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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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, 1999

                         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 (b)OR 12 (g) OF THE ACT:
                                      None


     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  12,  1999,  there were 10 shares of common stock of Selkirk
Cogen Funding Corporation, $1 par value outstanding.


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<PAGE>


                                TABLE OF CONTENTS




                                                                      Page

                          PART I. FINANCIAL INFORMATION


Item 1.   Financial Statements (unaudited)

          Condensed Consolidated Balance Sheets as of
          September 30, 1999 and December 31, 1998................      3

          Condensed Consolidated Statements of Operations
          for the three and  nine months ended September 30,
          1999 and 1998...........................................      4

          Condensed Consolidated Statements of Cash Flows
          for the three and  nine months ended September 30,
          1999 and 1998...........................................      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.........................     10

Item 3.   Quantitative and Qualitative Disclosures About
          Market Risk ............................................     14


                   PART II. OTHER INFORMATION

Item 5.   Other Items.............................................     15

Item 6.   Exhibits and Reports on Form 8-K........................     15

SIGNATURES........................................................     16



                                       2

<PAGE>



                                           SELKIRK COGEN PARTNERS, L.P.
                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                                  (in thousands)

<TABLE>
<CAPTION>


                                                                     (unaudited)
                                                                    September 30,   December 31,
                                                                         1999           1998
                                                                    -------------   ------------
<S>                                                                 <C>            C>

ASSETS

Current assets:
    Cash and cash equivalents...................................    $    1,169     $    1,839
    Current portion of restricted funds.........................        24,519          4,185
    Accounts receivable.........................................        15,118         14,281
    Due from affiliates.........................................           417            743
    Fuel inventory and supplies.................................         5,284          5,033
    Other current assets........................................           466            333
                                                                    ----------     ----------
          Total current assets..................................        46,973         26,414

Plant and equipment, net........................................       299,965        308,999
Restricted funds, less current portion..........................        29,667         28,188
Deferred financing charges, net.................................         9,917         10,782
                                                                    ----------     ----------
              Total Assets                                          $  386,522     $  374,383
                                                                    ----------     ----------
                                                                    ----------     ----------

LIABILITIES AND PARTNERS' CAPITAL

Current liabilities:
    Accounts payable............................................    $      239     $      617
    Accrued bond interest payable...............................         8,867            379
    Accrued expenses............................................        11,897         12,235
    Due to affiliates...........................................           358            639
    Current portion of long-term bonds..........................         5,820          4,822
                                                                    ----------     ----------
          Total current liabilities.............................        27,181         18,692

Deferred revenues...............................................         6,046          6,565
Other long-term liabilities.....................................        17,910         14,803
Long-term bonds, less current portion...........................       378,112        381,133

General partners' capital.......................................          (416)          (457)
Limited partners' capital.......................................       (42,311)       (46,353)
                                                                     ----------     ----------
          Total partners' capital...............................       (42,727)       (46,810)
                                                                     ----------     ----------

              Total Liabilities and Partners' Capital               $  386,522     $  374,383
                                                                     ----------     ----------
                                                                     ----------     ----------
</TABLE>

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

                                       3

<PAGE>


<TABLE>
<CAPTION>

                                                                    SELKIRK COGEN PARTNERS, L.P.
                                                           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                           (in thousands)
                                                                             (unaudited)


                                                                 For the Three Months Ended         For the Nine Months Ended
                                                             ------------------------------      -------------------------------
<S>                                                         <C>              <C>                 <C>              <C>

                                                             September 30,   September 30,       September 30,     September 30,
                                                                 1999             1998                 1999             1998
                                                             -------------   -------------       -------------     -------------
     Operating revenues:
      Electric and steam.................................    $   45,564         $  43,251          $  124,484       $    120,599
      Gas resale.........................................           939               170               5,306              5,348
                                                             ------------    -------------       -------------     -------------
            Total operating revenues.....................        46,503            43,421             129,790            125,947

     Cost of revenue.....................................        29,299            27,435              84,186             84,313
                                                             ------------    -------------       -------------     -------------
     Gross profit........................................        17,204            15,986              45,604             41,634

