EXHIBIT 10.1
                                                                 ------------














                                     17
<PAGE>


                 THIRD AMENDMENT TO POWER PURCHASE AGREEMENT
                               by and between
                CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                                     and
                        SELKIRK COGEN PARTNERS, L.P.
					   ------------------------------

THIS THIRD AMENDMENT TO POWER PURCHASE AGREEMENT  ("Third  Amendment"),  made
and  entered  into  as  of  the  13th  day of September, 1996, by and between
Selkirk Cogen Partners, L.P.  ("Seller")  and  Consolidated Edison Company of
New York, Inc. ("Buyer"), constitutes an  amendment  to  the  Power  Purchase
Agreement,  dated  April  14,1989,  as  amended  by  Rider  to Power Purchase
Agreement, dated September 8,  1989,  the  First  Amendment to Power Purchase
Agreement, dated September 13,  1991,  and  the  Second  Amendment  to  Power
Purchase  Agreement,  dated  October 22, 1992 (collectively, the "Agreement")
between Buyer and Seller, and  as  further  amended by Buyer and Seller.  All
terms not defined herein shall have the meaning set forth in the Agreement.

WHEREAS, Buyer and Seller have previously entered into the Agreement for  the
purchase  by Buyer of up to 265 megawatts of capacity and associated electric
energy to be produced  by  Seller's  cogeneration  plant in Selkirk, New York
(the "Plant"); and

WHEREAS, the Plant has the capability under certain operating  conditions  to
produce capacity and associated electric energy that exceeds the capacity and
energy committed to Buyer; and

WHEREAS,  Seller  wishes to sell such excess capacity and/or electric energy;
and

WHEREAS, Buyer  and  Seller  have  previously  agreed  to  further  amend the
Agreement, upon Seller's request, to allow the Seller to  sell  capacity  and
energy  of the Plant in excess of the maximum 265 megawatts DMNC committed to
Buyer to any other person, subject to  the right of first refusal in favor of
Buyer; and

WHEREAS, Seller has requested Buyer to amend  the  Agreement,  as  previously
agreed to.

                                     18

<PAGE>

NOW THEREFORE, in consideration of the premises and covenants hereinafter set
forth,  Buyer  and  Seller agree as follows:
 
I.	Article 3(a) is amended by deleting  the text thereof in its entirety and
substituting therefore the following:


"a)	During the term of the Agreement, subject to Buyer's  scheduling  of  the
Plant  for dispatch as provided for in Article 7, Seller shall have delivered
to the Intervening Party (as  defined  below)  for delivery and sale to Buyer
and Buyer shall accept and purchase from Seller, subject  to  the  terms  and
conditions of this Agreement, all electricity produced by the Plant, less (i)
transmission  losses, if any, (ii) electricity used to operate the Plant, and
(iii) electricity delivered to  the  purchaser  of thermal energy produced by
the Plant, (iv) the reduction of the plant's electric capacity, if any,  from
Seller's  sale  of thermal energy to the purchaser of thermal energy produced
by the Plant, and (v) electricity sold to other third parties pursuant to the
provisions of Article 3(a) ; provided,  however, that Seller is not obligated
to deliver and Buyer is not obligated to purchase electric energy produced by
the   Plant   that   is   greater   than   the   DMNC,   expressed    on    a
megawatt-hours-per-hour  basis,  or 265 MWH/hr, whic hever is less.  Not less
than ninety (90) days prior to the commencement of each summer period (June 1
to September 15), Seller shall provide Buyer with written notice (the "Annual
Notice") of (i)  the  maximum  amount  of  electric  capacity  to  be sold to
Seller's thermal customer for the immediately following summer period (June 1
to September 15), and (ii) the maximum hourly steam sendout to  the  Seller's
thermal  customer  for  the immediately following summer period (the "Maximum
Steam Sendout")  and  the  corresponding  reduction  in  the Plant's electric
capacity due to  such  Maximum  Steam  Sendout  (the  "Capacity  Reduction").
Seller's  actual  steam  sendout to Seller's thermal customer during a summer
period shall not exceed the Maximum  Steam  Sendout in effect for such summer
period.  Following receipt of an Annual Notice, no change in  the  amount  of
electricity  committed  hereunder  for the applicable year shall be permitted
without the written consent of Buyer and Seller."

