`=====================================================================================================`

UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549FORM 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, 2001Commission 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
          
          
          
          
          
          
(I.R.S. Employer Identification Number)
        
incorporation or organization)

SELKIRK COGEN FUNDING CORPORATION
            (Exact name of co-registrant as specified in its charter)

Delaware
          
          
          
          
          
          
          
          
          
51-0354675
        
(State or other jurisdiction of
          
          
          
          
          
          
(I.R.S. Employer Identification Number)
        
incorporation or organization)

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  13,  2001,  there were 10 shares of common stock of Selkirk
Cogen Funding Corporation, $1 par value outstanding.

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TABLE OF CONTENTS

`Page
                                                                          ----

                      PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements (unaudited)

           Consolidated Balance Sheets as of September 30, 2001
           and December 31, 2000........................................    1

           Consolidated Statements of Operations for the three and
           nine months ended September 30, 2001 and 2000................    2

           Consolidated Statements of Cash Flows for the three and
           nine months ended September 30, 2001 and 2000................    3

           Notes to Consolidated Financial Statements...................    4

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

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

           Liquidity and Capital Resources..............................   13

Item 3.    Quantitative and Qualitative Disclosures About Market Risk ..   15


                        PART II. OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K..............................  16

SIGNATURES...............................................................  17

                                      i`

`SELKIRK COGEN PARTNERS, L.P.
                           CONSOLIDATED BALANCE SHEETS
                                 (in Thousands)

                                                                                 (unaudited)
                                                                                September 30,             December 31,
                                                                                    2001                      2000
                                                                              ------------------         ----------------
 ASSETS

 CURRENT ASSETS:
     Cash and cash equivalents                                                      $     2,012               $    3,187
     Restricted funds                                                                    26,727                    5,089
     Accounts receivable, net of allowance of $196 and $174                              17,630                   20,097
     Due from affiliates                                                                    119                    3,882
     Fuel inventory and supplies                                                          9,920                    6,693
     Other current assets                                                                   926                      436
                                                                              ------------------         ----------------
                Total current assets                                                     57,334                   39,384
                                                                              ------------------         ----------------

 PLANT AND EQUIPMENT:
     Plant and equipment, at cost                                                       373,222                  372,443
     Less: Accumulated depreciation                                                      96,443                   87,119
                                                                              ------------------         ----------------
                Plant and equipment, net                                                276,779                  285,324
                                                                              ------------------         ----------------

 LONG-TERM RESTRICTED FUNDS                                                              24,314                   25,732

 DEFERRED FINANCING CHARGES, net of accumulated
      amortization of $8,625 and $7,789, respectively                                     7,666                    8,502
                                                                              ------------------         ----------------
 TOTAL ASSETS                                                                      $    366,093              $   358,942
                                                                              ==================         ================

 LIABILITIES AND PARTNERS' DEFICITS

 CURRENT LIABILITIES:
     Accounts payable                                                                $      870                $      49
     Accrued bond interest payable                                                        8,503                      368
     Accrued expenses                                                                    16,687                   21,156
     Due to affiliates                                                                      977                      635
     Current portion of long-term bonds                                                  11,673                   11,062
     Current portion of liability for derivative contracts                                3,992                      ---
                                                                              ------------------         ----------------
                Total current liabilities                                                42,702                   33,270

 LONG-TERM LIABILITIES:
     Deferred revenue                                                                     4,774                    5,304
     Other long-term liabilities                                                          7,891                    7,250
     Long-term bonds -  net of current portion                                          356,143                  362,764
     Liability for derivative contracts - net of current portion                          5,656                      ---
                                                                              ------------------         ----------------
                Total liabilities                                                       417,166                  408,588
                                                                              ------------------         ----------------

 COMMITMENTS AND CONTINGENCIES

 PARTNERS' DEFICITS:
     General partners' deficits                                                           (407)                    (485)
     Limited partners' deficits                                                        (41,537)                 (49,161)
     Accumulated other comprehensive loss                                               (9,129)                      ---
                                                                              ------------------         ----------------
                Total partners' deficits                                               (51,073)                 (49,646)
                                                                              ------------------         ----------------
 TOTAL LIABILITIES AND PARTNERS' DEFICITS                                          $    366,093              $   358,942
                                                                              ==================         ================
 See notes to consolidated financial statements.

