CONFORMED COPY WITH EXHIBIT
                                                 ----------------------------
-----------------------------------------------------------------------------



                                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, 1996
                                     OR
           [  ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934
           For the transition period from _________ to __________

                       Commission File Number 33-83618

                      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)


	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 1, 1996 there were 10 shares of common  stock  of  Selkirk
Cogen Funding Corporation, $1 par value, outstanding.



-----------------------------------------------------------------------------
     
          This  document  consists  of 21 pages of which this page is page 1.

<PAGE>
      











                                        

                              TABLE OF CONTENTS




										                                                       Page
						                												                               ----
                       PART I.  FINANCIAL INFORMATION


Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Balance Sheets as of September 30, 1996 
		and December 31, 1995.........................................	   3

		Condensed Consolidated Statements of Operations for
		the three months and nine months ended September 30, 1996
		and September 30, 1995........................................	   4

		Condensed Consolidated Statements of Cash Flows for
		the three months and nine months ended September 30, 1996
		and September 30, 1995........................................	   5

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

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

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


		Liquidity and Capital Resources...............................	  10


                         PART II.  OTHER INFORMATION


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

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







                                      2
<PAGE>



                        
<TABLE>
                        SELKIRK COGEN PARTNERS, L.P.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)
                                 (unaudited)
<CAPTION>							
                       				     	      September 30,  December 31, 
						                              1996		     1995
						                           ----------	 -----------
<S>												      <C>	       	<C>
ASSETS		
------										
Current assets:									
  Cash............................................ $    1,546     $    2,672 
  Restricted funds................................	   22,025         10,010 
  Accounts receivable.............................     14,422         17,317 
  Due from affiliates.............................         14             17 
  Fuel inventory and supplies.....................	    4,190          3,573
  Other current assets............................	      195	       1,012 
  				                   					---------	   ---------
    	Total current assets......................     42,392         34,601 
										
  Plant and equipment, net........................    337,395        346,285 
  Long-term restricted funds......................     20,446         20,906 
  Deferred financing charges, net.................     13,408         14,288 
                                     				---------	   ---------

				Total Assets		               $  413,641     $  416,080
   			                                    	---------	   ---------
   			                                       	---------	   ---------
LIABILITIES AND PARTNERS' CAPITAL									
---------------------------------										
Current liabilities:									
  Accounts payable................................ $      143 	  $      372 
  Accrued bond interest payable...................	    9,043            385 
  Accrued expenses................................     11,581         12,863 
  Due to affiliates...............................      1,046	         262 
  Advances from customer..........................         17 	         153 
  Current portion of long-term bonds..............      1,357 	         580 
	  					                        	---------	   ---------
	    Total current liabilities................. 	   23,187         14,615 
										
  Other long-term liabilities.....................	   11,690          8,515 
  Long-term bonds, less current portion........... 	  390,359        391,420 
										
  General partners' capital.......................	     (92) 		      43 
  Limited partners' capital.......................	 (11,503)          1,487 
	   											    ---------	   ---------
	    Total partners' capital...................   (11,595)          1,530 
											       	---------	   ---------

				Total Liabilities and
					 Partners' Capital             $  413,641     $  416,080 
												    --------- 	   ---------
												    ---------	   ---------
<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	
                              ---------------------	    --------------------

                          September30, September30, September30, September30,
                 		        1996         1995		  1996       1995
               	              ---------   ---------	   ---------   ---------
<S>                              <C>        <C>          <C>          <C>
Operating revenues:								   

 Electric and steam.........  $  36,128   $  34,316    $ 109,837   $ 106,850
 Gas resale.................      5,011       3,033		  19,816       9,066
						      ---------   ---------	   ---------   ---------
    Total operating 
      revenues..............	 41,139      37,349 	 129,653	 115,916
Cost of revenue.............     29,570      27,723		  89,236	  85,879
							  ---------   ---------	   ---------   ---------
Gross Profit................     11,569       9,626 	  40,417	  30,037
						 	 	   			
