   3

		Condensed Consolidated Statements of Operations for the three 
		and nine months ended September 30, 1997 and September 30, 1996.   4

		Condensed Consolidated Statements of Cash Flows for the three 
		and nine months ended September 30, 1997 and September 30, 1996.   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...........................................   7


		Liquidity and Capital Resources.................................   9


                         PART II.  OTHER INFORMATION


Item 6.		Exhibits and Reports on Form 8-K...........................   14

SIGNATURES.............................................................	  15







                                      2

<PAGE>








                        
<TABLE>
                        SELKIRK COGEN PARTNERS, L.P.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)
              
<CAPTION>							
											    (unaudited)
                       				     		September 30,   December 31, 
						                            1997		    1996
						                        -------------	------------
<S>												      <C>	       	<C>
ASSETS		
------										
Current assets:									
  Cash............................................ $   2,474     $    2,591 
  Restricted funds................................    19,433          6,284
  Accounts receivable.............................    15,794         19,899 
  Due from affiliates.............................        14             40 
  Fuel inventory and supplies.....................     4,798          4,401
  Other current assets............................       534	        449
  				                   				   ---------	   ---------
    	Total current assets......................    43,047         33,664 
										
  Plant and equipment, net........................   324,709        334,229 
  Long-term restricted funds......................    21,368         20,446 
  Deferred financing charges, net.................    12,237         13,115 
                                     			   ---------	   ---------

				Total Assets		              $  401,361     $  401,454
   			                                       ---------	   ---------
   			                                       ---------	   ---------
LIABILITIES AND PARTNERS' CAPITAL									
---------------------------------										
Current liabilities:									
  Accounts payable................................ $     731 	  $     588 
  Accrued bond interest payable...................     9,006 	        385 
  Accrued expenses................................    12,118         16,239 
  Due to affiliates...............................     1,192  	        937 
  Advances from customer..........................      --- 	         17
  Current portion of long-term bonds..............     2,987 	      2,167 
	  					                           ---------	  ----------
	    Total current liabilities.................    26,034         20,333 
										
  Other long-term liabilities.....................    13,887         10,678 
  Long-term bonds, less current portion...........   387,372        389,253 
										
  General partners' capital.......................      (248)          (173)
  Limited partners' capital.......................   (25,684)       (18,637) 
	   											    ---------       --------
	    Total partners' capital...................   (25,932)       (18,810) 
											        ---------	    --------

				Total Liabilities and
					 Partners' Capital            $  401,361     $  401,454 
												    --------- 	   ---------
												    ---------	   ---------
<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,
                 		        1997         1996		  1997       1996
               	              ---------   ---------	   ---------   ---------
<S>                              <C>        <C>          <C>          <C>
Operating revenues:								   

 Electric and steam.........  $  38,238   $  36,128    $ 116,292   $ 109,837   
 Gas resale.................      4,148       5,011		  10,869      19,816
						      ---------   ---------	   ---------   ---------
    Total operating 
      revenues..............	 42,386      41,139 	 127,161	 129,653
Cost of revenue.............     29,503      29,570		  89,918	  89,236
							  ---------   ---------	   ---------   ---------
Gross Profit................     12,883      11,569 	  37,243	  40,417
						 	 	   			
Other operating expenses:										
 Administrative services -
   affiliates...............	    874         656        2,212       1,836 	
 Other general and 
   administrative expenses..	    550 		694        1,770       2,520 	
 Amortization of deferred
   financing charges........	    292         293 		 878         880 	
							  ---------   ---------	   ---------   ---------
	Total other operating
	  expenses..............      1,716       1,643 	   4,860	   5,236
							  ---------   ---------	   ---------   ---------
				 
Operating income............     11,167       9,926 	  32,383      35,181
											
Net interest expense........      8,199       8,210       24,585      24,699 	 
							  ---------   ---------	   ---------   ---------
Net income..................  $   2,968   $   1,716	   $   7,798   $  10,482
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------