                                                                      1


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

                                                       For the Three Months Ended            For the Nine Months Ended
                                                    ---------------------------------    ----------------------------------

                                                    September 30,     September 30,       September 30,     September 30,
                                                         2001              2000               2001               2000
                                                    ---------------   ---------------    ----------------   ---------------
OPERATING REVENUES:
     Electric and steam                                $    52,433       $    55,070         $   159,944       $   147,810
     Fuel revenues                                             691             1,693              17,330            21,808
                                                    ---------------   ---------------    ----------------   ---------------
              Total operating revenues                      53,124            56,763             177,274           169,618
                                                    ---------------   ---------------    ----------------   ---------------

COST OF REVENUES:
     Fuel and transmission costs                            26,541            31,704              99,396            97,103
     Other operating and maintenance                         3,667             2,901              14,172             9,953
     Depreciation                                            3,125             3,111               9,363             9,369
                                                    ---------------   ---------------    ----------------   ---------------
              Total cost of revenues                        33,333            37,716             122,931           116,425
                                                    ---------------   ---------------    ----------------   ---------------
GROSS PROFIT                                                19,791            19,047              54,343            53,193
                                                    ---------------   ---------------    ----------------   ---------------

OTHER OPERATING EXPENSES:
     Administrative services, affiliates                       478               409               1,448             1,762
     Other general and administrative                          669               567               1,983             1,609
     Amortization of deferred financing charges                276               283                 836               854
                                                    ---------------   ---------------    ----------------   ---------------
              Total other operating expenses                 1,423             1,259               4,267             4,225
                                                    ---------------   ---------------    ----------------   ---------------

OPERATING INCOME                                            18,368            17,788              50,076            48,968
                                                    ---------------   ---------------    ----------------   ---------------

INTEREST (INCOME) EXPENSE:
     Interest income                                         (377)             (755)             (1,682)           (2,223)
     Interest expense                                        8,141             8,864              24,678            25,720
                                                    ---------------   ---------------    ----------------   ---------------
              Total interest expense, net                    7,764             8,109              22,996            23,497
                                                    ---------------   ---------------    ----------------   ---------------

Income before cumulative effect of a change
     in accounting principle                                10,604             9,679              27,080            25,471

Cumulative effect of a change in
     accounting principle                                    (519)               ---               (519)             7,866
                                                    ---------------   ---------------    ----------------   ---------------
NET INCOME                                             $    10,085       $     9,679         $    26,561       $    33,337
                                                    ===============   ===============    ================   ===============

NET INCOME ALLOCATION:
     General partners                                  $       101       $        97         $       266       $       334
     Limited partners                                        9,984             9,582              26,295            33,003
                                                    ---------------   ---------------    ----------------   ---------------

     TOTAL                                             $    10,085       $     9,679         $    26,561       $    33,337
                                                    ===============   ===============    ================   ===============

See notes to consolidated financial statements.



                                                              2




                                              SELKIRK COGEN PARTNERS, L.P.
                                          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,
                                                                  2001           2000            2001           2000
                                                              -------------- --------------  -------------- --------------

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                   $   10,085     $    9,679      $   26,561     $   33,337
    Adjustments to reconcile net income to net cash
      provided by operating activities:
      Cumulative effect of a change in accounting principle             519            ---             519        (7,866)
      Depreciation and amortization                                   3,401          3,394          10,199         10,214
      Loss on disposal of equipment                                      59             15              91             15
      Increase (decrease) in cash resulting from a change
      in:
        Restricted funds                                                558            171           1,450          2,208
        Accounts receivable                                             509            231           2,467        (3,363)
        Due from affiliates                                             528            399           3,763          (507)
        Fuel inventory and supplies                                 (1,194)           (46)         (3,227)             60
        Other current assets                                            330          (219)           (490)          (257)
        Accounts payable                                                870          (264)             821        (1,997)
        Accrued bond interest payable                                 8,141          8,364           8,135          8,361
        Accrued expenses                                              (896)          1,034         (4,469)          3,517
        Due to affiliates                                           (1,331)           (17)             342           204
        Deferred revenue                                              (176)          (177)           (530)          (520)
        Other long-term liabilities                                     730            730             641          2,190
                                                              -------------- --------------  -------------- --------------
                   Net cash provided by operating activities         22,133         23,294          46,273         45,596
                                                              -------------- --------------  -------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Plant and equipment additions                                      (3)           (72)           (919)          (729)
     Proceeds from disposal of plant and equipment                      ---            ---              10            ---
                                                              -------------- --------------  -------------- --------------
                   Net cash used in investing activities                (3)           (72)           (909)          (729)
                                                              -------------- --------------  -------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Restricted funds                                              (21,670)       (22,850)        (21,670)       (22,850)
     Distributions to partners                                      (1,314)            ---        (18,859)       (18,980)
     Repayment of long-term debt                                        ---            ---         (6,010)        (3,021)
                                                              -------------- --------------  -------------- --------------
                   Net cash used in financing activities           (22,984)       (22,850)        (46,539)       (44,851)
                                                              -------------- --------------  -------------- --------------

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                                  (854)            372         (1,175)             16
                                                              -------------- --------------  -------------- --------------

CASH AND CASH EQUIVALENTS,
    BEGINNING OF YEAR                                                 2,866          1,376           3,187          1,732
                                                              -------------- --------------  -------------- --------------

CASH AND CASH EQUIVALENTS,
    END OF YEAR                                               $       2,012     $    1,748      $    2,012     $    1,748
                                                              ============== ==============  ============== ==============

SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid for interest                                  $         ---     $      ---      $   16,543     $   16,859
                                                              ============== ==============  ============== ==============

See notes to consolidated financial statements.