     Other operating expenses:
      Administrative services - affiliates...............           563                17               1,321              1,338
      Other general and administrative expenses..........           323               250               1,205              1,346
      Amortization of deferred financing charges.........           287               290                 865                873
                                                             ------------    -------------       -------------     -------------
            Total other operating expenses...............         1,173               557               3,391              3,557
                                                             ------------    -------------       -------------     -------------

     Operating income....................................        16,031            15,429              42,213             38,077

     Interest (income) expense:
      Interest income....................................          (549)             (565)             (1,629)            (1,639)
      Interest expense...................................         8,492             8,564              25,555             25,772
                                                             ------------    -------------       -------------     -------------
            Net interest expense                                  7,943             7,999              23,926             24,133
                                                             ------------    -------------       -------------     -------------
     Net Income..........................................     $   8,088         $   7,430          $   18,287       $     13,944
                                                             ------------    -------------       -------------     -------------
                                                             ------------    -------------       -------------     -------------
     Allocated to:
      General partners...................................     $      81         $      75          $      183       $        140
      Limited partners...................................         8,007             7,355              18,104             13,804
                                                             ------------    -------------       -------------     -------------
            Total........................................     $   8,088         $   7,430          $   18,287       $     13,944
                                                             ------------    -------------       -------------     -------------
                                                             ------------    -------------       -------------     -------------



</TABLE>

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

                                       4

<PAGE>
<TABLE>
<CAPTION>


                                                        SELKIRK COGEN PARTNERS, L.P.
                                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                               (in thousands)
                                                                 (unaudited)

                                                                   For the Three Months Ended          For the Nine Months Ended
                                                                -------------------------------     -------------------------------
                                                                September 30,     September 30,     September 30,     September 30,
                                                                     1999              1998              1999              1998
                                                                -------------     -------------     -------------     -------------
<S>                                                             <C>                   <C>           <C>               <C>

    Net cash provided by operating activities....................  $ 20,387           $  27,074     $   35,777        $   39,120

    Cash flows provided by (used in) investing activities:
        Plant and equipment additions............................      ---                ---             (310)              (14)
                                                                   --------           ---------      ----------        -----------

           Net cash used in investing activities.................      ---                ---             (310)              (14)

    Cash flows provided by (used in) financing activities:

        Cash distributions.......................................      (970)            (5,665)        (14,204)            (8,992)
        Payments of principal on long-term debt..................       ---                ---          (2,023)            (1,881)
        Restricted funds.........................................   (19,910)           (21,851)        (19,910)           (28,646)
                                                                    --------           ---------      ----------       -----------
             Net cash used in financing activities...............   (20,880)           (27,516)        (36,137)           (39,519)

    Net decrease in cash and equivalents.........................      (493)              (442)           (670)              (413)

    Cash and cash equivalents at beginning of period.............     1,662              1,366           1,839              1,337
                                                                    --------           ---------      ----------       -----------
    Cash and cash equivalents at end of period................... $   1,169           $    924       $   1,169           $    924
                                                                    --------           ---------      ----------       -----------
                                                                    --------           ---------      ----------       -----------

    Supplemental disclosures of cash flow information:

        Cash paid for interest................................... $    ---           $    ---        $  17,067           $ 17,210
                                                                    --------           ---------      ----------       -----------
                                                                    --------           ---------      ----------       -----------

         The accompanying notes are an integral part of these 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 include
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, 1998 Annual Report on Form 10-K.

Note 2. New Accounting Pronouncements

In  June  1998,  the  FASB  issued  SFAS  No.  133,  Accounting  for  Derivative
Instruments  and Hedging  Activities.  SFAS No. 133  establishes  accounting and
reporting standards for derivative instruments.  It requires that all derivative
instruments  be  recognized  in the  balance  sheets as  assets  or  liabilities
measured at fair value. Changes in the fair value of derivative  instruments are
recognized  as gains or losses in the  statement of operations or as a component
of other  comprehensive  income.  SFAS No. 133 is  effective  for  fiscal  years
beginning  after June 15,  2000.  Management  has not yet  evaluated  the impact
adopting SFAS No. 133 may have on the Partnership's financial statements.