Allocated to:
  General partners..........  $      29	  $      17    $      78   $     105 
  Limited partners..........	  2,939 	  1,699 	   7,720	  10,377
                              ---------   ---------	   ---------   ---------                  
	Total...................  $   2,968   $   1,716    $   7,798   $  10,482	
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------  			    					 						                                     	
<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,
                 		        1997        1996	     1997       1996
                 		      ----------  ---------     ---------  ---------
<S>                            <C>           <C>          <C>	     <C>
										                                    		 
Net cash provided by  
 operating activities.......   $ 15,915   $  16,506	   $  29,936   $ 35,058
												
Cash flows provided by 
 (used in) investing 
  activities:											
   Plant and equipment 
    additions...............        (18)        (99)          16       (602)
   Restricted funds.........    (14,479)    (16,218)     (14,071)   (11,555)     
    						   ---------  ----------   ----------   --------
  			                                    	   
	Net cash used in
	  investing activities..    (14,497)    (16,317)	 (14,055)   (12,157)
												
Cash flows provided by 
 (used in) financing 
  activities:											
   Cash distributions.......      ---         ---        (14,920)	(23,607)
   Payments of principal on
    long-term debt..........      ---		  ---	      (1,061)	   (284)
   Advances from a 
    customer................      ---         ---            (17)	   (136)
                               ---------   ---------    ---------  ---------
    Net cash used in 
       financing activities..     ---		   ---	     (15,998)   (24,027)
												
Net increase (decrease)
 in cash....................      1,418         189         (117)    (1,126)
Cash at beginning 
 of period..................      1,056 	  1,357		   2,591      2,672
							  ----------  ----------   ----------  ---------
Cash at end of period.......  $   2,474   $   1,546    $   2,474   $  1,546
                              ----------  ----------   ----------  ---------
          					  ----------  ----------   ----------  ---------
   
Supplemental disclosures of 
 cash flow information:										

  Cash paid for interest....  $   ---    $    ---      $  17,320  $  17,620   				
  		                       ---------   ---------   ---------  ---------                                 
							   ---------   ---------   ---------  --------- 

<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.

These  condensed  consolidated  financial   statements   should  be  read  in
conjunction with the audited consolidated financial  statements  included  in
the Partnership's December 31, 1996 Annual Report on Form 10-K.


Note 2. Contingency

In   connection  with  transactions  in  1994  involving  the  investment  by
affiliates of Cogen Technology, Inc.  in  the Partnership and the purchase of
J. Makowski Company, Inc. by Beale Generating Company, the Partnership  filed
New  York  State real estate transfer and gains tax returns with New York tax
authorities.  The New York tax  authorities have raised certain questions and
issues about such tax returns.

Although the New York tax authorities have assessed no additional tax against
the Partnership or any other transferor at this time, the issue currently  is
under consideration and it is possible that the New York tax authorities will
assert  that  additional tax is owed by the Partnership or one or more of the
other transferors in  connection  with  these  transactions.  The Partnership
presently cannot predict the likelihood  of  the  New  York  tax  authorities
making  such  an  assertion  or,  if  made,  the  amount of tax that might be
asserted.


                                      
                                      6
<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, 1997 Compared to the Three and Nine
Months Ended September 30, 1996

Net income for the quarter ended September 30, 1997  was  approximately  $3.0
million as compared to $1.7 million for the corresponding period in the prior
year.   Net  income  for  the  nine  months  ended  September  30,  1997  was
approximately $7.8 million as compared to $10.5 million for the corresponding
period  in  the prior year.  The increase in net income for the quarter ended
September 30, 1997 is primarily  due  to  a $2.3 million increase in electric
revenues offset by a $0.9 million  decrease  in  gas  resale  revenues.   The
decrease  in  net  income  for  the  nine  months ended September 30, 1997 is
primarily due to a $8.9 million  decrease  in gas resale revenues offset by a
$8.1 million increase in electric revenues.

Total revenues for the quarter and nine months ended September 30, 1997  were
approximately  $42.4  million and $127.2 million as compared to $41.1 million
and $129.7 million for the corresponding periods in the prior year.