                                                        3`

SELKIRK COGEN PARTNERS, L.P.

                                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                              (unaudited)

Note 1. Basis of Presentation

The accompanying  unaudited  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  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. Certain information and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting   principles  have  been  omitted  pursuant  to  rules  and
regulations   applicable  to  interim  financial  statements.   The  information
furnished in the 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  reclassifications have been
made to the  Consolidated  Balance  Sheet for the year ended  December 31, 2000,
Consolidated  Statement of Operations and  Consolidated  Statement of Cash Flows
for the three and nine  months  ended  September  30,  2000 to conform  with the
current periods basis of presentation.  Operating results for the three and nine
months ended  September 30, 2001 are not  necessarily  indicative of the results
that   may   be   expected    for   the   year   ended    December   31,   2001.


These consolidated  financial  statements should be read in conjunction with the
audited  consolidated  financial  statements included in the  Partnerships
December 31, 2000 Annual Report on Form 10-K.

Note 2. Adoption of New Accounting Pronouncement

The   Partnership   adopted   Statement   of  Financial   Accounting   Standards
(SFAS)  No. 133,  Accounting for Derivative  Instruments and Hedging
Activities,   as  amended  by  SFAS  Nos.   137  and  138   (collectively,   the
Statement),  on January 1, 2001. The Statement  requires the
Partnership to recognize all  derivatives,  as defined in the Statement,  on the
balance sheet at fair value.  Derivatives,  or any portion thereof, that are not
effective  hedges must be adjusted to fair value through income.  If derivatives
are effective hedges, depending on the nature of the hedges, changes in the fair
value of  derivatives  either will offset the change in fair value of the hedged
assets, liabilities, or firm commitments through earnings, or will be recognized
in other comprehensive income until the hedged items are recognized in earnings.
Effective  January 1, 2001,  the  Partnership  recorded on the  balance  sheet a
liability for foreign exchange  contracts.  The Partnership has foreign exchange
swaps  accounted  for as cash flow  hedges that are used to  economically  hedge
foreign  currency risk associated with future  purchases  denominated in foreign
currencies.   Hedge   effectiveness   is  measured  at  least   quarterly.   Any
ineffectiveness  is  recognized  in the income  statement in the period that the
ineffectiveness  occurs. If a derivative instrument that has qualified for hedge
accounting is liquidated or sold prior to maturity, the gain or loss at the time
of  termination  remains in other  comprehensive  income  until the hedged  item
impacts earnings.

4

The transition  adjustment to implement the Statement was a negative  adjustment
of  approximately  $9.0 million to other  comprehensive  income,  a component of
partners  equity and had no affect on net  income on January 1, 2001.  The
ongoing  effects  will  depend  on the  future  market  conditions  and  hedging
activities at the Partnership.

The  Partnerships  net losses on foreign currency  contracts for the three
and nine months ended  September  30, 2001 were  approximately  $0.8 million and
$2.3 million,  respectively.  The Partnership expects that net derivative losses
of approximately $3.5 million,  included in Accumulated other comprehensive loss
as of September 30, 2001,  will be  reclassified  into earnings  within the next
twelve months.

The  schedule  below  summarizes  the  activities  affecting  accumulated  other
comprehensive  loss from  derivative  instruments  for the three and nine months
ended September 30, 2001.

`Three Months     Nine Months
                                                              Ended          Ended
                                                         September 30,    September 30,
                                                               2001          2001
                                                               -----         ----
(in thousands)
Beginning accumulated other comprehensive loss
      at July 1, 2001 and January 1, 2001                  $  (8,554)      $  (8,968)
Net change of current period hedging transactions
       gain (loss)                                            (1,390)         (2,486)
Net reclassification to earnings                                 815           2,325
                                                           ----------      ----------
Ending accumulated other comprehensive loss                $  (9,129)      $  (9,129)
                                                           ==========      ==========`