                                       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, 1999  Compared to the Three and Nine
Months Ended September 30, 1998
--------------------------------------------------------------------------------

Net income for the  quarter  ended  September  30, 1999 was  approximately  $8.1
million as compared to approximately  $7.4 million for the corresponding  period
in the prior year.  The $0.7 million  increase in net income is primarily due to
an increase in gross  profit  (offset in part by an increase in other  operating
expenses).  Net  income  for the  nine  months  ended  September  30,  1999  was
approximately  $18.3 million as compared to approximately  $13.9 million for the
corresponding  period in the prior year. The $4.4 million increase in net income
is primarily due to an increase in Unit 1 operating revenues.

Total  revenues  for the quarter and nine months ended  September  30, 1999 were
approximately  $46.5  million and $129.8  million as  compared to  approximately
$43.4  million  and $125.9  million for the  corresponding  periods in the prior
year, respectively.

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

<TABLE>
<CAPTION>

                                                  For the Three Months Ended
                                September 30, 1999                         September 30, 1998
                          ------------------------------------     -------------------------------------
<S>                      <C>        <C>     <C>       <C>          <C>       <C>     <C>        <C>

                          Dollars   kWh's   Capacity  Dispatch     Dollars   kWh's   Capacity   Dispatch
                          -------   -----   --------  --------     -------   -----   --------   --------
Unit 1                      12.4     144.5    84.19%    99.28%       11.7    152.2     86.36%    100.00%
Unit 2                      33.3     539.5    92.20%    96.65%       31.5    575.2     98.30%     98.87%


                                                  For the Nine Months Ended
                                September 30, 1999                              September 30, 1998
                          -------------------------------------    --------------------------------------
                          Dollars   kWh's   Capacity  Dispatch     Dollars   kWh's   Capacity   Dispatch
                          -------   -----   --------  --------     -------   -----   --------   --------
Unit 1                      32.2     423.0    82.84%   96.64%       27.0      313.4     59.77%    67.98%
Unit 2                      91.9   1,402.5    80.78%   86.40%       93.5    1,599.4     92.12%    95.88%

</TABLE>

Revenues from Unit 1 increased  approximately  $0.7 million and $5.2 million for
the  quarter  and nine  months  ended  September  30,  1999 as  compared  to the
corresponding  periods in the prior year,  respectively.  During the quarter and
nine months  ended  September  30,  1999  revenues  from  Niagara  Mohawk  Power
Corporation  ("Niagara  Mohawk")  were  approximately  $9.3  million  and  $27.5
million,  respectively,  and  revenues  from PG&E Energy  Trading - Power,  L.P.
("PG&E  Energy  Trading")  were  approximately  $3.1  million and $4.7  million,
respectively.  During the nine months ended September 30, 1998 all revenues from
Unit 1 were from Niagara  Mohawk.  The increase in revenues  from Unit 1 for the
quarter  ended  September  30, 1999 was  primarily  due to

                                       7
<PAGE>

higher market energy  prices.  The increase in revenues from Unit 1 for the nine
months ended  September  30, 1999 was primarily due to the increase in delivered
energy as evidenced  by the  increase in the capacity  factor for the period and
improved  contract  pricing  resulting  from the  execution  of the  Amended and
Restated  Niagara  Mohawk  Power  Purchase  Agreement  on August  31,  1998.  In
conjunction  with the execution of the Amended and Restated Niagara Mohawk Power
Purchase  Agreement,  Niagara  Mohawk  no longer  has the  right to  direct  the
dispatch of Unit 1. During the nine months ended  September  30, 1999,  with the
exception of April 1999, the Partnership  received Monthly Contract Payments and
delivered energy up to the monthly contract  quantity to Niagara Mohawk.  During
the  month  of  January  1999 the  Partnership  sold  all of the  Excess  Energy
generated from Unit 1 to Niagara Mohawk.  During the months of February,  March,
June and September 1999 the Partnership  sold all of the Excess Energy generated
from Unit 1 to PG&E Energy  Trading.  During the months of April,  May, July and
August  1999 the  Partnership  sold Excess  Energy  from Unit 1 to both  Niagara
Mohawk and PG&E Energy  Trading.  Excess Energy  delivered to Niagara Mohawk and
PG&E Energy  Trading was sold at negotiated  market prices.  Amortized  deferred
revenues  of  approximately  $0.5  million are also  included  in revenues  from
Niagara Mohawk during the nine months ended September 30, 1999.