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

								 For the Three Months Ended
                     September 30, 1997              September 30, 1996 
			  ------------------------------- -------------------------------
	          Dollars kWh's Capacity Dispatch Dollars kWh's Capacity Dispatch
			  ------- ----- -------- -------- ------- ----- -------- --------
Niagara Mohawk   7.4   70.9   40.19%   44.93%     6.9  59.4   33.68%   47.83%
Con Edison      30.8  495.9   79.87%   89.06%    29.0 416.6   71.16%   88.63%


                                 For the Nine Months Ended
                     September 30, 1997             September 30, 1996	
			  ------------------------------- -------------------------------
	          Dollars kWh's Capacity Dispatch Dollars kWh's Capacity Dispatch
			  ------- ------ ------- -------- ------- ----- -------- --------
Niagara Mohawk  23.6   259.4  49.02%   54.21%   20.8   180.0   34.26%  44.74%
Con Edison      92.5 1,400.6  79.01%   89.81%   87.1 1,216.0   69.78%  88.79%



Revenues from Niagara Mohawk  Power  Corporation ("Niagara Mohawk") increased
approximately $0.5 million and $2.8 million for the quarter and  nine  months
ended  September  30,  1997  as  compared to the corresponding periods in the
prior year.  For the  nine  months  ended  September 30, 1997, Niagara Mohawk
dispatched the Unit on-line for the months of January, February, March, June,
July and August at full contract rates except for the month of March.

                                      7

<PAGE>

Energy  delivered in March was sold under special dispatch arrangements which
called for the pricing of  the  delivered  energy at variable rates less than
full contract rates.  For the nine months ended September 30,  1996,  Niagara
Mohawk  dispatched  the  Unit  on-line  for  the months of January, February,
April, May, June, July,  August  and  September  at full contract rates.  The
increase in revenues from Niagara Mohawk for  the  quarter  and  nine  months
ended September 30, 1997 was primarily due to an increase in delivered energy
as  evidenced  by  increases  of 6.5% and 14.8% in the corresponding capacity
factors.  Revenue from  energy  delivered  pursuant  to  the special dispatch
arrangement with Niagara Mohawk for the nine months ended September 30,  1997
was  approximately  $1.2  million  as  compared  to  $29.3  thousand  for the
corresponding period in the prior year.

Revenues from Consolidated Edison  Company  of  New York, Inc. ("Con Edison")
for  the  quarter  and  nine  months  ended  September  30,  1997   increased
approximately  $1.8 million and $5.4 million as compared to the corresponding
periods in the prior year.  The increase  in revenues from Con Edison for the
quarter and nine months ended September 30, 1997  was  primarily  due  to  an
increase  in  delivered  energy as evidenced by increases of 8.7% and 9.2% in
the corresponding capacity factors and higher contract energy rates resulting
from higher index fuel prices.

Pursuant  to  the  Steam  Sales  Agreement  General  Electric  may  implement
productivity or energy efficiency projects in  its  manufacturing  processes,
including  projects  involving  the  production  of  steam within the General
Electric plant  commencing  in  1996.   General  Electric  has implemented an
energy efficiency project in 1997 that will  reduce  the  quantity  of  steam
required by the General Electric plant.  Under the energy efficiency project,
General  Electric  anticipates  managing  its  annual average steam demand at
160,000lbs/hr.  Steam revenues for the  nine  months ended September 30, 1997
and September 30, 1996 were reduced by an annual true-up of $0.9 million  and
$0.2  million,  respectively,  so  that  General  Electric would be charged a
nominal amount  which  is  the  annual  equivalent  of  160,000lbs/hr.  Steam
revenues for the quarter and  nine  months  ended  September  30,  1997  were
approximately $0 and $172.5 thousand on 287.323 million and 1,116.003 million
pounds  of  steam  delivered as compared to approximately $200.2 thousand and
$1.9 million  on  357.164  million  and  1,378.420  million  pounds  of steam
delivered for the corresponding periods in the prior year.  The  decrease  in
steam  revenues  during  the quarter and nine months ended September 30, 1997
was due to lower steam demand and a reduction in fuel prices.