The Partnership also has certain derivative commodity contracts for the physical
delivery of  commodities  transacted in the normal course of business.  In June,
2001 (as revised in October  2001),  the Financial  Accounting  Standards  Board
(FASB)   approved  an  interpretation   issued  by  the  Derivatives
Implementation  Group  (DIG),   Issue  No.  C-15  that  changes  the
definition  of normal  purchases  and sales for  certain  power  contracts.  The
Partnership  must  implement  this  interpretation  on January  1, 2002,  and is
currently  assessing  the impact of these new rules.  The FASB has also approved
DIG Issue Nos. C-10 and C-16 that disallow normal  purchases and sales treatment
for commodity  contracts  (other than power  contracts) that contain  volumetric
variability  or  optionality.   Certain  of  the  Partnerships  derivative
commodity  contracts  may no  longer  be  exempt  from the  requirements  of the
Statement. Effective July 1, 2001, the Partnership recorded on the balance sheet
a liability  for certain gas  contracts.  The  Partnership  has  determined  the
contracts no longer meet the definition of normal purchases and sales and are no
longer  exempt  from  the  requirements  of the  Statement  as a  result  of the
DIGs  interpretative  guidance under Issue No. C-10. The cumulative effect
of a change in accounting  principle was a loss of  approximately  $0.5 million.
Future changes in the fair value of the contracts will be recorded on the income
statement as an  unrealized  gain or loss.  With respect to Issue No. C-16,  the
Partnership  is  evaluating  the impact of this  implementation  guidance on its
financial statements,  and will implement this guidance, as appropriate,  by the
implementation deadline of April 1, 2002.

5

Note 3. New Accounting Pronouncements

In June 2001,  the FASB issued SFAS No. 141,  entitled,  Business  Combinations.
This standard prohibits the use of the pooling-of-interests method of accounting
for  business  combinations  initiated  after June 30,  2001 and  applies to all
business combinations accounted for under the purchase method that are completed
after June 30, 2001. The Partnership does not expect that implementation of this
standard will have a significant impact on its financial statements.

Also in June 2001,  the FASB issued SFAS No. 142,  entitled,  Goodwill and Other
Intangible Assets.  This standard  eliminates the amortization of goodwill,  and
requires goodwill to be reviewed periodically for impairment. This standard also
requires  the useful  lives of  previously  recognized  intangible  assets to be
reassessed and the remaining  amortization  periods to be adjusted  accordingly.
This standard is effective for fiscal years  beginning  after December 15, 2001,
for   all   goodwill   and   other   intangible   assets   recognized   on   the
Partnerships  balance  sheet at that date,  regardless  of when the assets
were initially  recognized.  The Partnership does not expect that implementation
of this standard will have a significant impact on its financial statements.


In July 2001,  the FASB  issued  SFAS No. 143,  entitled,  Accounting  for Asset
Retirement  Obligations.  This standard is effective for fiscal years  beginning
after June 15, 2002, and provides  accounting  requirements for asset retirement
obligations  associated with tangible long-lived assets. The Partnership has not
yet  determined  the  effects  of  this  standard  on its  financial  reporting.

In October  2001,  the FASB issued SFAS No. 144,  entitled,  Accounting  for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 supercedes  SFAS No.
121,  entitled,  Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived Assets to be Disposed of, but retains its fundamental  provisions for
recognizing and measuring  impairment of long-lived  assets to be held and used.
This  Statement  also requires that all  long-lived  assets to be disposed of by
sale are  carried  at the lower of  carrying  amount or fair  value less cost to
sell, and that depreciation should cease to be recorded on such assets. SFAS No.
144 standardizes the accounting and presentation requirements for all long-lived
assets to be disposed of by sale, superceding previous guidance for discontinued
operations of business  segments.  This  Statement is effective for fiscal years
beginning  after December 15, 2001.  The  Partnership is assessing the impact of
this standard on its financial statements.

6

Note 4. Bankruptcy of Affiliated Company

JMC  Selkirk,   Inc.  is  the  managing  general  partner  of  the  Partnership.
Approximately 90% of the ownership  interest in JMC Selkirk,  Inc. is held by an
indirect subsidiary of the PG&E National Energy Group,  Inc.("NEG").  NEG is
an indirect, wholly-owned subsidiary of PG&E Corporation, the parent company
of Pacific Gas and Electric Company (the "Utility").

On April 6, 2001,  the Utility  filed a voluntary  petition for relief under the
provisions of Chapter 11 of the U.S.  Bankruptcy Code. Pursuant to Chapter 11 of
the U.S.  Bankruptcy  Code,  the  Utility  retains  control of its assets and is
authorized to operate its business as a debtor-in-possession while being subject
to the jurisdiction of the Bankruptcy  Court.  Management  believes that the NEG
and its direct and  indirect  subsidiaries,  as  described  above,  would not be
substantively  consolidated  with  PG&E  Corporation  or the  Utility in any
insolvency or bankruptcy proceeding.

On September 20, 2001, the Utility and PG&E Corporation jointly filed a plan
of  reorganization  that  entails  separating  the  Utility  into four  distinct
businesses.  The plan of reorganization does not directly affect the NEG and its
direct and indirect subsidiaries.