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 most 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
arrangements  which called for the pricing of delivered energy at variable rates
which were less than full contract  rates.  If the  Partnership  had not entered
into  special  dispatch  arrangements,   the  Unit  would  have  otherwise  been
dispatched off-line during the relevant periods.

Revenues  from  Unit  2  increased  approximately  $1.8  million  and  decreased
approximately  $1.6 million for the quarter and nine months ended  September 30,
1999 as compared to the corresponding  periods in the prior year,  respectively.
During the quarter and nine months  ended  September  30,  1999,  revenues  from
Consolidated  Edison Company of New York, Inc. ("Con Edison") were $33.3 million
and $91.6  million,  respectively,  and  revenues  from PG&E Energy  Trading was
approximately  $0.3 million for the nine months ended September 30, 1999. During
the quarter and nine months ended  September 30, 1998,  revenues from Con Edison
were $31.5  million and $93.5  million,  respectively,  and  revenues  from PG&E
Energy  Trading  were  approximately  $73,500 and  $148,500,  respectively.  The
increase in revenues  from Unit 2 for the quarter  ended  September 30, 1999 was
primarily  due to the increase in the Con Edison  contract  price for  delivered
energy  resulting  from higher index fuel prices.  The decrease in revenues from
Unit 2 for the nine months ended  September  30, 1999 was  primarily  due to the
decrease in delivered energy as evidenced by the decrease in the capacity factor
for the period.  During the nine months ended  September 30, 1999,  revenue from
PG&E Energy Trading was the result of the sale of other energy-related products.
During the nine  months  ended  September  30,  1998,  revenue  from PG&E Energy
Trading was the result of the sales of  generated

                                       8
<PAGE>


capacity  and energy in excess of the  contract  amount due under the Con Edison
Power Purchase Agreement.

There were no steam revenues for the quarter ended September 30, 1999 however, a
reserve of  approximately  $144,000 was recorded to reflect the estimated annual
true-up so that General  Electric would be charged a nominal amount which is the
annual  equivalent of 160,000  lbs/hr.  Steam revenues for the nine months ended
September  30, 1999 of $0.6 million  were reduced by a reserve of  approximately
$0.2  million to  reflect  the  estimated  annual  true-up.  There were no steam
revenues for the quarter ended  September 30, 1998.  Steam revenues for the nine
months ended September 30, 1998 of approximately  $0.2 million were reduced by a
reserve of the same amount to reflect the estimated  annual  true-up.  Delivered
steam for the quarter and nine months ended September 30, 1999 was approximately
313.6 million  pounds and 1,126.8  million  pounds as compared to  approximately
285.5 million pounds and 969.0 million pounds for the  corresponding  periods in
the prior year, respectively. The increase in steam revenues for the quarter and
nine months  ended  September  30,  1999 was  primarily  due to the  increase in
delivered steam.

Gas resale revenues for the quarter ended September 30, 1999 were  approximately
$0.9  million on sales of  approximately  0.4  million  MMBtu's as  compared  to
approximately $0.2 million on sales of approximately 0.1 million MMBtu's for the
corresponding  period in the prior year. The $0.7 million increase in gas resale
revenues  during the quarter ended September 30, 1999 is primarily due to higher
natural gas resale  prices and the lower  dispatch of Unit 2, which  resulted in
higher  volumes of natural gas becoming  available for resale at higher  prices.
The increase in natural gas resale prices during the quarter ended September 30,
1999 generally  resulted from higher market pricing for both gas and oil as well
as increased demands for electric generation.  The increased market activity was
also in direct response to the extremely active hurricane season and warmer than
normal temperatures. Gas resale revenues for the nine months ended September 30,
1999 and 1998 were  approximately  $5.3  million on sales of  approximately  2.3
million  MMBtu's.  Gas resales occur during  periods when Units 1 and 2 were not
operating at full capacity.