Other operating expenses:										
 Administrative services -
   affiliates...............	    656         526        1,836       1,861 	
 Other general and 
   administrative expenses..	    694 		782        2,520       2,642 	
 Amortization of deferred
   financing charges........	    293         309 		 880         929 	
							  ---------   ---------	   ---------   ---------
	Total other operating
	  expenses..............      1,643       1,617 	   5,236	   5,432
							  ---------   ---------	   ---------   ---------
				 
Operating income............      9,926       8,009 	  35,181      24,605
											
Net interest expense........      8,210       8,002       24,699      24,243 	 
							  ---------   ---------	   ---------   ---------
Net income (loss)...........  $   1,716   $       7	   $  10,482   $     362
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------


Allocated to:
  General partners..........  $      17	  $    ---    $     105   $      28 
  Limited partners..........	  1,699  	     7  	 10,377	        334
                              ---------   ---------	   ---------   ---------                  
	Total...................  $   1,716   $      7    $  10,482   $     362	
                              ---------   ---------	   ---------   ---------
       						  ---------   ---------	   ---------   ---------  			    					 						                                     	
<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	
                              ---------------------	    --------------------

                          September30, September30, September30, September30,
                 		        1996         1995		  1996       1995
               	              ---------   ---------	   ---------   ---------
<S>                              <C>        <C>          <C>          <C>
										                                    		 
Net cash provided by  
 operating activities.......  $  16,506   $  11,154	   $  35,058   $  16,171
																	  
Cash flows provided by 
 (used in) investing 
  activities:											
   Plant and equipment 
    additions...............       (99)	    (1,182)	       (602)	 (3,376)
   Plant and equipment 
    additions - affiliates..	    ---	        (9)		     ---	   (132)
   Restricted funds.........   (16,218)		  6,116		(11,555)	  12,450
							  ---------   ---------	   ---------   ---------
  			                                    	   
	Net cash provided by 
	 (used in) investing
	  activities............   (16,317)	      4,925	    (12,157)       8,942
												
Cash flows provided by 
 (used in) financing 
  activities:											
   Cash distributions.......        ---    (16,293)     (23,607)	(21,012)
   Payments of principal on
    long-term debt..........        ---		    ---	       (284)	     ---
   Payments for cost of 
    financing...............	    ---   		---			 ---	   (185)
   Advances from a 
    customer................	    ---         ---	       (136)	 (5,299)
                              ---------   ---------	   ---------   ---------
    Net cash used in 
      financing activities..        ---	   (16,293)	    (24,027)    (26,496)
												
Net increase (decrease)

 in cash....................        189	      (214)      (1,126)     (1,383)
Cash at beginning 
 of period..................      1,357 	  2,567		   2,672	   3,736
							  ---------   ---------	   ---------   ---------
Cash at end of period.......  $   1,546   $   2,353    $   1,546   $   2,353
                              ---------   ---------	   ---------   ---------
          					  ---------   ---------	   ---------   ---------
   
Supplemental disclosures of 
 cash flow information:										

  Cash paid for interest....  $     ---   $     103    $  17,620   $  17,831   
							  ---------   ---------	   ---------   ---------
                              ---------   ---------	   ---------   ---------

  Items not affecting cash:
   Preferred distribution
    payable - in arrears.... $      ---   $ (1,800)    $     ---   $     ---   
							  ---------   ---------	   ---------   ---------
                              ---------   ---------	   ---------   ---------		
												                                        	---------	   ---------

<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, 1995 Annual Report on Form 10-K.


Note 2. New Accounting Pronouncements 


In  March  1995,  the  Financial  Accounting  Standards  Board  (FASB) issued
Statement of Financial Accounting Standards (SFAS) No.  121,  Accounting  for
the  Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of,
effective for fiscal years beginning  after  December 15, 1995.  SFAS No. 121
establishes accounting standards for the impairment of long-lived assets  and
requires  that  a  loss  be  recognized  for  those  assets if the sum of the
expected future cash  flows  from  the  use  of  the  asset  and its eventual
disposition (undiscounted) is less than the carrying  amount  of  the  asset.
The  Partnership adopted SFAS No. 121 on January 1, 1996, and it did not have
a material impact  on  the  Partnership's  financial  position  or results of
operations.







                                      6
<PAGE>











                        SELKIRK COGEN PARTNERS, L.P.

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



Note 3. 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.





