Note 5. Title V Permit

On November 6, 2001, the Partnership received from the New York State Department
of  Environmental  Conservation  (the "DEC") the Facility's final Title V permit
dated  November  2, 2001 (the  "Title V  Permit"),  issued  pursuant to the 1990
amendments  to the Federal  Clean Air Act. The Title V Permit as received by the
Partnership  contains  conditions that are inconsistent  with the  Partnership's
existing  air  permits  and the  laws and  regulations  underlying  the  Title V
program,  are  problematic  for the  Partnership  to comply  with under  certain
operating  circumstances,  and are contrary to the Title V Permits of comparable
facilities in New York. By letter dated November 12, 2001, the  Partnership  has
filed with the DEC a request for an adjudicatory  hearing to address and resolve
the issues presented by the Title V Permit,  and the terms and conditions of the
Title V Permit will be stayed  pending a final DEC  decision  on the appeal.  At
this time it is too early for the  Partnership  to assess the likely  outcome of
the adjudicatory hearing and the impact on the Facility.

7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                
CONDITION AND RESULTS OF OPERATIONSNew Accounting Pronouncements

The Partnership adopted Statement of Financial Accounting Standards ("SFAS") No.
133, Accounting for Derivative Instruments and Hedging Activities, as amended by
SFAS  Nos.  137 and 138,  on  January  1,  2001.  See Note 2 of the Notes to the
Consolidated  Financial  Statements for further  discussion of SFAS No. 133. See
Note 3 of the Notes to the Consolidated Financial Statements for a discussion of
new accounting pronouncements.Results of OperationsThree and Nine Months Ended September 30, 2001 Compared to the Three and
Nine Months Ended September 30, 2000

Net income for the quarter  ended  September  30, 2001 was  approximately  $10.1
million as compared to  approximately  $9.7 million in the prior year.  The $0.4
million  increase  in net  income  is  primarily  due to  higher  gross  profit,
partially  offset  by the  Partnership  recording  a loss in the  quarter  ended
September 30, 2001 of  approximately  $0.5 million,  reflecting  the  cumulative
effect of a change in accounting principle. Net income for the nine months ended
September 30, 2001 was approximately  $26.6 million as compared to approximately
$33.3 million.  The $6.7 million  decrease in net income is primarily due to the
Partnership  recording income in the prior year of  approximately  $7.9 million,
reflecting  the  cumulative   effect  of  a  change  in  accounting   principle.


Effective July 1, 2001, the Partnership determined that certain gas contracts no
longer  meet the  definition  of  normal  purchases  and sales and are no longer
exempt from the requirements of SFAS No. 133. The cumulative  effect of a change
in accounting principle was a loss of approximately $0.5 million. Future changes
in the fair value of the contracts  will be recorded on the income  statement as
an unrealized gain or loss.

Effective January 1, 2000, the Partnership  changed its method of accounting for
major  maintenance  and overhaul costs.  Beginning  January 1, 2000, the cost of
major maintenance and overhauls has been accounted for as incurred.  Previously,
the estimated cost of major  maintenance and overhauls was accrued in advance in
a systematic and rational  manner over the period between major  maintenance and
overhauls.

Total  operating  revenues for the quarter and nine months ended  September  30,
2001 were  approximately  $53.1  million  and  $177.3  million  as  compared  to
approximately $56.8 million and $169.6 million for the corresponding  periods in
the prior year.

8

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

`For the Three Months Ended
                                September 30, 2001                           September 30, 2000
                    ----------------------------------------     ----------------------------------------
                        Dollars   kWh's   Capacity  Dispatch     Dollars    kWh's     Capacity   Dispatch
                        -------   -----   --------  --------     -------    ------    --------   --------
Unit 1                   16.0      158.4    89.84%     99.97%         16.6     153.3     86.89%     97.60%
Unit 2                   36.8      573.1    97.79%    100.00%         38.3     541.7     92.59%    100.00%

                                                   For the Nine Months Ended
                                September 30, 2001                           September 30, 2000
                    ------------------------------------------   -----------------------------------------
                        Dollars   kWh's   Capacity   Dispatch       Dollars   kWh's   Capacity   Dispatch
                        -------   -----   --------   --------       -------   ------  --------   --------
Unit 1                   44.3      346.2    66.15%     70.83%         39.5     442.5     85.11%     94.22%
Unit 2                  115.6    1,483.0    85.35%     89.50%        106.5   1,404.2     80.58%     91.89%`