Cost of revenues  for the quarter  ended  September  30, 1999 was  approximately
$29.3 million on gas purchases of approximately  7.1 million MMBtu's as compared
to $27.4  million on gas  purchases  of  approximately  the same number of units
during the corresponding  period in the prior year. The largest component of the
increase  for the  quarter  ended  September  30,  1999  was fuel  costs,  which
increased  approximately $2.0 million from the corresponding period in the prior
year.  The increase in the cost of fuel was primarily due to the higher price of
gas under the firm fuel  contracts.  Cost of revenues  for the nine months ended
September  30,  1999  was  approximately  $84.2  million  on  gas  purchases  of
approximately 21.0 million MMBtu's as compared $84.3 million on gas purchases of
approximately  21.1 million  MMBtu's for the  corresponding  period in the prior
year.  The  Partnership  has foreign  currency swap  agreements to hedge against
future exchange rate fluctuations under fuel transportation agreements which are
denominated in Canadian dollars. During the nine months ended September 30, 1999
and

                                       9
<PAGE>


1998, fuel costs were increased by approximately  $1.8 million and $1.7 million,
respectively, as a result of the currency swap agreements.

Total other  operating  expenses for the quarter and nine months ended September
30,  1999 were  approximately  $1.2  million  and $3.4  million as  compared  to
approximately $0.6 million and $3.6 million for the corresponding periods in the
prior year,  respectively.  The  increase in other  operating  expenses  for the
quarter  ended  September  30,  1999  was  primarily  due  to  higher  affiliate
administrative  services.  The decrease in other operating expenses for the nine
months ended  September  30, 1999 was  primarily  due to lower other general and
administrative expenses.

Net interest expense for the quarter and nine months ended September 30, 1999 of
approximately $7.9 million and $23.9 million was comparable to the corresponding
periods in the prior year.


Liquidity and Capital Resources
-------------------------------

Net cash provided by operating  activities  for the quarter ended  September 30,
1999 was approximately  $20.4 million as compared to approximately $27.1 million
for the  corresponding  period in the prior year. Net cash provided by operating
activities for the nine months ended September 30, 1999 was approximately  $35.8
million as compared to approximately $39.1 million for the corresponding  period
in  the  prior  year.  Net  cash  provided  by  operating  activities  primarily
represents net income plus the net effect of recurring  changes in cash receipts
and  disbursements  within the  Partnership's  operating  assets  and  liability
accounts.  Net cash  provided by  operating  activities  for the  quarter  ended
September 30, 1998 included the net activity of approximately $6.9 million which
resulted  from the  execution of the Amended and Restated  Niagara  Mohawk Power
Purchase Agreement on August 31, 1998.

No cash was used in investing  activities for the quarters  ended  September 30,
1999 and 1998.  Net cash used in investing  activities for the nine months ended
September  30, 1999 was  approximately  $310,000  as  compared to  approximately
$14,000  for the  corresponding  period  in the  prior  year.  Net cash  used in
investing activities primarily represents additions to plant and equipment.

Net cash used in financing  activities for the quarter ended  September 30, 1999
was approximately  $20.9 million as compared to approximately  $27.5 million for
the  corresponding  period  in the  prior  year.  Net  cash  used  in  financing
activities for the nine months ended September 30, 1999 was approximately  $36.1
million as compared to approximately $39.5 million for the corresponding  period
in the prior year. The decrease in net cash used in financing activities for the
quarter  ended  September  30, 1999 was  primarily  due to the  decrease in cash
distributions  to the  Partners.  The  decrease  in net cash  used in  financing
activities  for the nine months ended  September  30, 1999 was  primarily due to
decreases in cash  deposited  into the  Partnership  Distribution  Fund and

                                       10
<PAGE>


Debt Service  Reserve Fund (offset in part by an increase in cash  distributions
to the Partners).