                                      7
<PAGE>









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

Results of Operations

Three and Nine Months Ended September 30, 1996 Compared to the Three and Nine
Months Ended September 30, 1995:

Net income for the quarter  ended  September 30, 1996, was approximately $1.7
million as compared to $7.0 thousand for  the  corresponding  period  in  the
prior  year.   Net  income  for the nine months ended September 30, 1996, was
approximately $10.5 million as compared to $0.4 million for the corresponding
period in the prior year.   The  increase  in  net income for the quarter and
nine months ended September 30, 1996 is primarily due to  increased  revenues
and  margins  generated  from  gas  resales  and  to a lesser extent electric
revenues from Consolidated Edison  Company  of  New York, Inc. ("Con Edison")
when compared to the corresponding periods in the prior year.

Total revenues for the quarter and nine months ended September 30, 1996, were
approximately  $41.1  million and $129.7 million as compared to $37.3 million
and  $115.9  million  for  the  corresponding  periods  in  the  prior  year,
respectively.

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

    			                      For the Three Months Ended	
                           September 30, 1996          September 30, 1995	
	                    ------------------------	------------------------
	                    Dollars	 kWh's	Dispatch	Dollars	 kWh's	Dispatch
                     	-------	 -----	--------	-------	 -----	--------
Niagara Mohawk	          6.9	  59.4   47.83%	      7.0     79.1	 49.10%
Con Edison	             29.0	 416.6	 88.63%	     27.0	 429.6	 85.30%


      			                      For the Nine Months Ended	
                            September 30, 1996        September 30, 1995	
                        ------------------------	----------------------       
		                Dollars	 kWh's	Dispatch	Dollars	 kWh's	Dispatch
					    -------  -----	--------	-------	 -----	--------
Niagara Mohawk	         20.8	 180.0	 44.74%	     20.9    229.0	 47.20%
Con Edison	             87.1  1,216.0	 88.79%	     84.1  1,469.1	 90.30%


Revenues  from  Niagara  Mohawk  Power  Corporation  ("Niagara  Mohawk") were
comparable for the quarter  and  nine  months  ended  September 30, 1996 when
compared to the  corresponding  periods  in  the  prior  year,  respectively.
Decreased production partially offset by higher energy prices was the primary
factor  causing the revenues to remain comparable during the quarter and nine
months ended September 30, 1996  as  compared to the corresponding periods in
the prior year.  During the quarter ended September 30, 1996 energy delivered
to Niagara Mohawk was sold entirely at full contract rates, whereas  for  the
quarter  ended  September  30,  1995,  the  Partnership  entered into special
dispatch arrangements with Niagara  Mohawk  which  called  for the pricing of
delivered energy at variable rates less than full contract rates.  During the
nine months ended September  30,  1996,  Niagara  Mohawk  dispatched  Unit  1
on-line, at full contract rates for January, the majority of February, April,
May,  June,  July,  August and September and off-line for the entire month of
March.  Energy delivered  to  Niagara  Mohawk  during  the  nine months ended
September 30, 1996, was  sold  primarily  at  full  contract  rates  and  the
Partnership  entered  into  few special dispatch arrangements, whereas during
the nine months ended September  30, 1995, the Partnership frequently entered
into special dispatch arrangements with Niagara Mohawk,  at  times  when  the
Unit  would  have  otherwise  been  dispatched off line, which called for the
pricing of delivered energy at variable rates less than full contract rates.

                                      8

<PAGE>

Revenues from Con Edison  increased  $2.0  million  and  $3.0 million for the
quarter and nine months ended  September  30,  1996,  when  compared  to  the
corresponding  periods  in  the  prior  year,  respectively.  Higher contract
energy rates, resulting from higher  index  fuel prices, was the contributing
factor to the increase in revenues during the  quarter  ended  September  30,
1996  as  compared  to  the  corresponding  period in the prior year.  Higher
contract energy  rates  resulting  from  higher  index  fuel prices partially
offset by decreased production, was the primary factor  contributing  to  the
increase in revenues during the nine months ended September 30, 1996.  During
the  nine months ended September 30, 1996, energy delivered to Con Edison was
sold entirely at full  contract  rates,  whereas  for the majority of January
1995 and for a few days in February and April 1995, the  Partnership  entered
into  special  dispatch  arrangements with Con Edison, at times when the Unit
would have  otherwise  been  dispatched  off  line.   These  special dispatch
arrangements called for the pricing of delivered  energy  at  variable  rates
less than full contract rates.