Unit 1 revenues decreased approximately $0.6 for the quarter ended September 30,
2001 as compared  to the  corresponding  period in the prior year and  increased
approximately  $4.8  million for the nine  months  ended  September  30, 2001 as
compared to the corresponding period in the prior year. During the quarter ended
September  30,  2001,  Unit 1 revenues  from Niagara  Mohawk  Power  Corporation
(Niagara   Mohawk),   PG&E   Energy   Trading   -  Power,   L.P.
(PG&E  Energy  Trading)  and the  New  York  Independent  System
Operator (ISO) were approximately $8.9 million, $0.3 million and
$6.8 million,  respectively  as compared to  approximately  $13.8 million,  $2.8
million and $0.0  million,  respectively,  for the  corresponding  period in the
prior year.  During the nine months ended  September  30, 2001,  Unit 1 revenues
from Niagara Mohawk,  PG&E Energy Trading and the ISO were approximately
$27.8  million,  $3.8  million and $12.7  million,  respectively  as compared to
approximately $32.2 million,  $7.3 million and $0.0 million,  respectively,  for
the corresponding  period in the prior year. The decrease in Unit 1 revenues for
the three months ended  September  30, 2001 was  primarily  due to a decrease in
market energy prices.  The increase in Unit 1 revenues for the nine months ended
September  30,  2001  was  primarily  due to an  increase  in  Monthly  Contract
Payments, partially offset by a decrease in volume of delivered energy resulting
from a seven week  scheduled  maintenance  outage.  During the nine months ended
September  30, 2001 and 2000,  with the  exception of the month of April in each
period, the Partnership  received Monthly Contract Payments from Niagara Mohawk.
Effective with the termination of certain transitional provisions on October 31,
2000, Niagara Mohawk is no longer obligated to purchase energy up to the monthly
contract  quantity  (Contract  Energy)  or capacity  associated with
Contract Energy (Contract Capacity) from the Partnership.

During the quarter and nine months ended September 30, 2001, the Partnership did
not deliver any Contract Energy to Niagara Mohawk.  During the nine months ended
September  30,  2001,  with the  exception  of  January,  March and  April,  the
Partnership  sold all of the energy  produced  by Unit 1 to the ISO.  During the
month of January 2001, the Partnership sold all of the energy produced by Unit 1
to  PG&E  Energy  Trading  and no sales of energy  were made from Unit 1
during  the  months  of March and  April  2001.  During  the nine  months  ended
September 30, 2000,  with the exception of the month of April,  the  Partnership
delivered  Contract  Energy to  Niagara  Mohawk.  During the nine  months  ended
September  30,  2000,  with the  exception of January,  February and March,  the
Partnership  sold all of the energy produced by Unit 1 in excess of the Contract
Energy  (Unit  1  Excess   Energy)  to  PG&E  Energy
Trading.  During the months of January and March 2000, the Partnership  sold the
Unit 1 Excess Energy to both Niagara Mohawk and PG&E  Energy Trading and
during the month of February 2000, the Partnership sold all of the Unit 1 Excess
Energy to Niagara Mohawk.

9

During the nine months ended  September 30, 2001, the  Partnership  did not sell
any Contract Capacity to Niagara Mohawk.  During the nine months ended September
30,  2001,  with the  exception  of  January,  February,  March and  April,  the
Partnership sold all of the capacity associated with Unit 1 to both PG&E
Energy Trading and the ISO.  During the months of January,  February,  March and
April 2001, the Partnership  sold all of the capacity  associated with Unit 1 to
the ISO. During the nine months ended  September 30, 2000, the Partnership  sold
Contract  Capacity to Niagara Mohawk and capacity in excess of Contract Capacity
(Unit  1 Excess  Capacity)  to PG&E  Energy Trading.


Contract  Energy sales to Niagara  Mohawk,  Contract  Capacity  sales to Niagara
Mohawk,  energy sales to the ISO and capacity  sales to the ISO were sold at ISO
market  clearing  prices.  Unit 1 Excess  Energy  sales to  PG&E  Energy
Trading and Niagara Mohawk,  Unit 1 Excess Capacity sales to PG&E Energy
Trading,  and energy and capacity sales to PG&E Energy Trading were sold
at negotiated market prices.  Amortized  deferred revenues of approximately $0.5
million are also  included in revenues  from Niagara  Mohawk for the nine months
ended September 30, 2001 and 2000.

Unit 2 revenues  decreased  approximately  $1.5  million for the  quarter  ended
September 30, 2001 as compared to the corresponding period in the prior year and
increased  approximately  $9.1 million for the nine months ended  September  30,
2001 as  compared  to the  corresponding  period in the prior  year.  During the
quarter  ended  September  30,  2001,  all of  the  Unit 2  revenues  were  from
Consolidated Edison Company of New York, Inc. (Con  Edison).  During
the nine months ended September 30, 2001,  Unit 2 revenues from Con Edison,  the
ISO and unrelated third parties were approximately $114.5 million,  $0.7 million
and $0.4  million,  respectively.  During  the  quarter  and nine  months  ended
September  30,  2000,  all of the Unit 2  revenues  were  from Con  Edison.  The
decrease in Unit 2 revenues for the three months  ended  September  30, 2001 was
primarily  due to a decrease  in the Con  Edison  contract  price for  delivered
energy  resulting from lower index fuel prices,  partially offset by an increase
in volume of delivered energy. The increase in revenues from Unit 2 for the nine
months ended  September  30, 2001 was  primarily  due to the increase in the Con
Edison  contract  price for delivered  energy  resulting  from higher index fuel
prices and the sale of other energy  related  products to the ISO and  unrelated
third parties.