Gas   resale   revenues   for  the  quarter  ended  September  30,  1997  was
approximately $4.1 million on  sales  of  1.5  million MMBtu's as compared to
$5.0 million on sales of 2.2 million MMBtu's for the corresponding period  in
the  prior year.  Gas resale revenues for the nine months ended September 30,
1997 were approximately $10.9 million  on  4.3 million MMBtu's as compared to
approximately  $19.8  million  on  sales  of  6.4  million  MMBtu's  for  the
corresponding period in the prior year. 

                                      8

<PAGE>

The $0.9 million and $8.9 million  decrease in gas resale revenues during the
quarter and nine months ended September 30, 1997 was primarily due to  higher
dispatch  of  Units  1  or  2, which resulted in lower volumes of natural gas
becoming available for resale.   Natural  gas  resale  prices were also lower
during the nine months ended  September  30,  1997,  the  decrease  generally
resulted  from more moderate temperatures in the Northeast region as compared
to the colder  than  normal  temperatures,  which  caused  an increase in the
demand for natural gas a nd resulted in lower than normal gas storage  levels
during  the  corresponding  period in the prior year.  The Partnership enters
into gas resales during periods when Units  1 and 2 are not operating at full
capacity.

Cost of revenues for the quarter and nine months  ended  September  30,  1997
were  approximately  $29.5  million  and  $89.9  million  on purchases of 7.1
million MMBtu's and 21.1 million  MMBtu's  as compared to approximately $29.6
million and $89.2 million on  purchases  of  7.1  million  MMBtu's  and  21.3
million MMBtu's for the corresponding periods in the prior year.  The cost of
revenues  and  MMBtu's  purchases  for  the  quarter  and  nine  months ended
September 30, 1997 are comparable  to  the corresponding periods in the prior
year.

Total other  operating  expenses  for  the  quarter  and  nine  months  ended
September  30,  1997  were  approximately  $1.7  million  and $4.9 million as
compared to approximately $1.6 million and $5.2 million for the corresponding
periods in the prior year.  The  decrease in other operating expenses for the
nine months ended September 30, 1997 is primarily due to a decrease in  other
general  and  administrative expenses offset by an increase in administrative
services - affiliates.

Net interest expense for the quarter and nine months ended September 30, 1997
of approximately  $8.2  million  and  $24.6  million  are  comparable  to the
corresponding periods in the prior year.


Liquidity and Capital Resources

Net cash flows provided by operating activities decreased from  approximately
$16.5  million  and  $35.1  million  for  the  quarter  and nine months ended
September 30, 1996 to approximately  $15.9  million and $29.9 million for the
quarter and nine months ended September 30, 1997.  The decrease in  net  cash
flows provided by operating activities during the quarter ended September 30,
1997  is due to normally recurring cash receipts and disbursements within the
Partnership's operating asset and  liability  accounts offset by the increase
in net income.   The  decrease  in  net  cash  flows  provided  by  operating
activities  during  the  nine  months  ended September 30, 1997 is due to the
decrease in net income and normally recurring cash receipts and disbursements
within the Partnership's operating asset and liability accounts.

                                      9

<PAGE>

Net cash flows used in investing  activities  for the quarter and nine months
ended September 30, 1997 were approximately $14.5 million and  $14.1  million
as  compared  to  approximately  $16.3  million  and  $12.2  million  for the
corresponding periods in the prior  year.   Net  cash flows used in investing
activities represent monies deposited into or withdrawn  from  funds  created
pursuant   to   the  Partnership's  Depositary  and  Disbursement  Agreement,
administered by Bankers  Trust  Company,  as  depositary agent (the "Funds").
Monies deposited into the Funds for the nine months ended September 30,  1997
and  1996  primarily  represent  monies  set aside for interest and principal
payments to Bondholders scheduled for  December 26 and Partner distributions.
Monies withdrawn from the Funds for the nine months ended September 30,  1997
and  1996  represent  the  payment of interest and principal on the Bonds and
distributions to Partners.