Steam  revenues  for the quarter ended September 30, 1996, were approximately
$0.2 million on 357.164  million  pounds  of  steam  delivered as compared to
approximately $0.3 million on 373.747 million pounds of steam  delivered  for
the  corresponding  period  in  the  prior year.  Steam revenues for the nine
months ended September 30,  1996,  were  approximately  $1.9 million on 1.378
billion pounds of steam delivered as compared to approximately  $1.8  million
on  1.373  billion pounds delivered for the corresponding period in the prior
year.  The decrease in steam revenues  during the quarter ended September 30,
1996 was primarily due to lower steam demand.  Higher index fuel pricing  and
colder than normal winter months were the primary factors contributing to the
increase  in  steam  revenues for the nine months ended September 30, 1996 as
compared to the corresponding period  in the prior year.  Additionally, steam
revenues for the nine months ended  September  30,  1996  include  an  annual
true-up of $0.2 million in favor of the steam host.

Gas  resale  revenues  for  the   quarter  ended  September  30,  1996,  were
approximately $5.0 million on sales of approximately 2.2 million  MMBtu's  as
compared  to  $3.0  million on sales of approximately 1.8 million MMBtu's for
the corresponding period in the prior year.  Gas resale revenues for the nine
months ended September 30, 1996, were approximately $19.8 million on sales of
approximately 6.4 million MMBtu's  as  compared  to  $9.1 million on sales of
approximately 5.1 million MMBtu's for the corresponding period in  the  prior
year.   The  $2.0  million increase in gas resale revenues during the quarter
ended September 30, 1996 as compared to the corresponding period in the prior
year is primarily due to an increase in average natural gas resale prices and
a reduction in Unit 1 production which resulted in greater volumes of natural
gas becoming available for resale.   An  increase  in the average natural gas
resale price and a reduction in the production of Units  1  and  2  were  the
factors contributing to the $10.8 million increase in gas resale revenues for
the  nine  months  ended  September 30, 1996 as compared to the corresponding
period in the prior year.  The  increase in average natural gas resale prices
generally resulted from the colder than normal temperatures this past  winter
which caused an increase in demand for natural gas and resulted in lower than
normal gas storage levels.  In preparation for the upcoming winter, companies
have  been  purchasing  higher  volumes  of natural gas to accumulate storage
reserves.

                                      9

<PAGE>

Cost of revenues for the  quarter  and  nine  months ended September 30, 1996
were approximately $29.6 million on purchases  of  7.1  million  MMBtu's  and
$89.2  million  on  purchases  of  21.3  million MMBtu's as compared to $27.7
million on purchases of 7.3 million MMBtu's and $85.9 million on purchases of
22.6 million  MMBtu's  for  the  corresponding  periods  in  the  prior year,
respectively.  The largest component of the increase in cost of revenues were
fuel purchases which increased $1.4 million and $2.6 million for the  quarter
and  nine  months  ended  September 30, 1996 as compared to the corresponding
periods in the prior year, respectively.   This  increase in the cost of fuel
is primarily due to the fuel escalation clauses contained in  the  firm  fuel
supply contracts.

Total  other  operating  expenses  for  the  quarter  and  nine  months ended
September  30,  1996,  of  approximately  $1.6  million  and   $5.2   million
respectively, were comparable to the corresponding periods in the prior year.

Net  interest  expense  for  the  quarter and nine months ended September 30,
1996, of approximately  $8.2  million  and  $24.7  million respectively, were
comparable to the corresponding periods in the prior year.