Steam  revenues  for the  quarter and nine months  ended  September  30, 2001 of
approximately  $81.5  thousand and $709.6  thousand were reduced by a reserve of
approximately $510.4 thousand and $670.6 thousand,  respectively. Steam revenues
for the quarter and nine months ended September 30, 2000 of approximately $251.2
thousand  and $1.8  million  were  reduced  by a reserve of  approximately  $1.3
thousand and $47.6  thousand,  respectively.  The  Partnership  charges  General
Electric  a  nominal  price for steam  delivered  in an amount up to the  annual
equivalent of 160,000 lbs/hr (the Discounted Quantity).  The
decrease in steam  revenues for the quarter and nine months ended  September 30,
2001 was primarily due to a decrease in steam sales in excess of the  Discounted
Quantity to General  Electric.  Delivered  steam for the quarter ended September
30, 2001 was approximately 292.6 million pounds or 133,994 lbs/hr as compared to
approximately  382.8  million  pounds or 175,277  lbs/hr  for the  corresponding
period in the prior year.  Delivered  steam for the nine months ended  September
30, 2001 was approximately  1,053.7 million pounds or 160,817 lbs/hr as compared
to approximately  1,350.1 million pounds or 204,568 lbs/hr for the corresponding
period in the prior year.

10

Fuel  revenues  for the quarter and nine months  ended  September  30, 2001 were
approximately  $0.7 million and $17.3 million as compared to approximately  $1.7
million and $21.8 million for the  corresponding  periods in the prior year. Gas
resale revenues for the quarter ended September 30, 2001 were approximately $0.4
million on sales of  approximately  0.1  million  MMBtus  as  compared  to
approximately  $1.1 million on sales of approximately  0.2 million  MMBtus
for the corresponding period in the prior year. Gas resale revenues for the nine
months ended  September  30, 2001 were  approximately  $15.2 million on sales of
approximately 2.8 million MMBtus as compared to approximately $9.2 million
on sales of approximately 2.5 million  MMBtus for the corresponding period
in the prior year.  The decrease in gas resales  revenues for the quarter  ended
September 30, 2001 is primarily due to higher load dispatch of Units 1 and 2 and
lower  natural  gas  prices,  which  resulted  in lower  volumes of natural  gas
becoming  available  for  resale at lower  prices.  The  increase  in gas resale
revenues  during the nine months ended  September  30, 2001 is primarily  due to
higher natural gas resale prices and lower dispatch of Unit 1, which resulted in
higher  volumes of natural gas becoming  available for resale at higher  prices.
The increase in natural gas resale prices during the nine months ended September
30,  2001  generally  resulted  from  higher  market  pricing for gas as well as
increased demand for electric generation.  Gas resales occur during periods when
Units 1 or 2 are not operating at full capacity.  Gas optimization  revenues for
the quarter ended September 30, 2001 were approximately $0.3 million on sales of
approximately 0.1 million MMBtus as compared to approximately $0.6 million
on sales of approximately 0.1 million  MMBtus for the corresponding period
in the prior year. Gas optimization revenues for the nine months ended September
30, 2001 were  approximately  $1.7 million on sales of approximately 0.3 million
MMBtus   as  compared  to   approximately   $10.8   million  on  sales  of
approximately 3.5 million MMBtus for the corresponding period in the prior
year.  Gas  optimizations  occur when the  Partnership  is able to optimize  the
long-term supply and transportation  contracts and lower the cost of natural gas
delivered to the Facility by purchasing  and/or selling natural gas at favorable
prices along the transportation  route. There were no revenues from peak shaving
arrangements  during the quarters  ended  September 30, 2001 and 2000.  Revenues
from peak shaving arrangements for the nine months ended September 30, 2001 were
approximately $0.4 million on sales of 0.0 thousand  MMBtus as compared to
approximately  $1.8 million on sales of approximately  0.2 million  MMBtus
for the corresponding  period in the prior year. Peak shaving arrangements occur
when the  Partnership  enters into contracts with third party  purchasers  which
allow  purchasers  to buy a  specified  portion of the  Partnerships  firm
natural  gas  supply  for  a   specified   number  of  days  during  the  winter
season.