There were no financing  activities  during  the quarters ended September 30,
1997 and September 30, 1996.  Net cash flows  used  in  financing  activities
decreased  from  approximately  $24.0  million  for  the  nine  months  ended
September  30,  1996 to approximately $16.0 million for the nine months ended
September 30,  1997.   The  decrease  in  net  cash  flows  used in financing
activities for the nine months ended September 30, 1997 is primarily due to a
decrease in distributions to Partners.

Con Edison by a letter dated September  19, 1994 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.  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 has 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  take  delivery  of  any  excess  natural  gas.  The
Partnership vigorously disputes  the  position  adopted  by Con Edison, based
notably on the absence of any contractual provision according Con Edison  the
claimed rights but also on the fact that the Partnership has assumed the risk
under  the  Con Edison Power Purchase Agreement that the fuel charges payable
by Con Edison are insufficient  to  cover  the costs actually incurred by the
Partnership.  By a letter dated  May  23,  1995,  Con  Edison  indicated  its
intention  to pursue the claim asserted in the September 19, 1994 letter.  In
the May 23, 1995 letter, Con Edison  reserved  the right to claim 100% of the
margins derived from the sales of Unit 2's firm natural gas supply  not  used
in  operating Unit 2 (non-plant gas sales) and requested that the Partnership
reduce the monthly amount invoiced to Con Edison by 50% of a calculated value
of the non-plant  gas  sales.   The  Partnership  strenuously objected to Con
Edison's contentions and, at  a  meeting  between  the  Partnership  and  Con
Edison,  Con  Edison agreed to continue not to deduct any amount attributable
to non-plant gas sales from payments made upon monthly invoices but stated it
would do so under protest,  pending  further discussions between the parties.
Since the commencement of commercial operations of Unit  2,  the  Partnership
made  and continues to make, from time to time, excess gas lay-off sales from
Unit 2's gas supply.  The Partnership  does  not intend to adjust the monthly
inv oices issued to Con Edison and continues to assert that Con Edison is not
entitled to any revenues or margins derived from non-plant gas sales.  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.

                                     10

<PAGE>

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 October 6, 1995, Niagara Mohawk filed its "PowerChoice" proposal with  the
New  York  State  Public  Service Commission ("NYPSC").  On October 12, 1995,
Niagara Mohawk filed a Report  on  Form  8-K with the Securities and Exchange
Commission  (the  "Commission")  explaining  the  PowerChoice  proposal  (the
"PowerChoice Statement").   In  the  PowerChoice  Statement,  Niagara  Mohawk
describes  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").   On  July  10, 1997, Niagara Mohawk
filed a Report on Form 8-K with the Commission stating  that  Niagara  Mohawk
had  entered  into a Master Restructuring Agreement ("MRA") pursuant to which
it and the twenty-nine independent power  producers which have signed the MRA
propose to terminate,  restate  or  amend  their  respective  power  purchase
agreements and on October 17, 1997, Niagara Mohawk filed a Report on Form 8-K
with the Commission stating that on October 11, 1997 Niagara Mohawk filed its
Power  Choice  settlement  with the NYPSC which incorporates the terms of the
MRA.  The  consideration  for  the  independent  power  purchasers' agreement
varies by party, and may consist of cash, short term notes, shares of Niagara
Mohawk's Common Stock or certain swap contracts.  Among the  contracts  which
is  proposed  to be amended and restated is the Niagara Mohawk Power Purchase
Agreement for the electric output of Unit 1.  Pursuant to the MRA and subject
to negotiation as described  below,  the  parties  propose to restructure the
Niagara  Mohawk  Power  Purchase  Agreement  to  provide  for  the  sale   of
electricity  by  the  Partnership  pursuant  to  a pre-determined schedule of
output at one or more pricing arrangements for  up to 12 years in lieu of the
delivery and price provisions of the Niagara Mohawk Power Purchase  Agreement
as currently in effect.