Liquidity and Capital Resources

Net cash flows provided by operating activities increased from  approximately
$11.2  million  for the quarter ended September 30, 1995 to $16.5 million for
the quarter ended September 30,  1996.   Net cash flows provided by operating
activities increased from approximately $16.2 million  for  the  nine  months
ended September 30, 1995 to $35.1 million for the nine months ended September
30,  1996.   The increases in net cash flows provided by operating activities
were primarily due to the  $1.7  million  and  $10.1 million increases in net
income from operations during the quarter and nine months ended September 30,
1996, respectively.  The  remainder  of  the  increases  in  net  cash  flows
provided  by  operating  activities  during the quarter and nine months ended
September  30,  1996  were  due  to  normally  recurring  cash  receipts  and
disbursements  within  the   Partnership's   operating  asset  and  liability
accounts.
                                     10

<PAGE>

Net  cash  flows used in investing activities for the quarter ended September
30, 1996 were  approximately  $16.3  million  as  compared  to net cash flows
provided by investing activities  of  $4.9  million  for  the  quarter  ended
September 30, 1995.  Net cash flows used in investing activities for the nine
months  ended September 30, 1996 were approximately $12.2 million as compared
to net cash flows provided  by  investing  activities of $8.9 million for the
nine months ended September 30, 1995.   Net  cash  flows  used  in  investing
activities  primarily  represent  monies  deposited  into  Funds pursuant the
Depositary and Disbursement Agreement, administered by Bankers Trust Company,
as depositary agent  (the  "Funds").   Net  cash  flows provided by investing
activities primarily represent  monies  withdrawn  from  the  Funds.   Monies
deposited  into  the Funds for the quarter ended September 30, 1996 primarily
represent monies set aside for interest and principal payments to Bondholders
scheduled for December 26,  1996.   Monies  withdrawn  from the Funds for the
quarter ended September 30, 1995 primarily represent a  distribution  to  the
Partners.   Monies  deposited  into  the  Funds  for  the  nine  months ended
September 30, 1996  primarily  represent  monies  set  aside for interest and
principal  payments  to  Bondholders  on  December   26,   1996   offset   by
distributions  to the Partners.  Monies withdrawn from the Funds for the nine
months ended September 30, 1995 primarily  represent a one-time payment to GE
Plastics and distributions to the Partners.

Net cash flows used in  financing  activities for the quarter ended September
30, 1995 consists of approximately $16.3 million in cash distributions to the
Partners.  Net  cash  flows  used  in  financing  activities  decreased  from
approximately  $26.5  million for the nine months ended September 30, 1995 to
$24.0 million for the nine months  ended September 30, 1996.  The decrease in
cash flows used in financing activities is primarily due to  a  $2.6  million
increase  in  cash  distributions  during the nine months ended September 30,
1996 offset by an approximate  $5.3  million  one-time payment to GE Plastics
during the nine months ended September 30, 1995. 

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 i
nvoices 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.

                                     11

<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.


Niagara Mohawk PowerChoice Proposal

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  explaining the PowerChoice proposal (the "October 12 Statement").
In the October 12  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").  Niagara Mohawk has proposed that, if it cannot renegotiate its
contracts with  non-utility  generators,  it  would  take  possession of such
independent  power  projects  through  the  power  of  eminent   domain   and
subsequently sell such projects.  In the October 12 Statement, Niagara Mohawk
states  that  it  has  not ruled out the ultimate possibility of a filing for
restructuring under Chapter 11 of  the  U.S.  Bankruptcy Co de, should it not
achieve its objectives under PowerChoice and other  measures  fail  as  well.
The  Partnership  notes,  however,  Niagara Mohawk reported positive earnings
during the fourth quarter of 1995  and is seeking electric rate increases for
1996 and 1997 in a filing with the NYPSC.  In January 1996, it  was  reported
that  Niagara  Mohawk's board of directors elected to eliminate its quarterly
cash dividend on its  common  stock.   Niagara  Mohawk  last paid a quarterly
dividend on November 30, 1995.  In April 1996, it was reported  that  Moody's
Investors  Service  ("Moody's")  downgraded  the  long-term credit ratings of
Niagara Mohawk.  Moody's reported that their  action was based on the limited
progress  made  in  achieving  the  goals  identified  in  Niagara   Mohawk's
PowerChoice  proposal,  among  other financial concerns, which may ultimately
lead to a voluntary bankruptcy filing.   Moody's also reported that they gave
Niagara Mohawk a "negative outlook" because of the level of  uncertainty  and
potential  volatility  of  the situatio n.  In May 1996, it was reported that
the NYPSC rejected  Niagara  Mohawk's  filing  request  for  an electric rate
increase for 1996.  The NYPSC is scheduled  to  consider  in  early  1997  an
electric  rate  increase  request  filed  by  Niagara  Mohawk  for  1997.  In
addition, it was reported that  Niagara  Mohawk  had  a loss during the third
quarter ended and September 30, 1996 and positive earnings  during  the  nine
months  ended  September 30, 1996.  The Partnership expresses no opinion with
respect  to  the  likelihood  that  all  or  any  part  of  Niagara  Mohawk's
PowerChoice  proposal  (including   its   features  relating  to  non-utility
generators) will eventually be adopted, in any form, by any  or  all  of  the
parties involved, nor does the Partnership express an opinion with respect to
the viability of Niagara Mohawk's proposed alternatives.