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 that 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 also dependent on,
among other  things,  the  performance  of  equipment;  levels of dispatch;  the
receipt  of certain  capacity  and other  fixed  payments;  electricity  prices;
natural gas resale prices;  and fuel deliveries and prices. A significant change
in any of these factors could have a material  adverse  effect on the results of
operations for the Partnership.


                                       11
<PAGE>

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


Year 2000
---------

The Year 2000 issue exists because many computer programs use only two digits to
indicate the year in a date, and was developed without considering the impact of
the upcoming  change in the century.  The  Partnership has a program in place to
address  its  exposure  to the Year 2000  issue.  This  program is  designed  to
minimize the possibility of significant Year 2000 interruptions.

In 1998,  the  Partnership  established  the program to address its software and
hardware product and customer concerns, its internal business systems, including
technology infrastructure and embedded technology systems, and the compliance of
its  suppliers.  This  program  includes the  following  phases:  inventory  and
assessment,  remediation, testing, and certification.  Certification occurs when
mission-critical  software and hardware products are determined to be "Year 2000
Ready."  The "Year 2000  Ready"  category  indicates  that the  Partnership  has
determined  that the  product,  when  used in its  designated  manner,  will not
terminate abnormally or give incorrect results with respect to date data before,
during or after December 31, 1999.  Once Year 2000 Ready,  additional  standards
and processes are imposed to prevent systems from being compromised.

The Partnership's Year 2000 certification phase was completed in April 1999. The
Partnership will continue to perform work associated with  contingency  planning
implementation, and the assessment and remediation of non-mission critical items
through   the  end  of  1999.   The   Partnership   determined   that  its  only
mission-critical  software was vendor software.  As to  mission-critical  vendor
software,  Year 2000 ready upgrades have been obtained from the vendors,  tested
as appropriate and deemed Year 2000 Ready.

The Partnership  has tested  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 were tested on an integrated and unit basis.
The integrated system test was intended to replicate the  Partnership's  typical
processes  with  dates  and  data  advanced  and  aged  to  simulate  Year  2000
operations.  Unit tests supplement the integrated  testing to evaluate remaining
functions that were not part of the  integrated  test.  Testing,  by its nature,
however,  cannot  comprehensively  address all future  combinations of dates and
events. Because some uncertainty remains 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,  failure of such systems,  should they
occur, could have a material adverse impact on future results.

                                       12
<PAGE>


In addition to internal systems,  the Partnership depends upon external parties,
including  customers,  suppliers,  business  partners,  gas and electric  system
operators,  government  agencies,  and  financial  institutions  to support  the
functioning  of its  business.  To the  extent  that  any of these  parties  are
considered  mission-critical  to the Partnership's  business and experience Year
2000 problems in their  systems,  the  Partnership's  mission-critical  business
functions  may be  adversely  affected.  To deal  with this  vulnerability,  the
Partnership  has another  phased  approach.  The primary phases for dealing with
external parties are: (1) inventory,  (2) action planning,  (3) risk assessment,
and (4) contingency planning.

In April 1999, the Partnership  completed its inventory,  action planning,  risk
assessment  and  contingency  planning  phases  for  mission-critical   external
parties.

Although the Partnership  expects its efforts and those of its external  parties
to be largely  successful,  the  Partnership  recognizes  that with the  complex
interaction of today's computing and communication systems, it cannot be certain
the Partnership will be completely successful. Therefore, contingency plans have
been   developed  and  tested   through  April  1999  to  address  its  external
dependencies  as well as exposure  that could  result  from  failures in our own
essential  business  functions.  These  plans have taken into  account  possible
interruptions   of   power,    computing,    financial,    and    communications
infrastructures. Contingency plans will be revised throughout 1999 as necessary.
Due to the uncertainty  inherent in the  contingencies for which plans are being
prepared,  however,  it is uncertain  whether  these plans will be sufficient to
remove the risk of material  impacts on the  Partnerships  operations  resulting
from Year 2000 problems.