                                     11

<PAGE>

The  details  of  the  price  arrangements as well as other possible contract
modifications continue  to  be  the  subject  of  extensive  negotiations and
implementation of the MRA is subject to a number of  significant  conditions,
including  without  limitation Niagara Mohawk and the Partnership negotiating
the amended and restated Unit 1  Power Purchase Agreement, the receipt of all
regulatory approvals, the receipt of all consents by third parties  necessary
for  the  transaction  contemplated  by the MRA (including satisfying certain
standards under the Partnership's Trust  Indenture relating to the absence of
material adverse changes and  the  maintenance  of  required  projected  debt
service  coverage ratios or receiving any required approval of bondholders or
other  creditors),  the   Partnership's   entering   into   new  third  party
arrangements which will enable the Partnership to restructure its project  on
a  reasonably  satisfactory economic basis, and the receipt by Niagara Mohawk
and the Partnership of all necessary  approvals from the ir respective boards
of directors, shareholders and  partners.   Should  Niagara  Mohawk  and  the
Partnership  satisfy  all  of the conditions to effectuating the transactions
contemplated by the MRA with  respect  to the Partnership, Niagara Mohawk may
nevertheless terminate the MRA if Niagara Mohawk determines that, as a result
of the failure to satisfy the conditions of  the  MRA  by  other  independent
power  producers,  the  benefits anticipated to be received by Niagara Mohawk
pursuant to the MRA have been materially and adversely affected.

The Partnership, as a party to  the  MRA,  is committed to negotiate to reach
agreement on an amended and restated power purchase agreement;  however,  the
Partnership  expresses  no opinion with respect to the likelihood that all of
the conditions to  implementation  of  the  MRA  will  be  met.  Further, the
Partnership expresses no opinion with respect to  the  viability  of  Niagara
Mohawk's  proposed  alternatives  should the implementation of the MRA not be
completed,  such  as  Niagara  Mohawk's   proposal  in  the  context  of  the
PowerChoice Statement  to  take  possession  of  independent  power  projects
through  the  power of eminent domain and to thereafter sell such projects or
Niagara Mohawk's position that it has  not ruled out the ultimate possibility
of a filing for restructuring under Chapter 11 of the U.S. Bankruptcy Code as
set forth in the PowerChoice Statement.   Nevertheless,  in  the  absence  of
agreement   on  a  definitive  restructured  power  purchase  agreement,  the
Partnership continues to  believe  that  the  Niagara  Mohawk Power Purc hase
Agreement is a  valid  and  binding  contract  with  Niagara  Mohawk.   Until
negotiations  on  the  restructured power purchase agreement advance further,
the Partnership will  not  be  able  to  determine  what  effect, if any, the
restructured power purchase agreement or the PowerChoice proposal  will  have
on  the  Partnership,  its  business or net operating revenues.  For the nine
months ended September 30, 1997,  electric  sales to Niagara Mohawk accounted
for approximately 18.6% of total project revenues.

Previously in connection with Niagara Mohawk's March 10, 1997 announcement of
the agreement in principle, Standard & Poor's  placed  the  Bonds  on  credit
watch  "with  negative  implications,"  based  in part on its analysis of the
current reports on Form 8-K  filed  in  March  1997 by Niagara Mohawk and the
Partnership, respectively, and its belief  that  the  restructuring  has  the
potential  to  erode  cash  flow  coverage  derived  from long-term contracts
supporting the Bonds.   To  date  Standard  &  Poor's  has  not changed their
outlook on the Bonds.  Additionally, as of the date of this  report,  Moody's
Investors  Service  has  not  changed  its  rating  or its previous "negative
outlook" on the Bonds as a result of the developments.

                                     12

<PAGE>

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, 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.


                                     13

<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 July 18, 1997, the  Registrant  filed  a report on Form 8-K disclosing
the Master Restructuring Agreement entered into between Niagara Mohawk and 16
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.

                                     14

<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, 1997	                 /s/    JMC SELKIRK, INC.
                                        --------------------------
 	                                    		General Partner


Date: November 13, 1997	                 /s/    JOHN R. COOPER
                                        --------------------------
 	                                     Name:  John R. Cooper
                                         Title:	Senior Vice President and
		                                         and Chief Financial Officer

			

						















                                     15

<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, 1997	                 /s/    JOHN R. COOPER
                                        --------------------------
 	                                     Name:  John R. Cooper
                                         Title:	Senior Vice President and
		                                         and Chief Financial Officer
			

						




















                                     16