                                     12

<PAGE>

In furtherance of  Niagara  Mohawk's  PowerChoice  proposal,  Niagara  Mohawk
announced  on  August  1,  1996  its  offer  to  buyout  44 independent power
contracts in a  proposed  transaction  in  which  a  combination  of cash and
securities of a newly structured Niagara Mohawk would be paid in exchange for
cancellation of these contracts.  On August 1, 1996, the Partnership received
a generic proposal from Niagara Mohawk with respect to the inclusion  of  the
Niagara   Mohawk   Power  Purchase  Agreement  in  this  buyout  offer.   The
Partnership is currently evaluating the  proposal, which has been conditioned
by Niagara Mohawk on a number  of  factors,  the  satisfaction  of  which  is
uncertain.   In  response  to  Niagara Mohawk's proposal, advisors to each of
Niagara Mohawk and the  independent  power  producers subject to the proposal
have met, but no  agreements  have  been  reached  in  these  meetings.   Any
settlement  discussions  with  respect  to  the  proposal will be governed by
strict confidentiality requirements imposed  by Niagara Mohawk and management
expects that the substantive details of the buyout proposal would be  subject
to  negotiation and modification.  Accordingly, due to the preliminary nature
and uncertainties of any  such  buyout  discussions, the Partnership believes
that it would not be meaningful to comment on any details of the proposal.

As a result of Niagara Mohawk's PowerChoice proposal, Standard &  Poor's  and
Moody's  have given the Bonds a "negative outlook".  According to such rating
agencies,  these  actions  were  motivated,  in  part,  by  the uncertainties
surrounding the effects of the PowerChoice proposal on  the  Partnership,  as
well  as  by  questions  concerning the future financial stability of Niagara
Mohawk.

For the quarter and nine  months  ended  September 30, 1996 electric sales to
Niagara Mohawk accounted for approximately 16.8% and 16.0%, respectively,  of
total project revenues.  The contract with Niagara Mohawk includes provisions
which  permit  Niagara  Mohawk  to  dispatch  the  Facility  on  the basis of
economic, as well as  operational  considerations.  The Partnership continues
to believe that it has a valid and binding contract with Niagara Mohawk.  The
Partnership cannot yet determine,  however,  what  effect,  if  any,  Niagara
Mohawk's  activities  regarding  its  PowerChoice  proposal  will have on the
Partnership, its business or net operating revenues.

                                     13

<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.

                                     14

<PAGE>



                         PART II.		OTHER INFORMATION

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

	Exhibit No.	Description				                      Page No.
	----------  -----------                                   -------
	  
	  10.1		Third Amendment to Power Purchase	     		17
				Agreement, dated as of September 13, 1996, 
				between Selkirk Cogen Partners, L.P. 
				(the "Partnership") and Consolidated Edison
				Company of New York, Inc. ("Con Edison")
				which allows the Partnership to sell 
				capacity and energy of the Plant in excess
				of the maximum 265 megawatts Dependable 
				Maximum Net Capability committed to Con
				Edison, subject to the right of first
				refusal in favor of Con Edison.

	
		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>




                      









                        




                      SELKIRK COGEN FUNDING CORPORATION


                                 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, 1996	                 /s/    JOHN R. COOPER
                                        --------------------------
 	                                     Name:  John R. Cooper
                                         Title:	Senior Vice President and
		                                        and Chief Financial Officer
			

						





















                                     16