Through October 1999, the Partnership  spent  approximately  $520,000 to assess,
remediate and test Year 2000 problems for both mission  critical and non-mission
critical items.  This amount includes  $148,000 of affiliate related labor costs
whereas,  these costs were not included in previous  reports.  The Partnership's
estimate of future costs to address Year 2000 issues is approximately $20,000 to
implement contingency plans and to address remaining non-mission critical items;
all of which will be expensed.

The Partnership  has concluded that the most  reasonably  likely worst case Year
2000  scenarios  that could  affect its  business  include  localized  telephone
problems due to congestion and small isolated  malfunctions in the Partnership's
computer  systems  that  would be  immediately  repaired.  The  Partnership  has
developed contingency plans to address these scenarios.

If  third  parties  with  whom  the   Partnership   has   significant   business
relationships,  fail to achieve Year 2000 readiness of mission-critical systems,
there  could  be a  material  adverse  impact  on  the  Partnership's  financial
position, results of operations, and cash flows.

                                       13
<PAGE>


Cautionary Statement Regarding Forward-Looking Statements
---------------------------------------------------------

Certain statements included herein are forward-looking statements concerning the
Partnership's  operations,  economic performance and financial  condition.  Such
statements are subject to various risks and uncertainties.  Actual results could
differ  materially from those currently  anticipated due to a number of factors,
including  general  business  and  economic   conditions;   the  performance  of
equipment;  levels of dispatch;  the receipt of certain capacity and other fixed
payments;  electricity  prices;  natural gas resale prices;  fuel deliveries and
prices;  whether  Con  Edison  were to  prevail  in its claim to Unit 2's excess
natural gas  volumes,  and the related  margins and issues  related to Year 2000
compliance.


ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The  Partnership  is exposed to market risk from  changes in interest  rates and
foreign  currency  exchange  rates,  which  could  affect its future  results of
operations  and financial  condition.  The  Partnership  manages its exposure to
these risks through its regular operating and financing activities.

Interest Rates

The Partnership's  cash and restricted cash are sensitive to changes in interest
rates.  Interest rate changes would result in a change in interest income due to
the difference  between the current  interest rates on cash and restricted  cash
and the  variable  rate that these  financial  instruments  may adjust to in the
future.  A 10% decrease in interest  rates for the quarter and nine months ended
September  30, 1999 would have  resulted in a negative  impact of  approximately
$55,000 and  $163,000,  respectively  on the  Partnership's  net income for that
period.

The  Partnership's  long-term  bonds have fixed interest  rates.  Changes in the
current  market  rates for the bonds  would not  result in a change in  interest
expense due to the fixed coupon rate of the bonds.

Foreign Currency Exchange Rates

The  Partnership's  currency swap agreements  hedge against future exchange rate
fluctuations  which  could  result  in  additional  costs  incurred  under  fuel
transportation agreements which are denominated in the Canadian currency. In the
event  a  counterparty   fails  to  meet  the  terms  of  the  agreements,   the
Partnership's  exposure is limited to the currency  exchange rate  differential.
During the quarter and nine months ended  September  30, 1999 the exchange  rate
differential  had a  negative  impact of  approximately  $0.6  million  and $1.8
million, respectively on the Partnership's net income.

                                       14


<PAGE>


                           PART II. OTHER INFORMATION

ITEM 5.  OTHER ITEMS

Douglas F. Egan, Senior Vice President, resigned on November 5, 1999.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(A)          Exhibits

             Exhibit No.            Description

                  27                Financial Data Schedule
                                    (For electronic filing purposes only)


(B)      Reports on Form 8-K

         Not applicable.

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


                                       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 PARTNERS, L.P.

                                    JMC SELKIRK, INC.
                                    General Partner

Date: November 15, 1999             /s/  JOHN R. COOPER
                                    --------------------------------------
                                    Name:     John R. Cooper
                                    Title:    Senior Vice President and
                                              Chief Financial Officer











                                       16

<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 15, 1999                    /s/  JOHN R. COOPER
                                            ------------------------------------
                                            Name:    John R. Cooper
                                            Title:   Senior Vice President and
                                                     and Chief Financial Officer







                                       17