Seller may sell to third  parties  (i)  Plant capacity that becomes available
above the temperature adjusted equivalent of the 265 megawatts DMNC used  for
the  purpose  of payments to be made by Buyer to Seller as defined in Article
I.B.1 of Appendix C  of  this  Agreement  ("Surplus  Capacity"), and (ii) any
electric  energy  associated  with  Surplus  Capacity   ("Surplus   Energy");
provided,  however,  that  Seller  first  offers such Surplus Capacity and/or
Surplus Energy to Buyer at a price  that Seller certifies to Buyer is no less
favorable then that which it will offer to third parties.  Exhibit  H  hereto
sets  forth  the  notice  periods  which  Seller must provide to Buyer before
Seller may sell Surplus  Capacity  and/or  Surplus  Energy  to a third party.
Failure of Buyer to accept the offer at the stated price  within  the  period
allowed  in  accordance  with  Appendix  H shall be equivalent to the Buyer's
refusal of the offer.

                                     19

<PAGE>

If  the  Seller enters into arrangements to sell to one or more third parties
Surplus Energy, Buyer  shall  first  receive  the  full amount of electricity
scheduled for delivery by the Buyer, to the extent that the Plant is  capable
of  producing  Buyer's  scheduled  amount,  and  the third parties shall then
receive Surplus  Energy  to  the  extent  it  is  available  above the amount
scheduled for delivery by the Buyer.  If, subject to the provisions set forth
above, Seller enters into an agreement with Buyer and/or one  or  more  third
parties  to sell all or any portion of Surplus Capacity on a firm basis, then
Buyer shall  receive  under  this  Agreement  a  proportionate  share  of the
electric energy produced by the Plant based on the ratio of the  capacity  of
the Plant paid for by the Buyer under this Agreement to the total capacity of
the  Plant  contracted  for  sale to the Buyer and third parties.  At no time
shall the sum of the Plant's  capacity committed to Buyer hereunder plus firm
capacity  sold  under  Surplus  Capacity  transactions  exceed  the   Plant's
temperature adjusted DMNC."

II.   The  Agreement  is amended by adding hereto Appendix H attached to this
Third Amendment.

III.  All other terms and  conditions  of the Agreement not expressly amended
herein shall remain in full force and effect.

IN WITNESS WHEREOF, the parties  have  caused  this  Third  Amendment  to  be
executed in one or more counterparts by their proper officers duly authorized
as of the date written above.

									SELKIRK COGEN PARTNER, L.P.
	
										Name:	/s/ George J. Grunbeck
	      									    _______________________


   									   Title:   Vice President
		  									    -----------------------

									CONSOLIDATED EDISON COMPANY

   										Name:	/s/ James F. Reilly
	                    						-----------------------
		
	    								Title: Manager, NUG Contracts
		 									   ------------------------


                                     20

<PAGE>


                                 APPENDIX H

The  following  sets forth the minimum notice period to be given by Seller to
Buyer and the  deadline  for  response  by  Buyer  to  Seller prior to Seller
entering into an agreement for the sale of Surplus  Capacity  and/or  Surplus
Energy to third parties.

----------------------------------------------------------------------------
Duration of Sale			MINIMUM NOTICE 			Deadline for Response
---------------             --------------          ---------------------
							   to Buyer 			      by Buyer
							   -------					  --------
----------------------------------------------------------------------------
Up to 1 day               10 a.m. on the Business	 Noon on the Business
                               Day prior to 			Day prior to the
                           commencement of sale		 commencement of sale
----------------------------------------------------------------------------
More than 1 day,		  10 a.m. on the Business    Noon on the Business
                               Day prior to 		    Day prior to the 
  up to 3 days              commencement of sale     commencement of sale
----------------------------------------------------------------------------
More than 3 days,		   10 a.m. on the second    10 a.m. on the Business
                           Business Day prior to 	   Day prior to the 
 up to 2 weeks             commencement of sale      commencement of sale
----------------------------------------------------------------------------
More than 2 weeks,		   10 a.m. on the fifth       10 a.m. on the second
                           Business Day prior to 	  Business Day prior to
 up to 1 month             commencement of sale     the commencement of sale
----------------------------------------------------------------------------
More than 1 month		   10 a.m. on the tenth       10 a.m. on the fifth
                           Business Day prior to 	  Business Day prior to
                           commencement of sale     the commencement of sale
----------------------------------------------------------------------------


                                     21