11

Fuel and transmission  costs for the quarter and nine months ended September 30,
2001  were  approximately  $26.5  million  and  $99.4  million  as  compared  to
approximately  $31.7 million and $97.1 million for the corresponding  periods in
the prior  year.  Fuel costs,  excluding  the cost of fuel  associated  with gas
optimizations  and transmission  costs, for the quarter ended September 30, 2001
were  approximately  $23.7  million on  purchases of  approximately  7.1 million
MMBtus  as  compared  to  approximately  $29.2  million  on  purchases  of
approximately 7.1 million MMBtus for the corresponding period in the prior
year. The decrease in the cost of fuel for the quarter ended  September 30, 2001
was  primarily  due to the  lower  price  of gas  under  the  firm  fuel  supply
contracts.   Fuel  costs,  excluding  the  cost  of  fuel  associated  with  gas
optimizations,  the cost of fuel associated with peak shaving arrangements,  and
transmission   costs,  for  the  nine  months  ended  September  30,  2001  were
approximately   $91.2  million  on  purchases  of  approximately   20.9  million
MMBtus  as  compared  to  approximately  $80.8  million  on  purchases  of
approximately  21.3 million  MMBtus  for the  corresponding  period in the
prior year. The increase in the cost of fuel for the nine months ended September
30, 2001 was primarily due to the higher price of gas under the firm fuel supply
contracts.  Fuel costs associated with gas  optimizations  for the quarter ended
September 30, 2001 were approximately $0.3 million on purchases of approximately
0.1  million  MMBtus  as  compared to  approximately  $0.6  million on
purchases of approximately  0.1 million  MMBtus  for the corresponding
period in the prior year. Fuel costs associated with gas  optimizations  for the
nine  months  ended  September  30,  2001 were  approximately  $1.7  million  on
purchases  of  approximately  0.3  million   MMBtus   as  compared  to
approximately   $10.0  million  on  purchases  of   approximately   3.5  million
MMBtus  for the corresponding  period in the prior year. There were no
fuel costs associated with peak shaving  arrangements  during the quarters ended
September  30,  2001  and  2000.   Fuel  costs   associated  with  peak  shaving
arrangements  for the nine months ended  September 30, 2001 were $0.0 million on
purchases  of 0.0  thousand  MMBtus  as  compared  to $0.8  million on
purchases of 0.2 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 quarter ended September
30, 2001 and 2000, fuel costs increased by  approximately  $0.8 million and $0.7
million,  respectively,  as a result of the currency swap agreements. During the
nine  months  ended  September  30,  2001 and  2000,  fuel  costs  increased  by
approximately  $2.3 million and $1.8 million,  respectively,  as a result of the
currency  swap  agreements.  Transmission  costs for the quarter and nine months
ended  September  30, 2001 and 2000,  were  approximately  $2.5 million and $6.5
million as  compared to  approximately  $1.9  million  and $5.5  million for the
corresponding periods in the prior year.

Other operating and  maintenance  expenses for the quarter and nine months ended
September 30, 2001 were approximately $3.7 million and $14.2 million as compared
to approximately $2.9 million and $10.0 million for the corresponding periods in
the prior year. The increases are primarily due to differences in the scheduling
of planned maintenance.

Total other operating  expenses,  excluding  amortization of deferred  financing
charges,   for  the  quarter  and  nine  months  ended  September  30,  2001  of
approximately $1.1 million and $3.4 million were comparable to the corresponding
periods in the prior year.

12

Amortization of deferred financing charges for the quarter and nine months ended
September  30,  2001  of  approximately  $0.3  million  and  $0.8  million  were
comparable to the corresponding  periods in the prior year.  Deferred  financing
charges are amortized using the effective interest method.

Net interest  expense for the quarter and nine months ended  September  30, 2001
were  approximately  $7.8 million and $23.0  million as compared to $8.1 million
and $23.5 million for the corresponding periods in the prior year. The decreases
in net interest  expense are primarily due to lower interest  expense  resulting
from  the  lower  principal  balances  outstanding,  partially  offset  by lower
interest  income  resulting from lower interest  rates.Liquidity and Capital Resources

Net cash provided by operating  activities for the quarter and nine months ended
September 30, 2001 was approximately $22.1 million and $46.3 million as compared
to approximately  $23.3 million and $45.6 million for the corresponding  periods
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 used in  investing  activities  for the quarter  and nine months  ended
September  30,  2001 was  approximately  $3.0  thousand  and $909.0  thousand as
compared  to   approximately   $72.0  thousand  and  $729.0   thousand  for  the
corresponding  periods 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  and nine months  ended
September 30, 2001 was approximately $23.0 million and $46.5 million as compared
to approximately  $22.9 million and $44.9 million for the corresponding  periods
in  the  prior  year.   Pursuant  to  the   Partnerships   Depositary  and
Disbursement  Agreement,  administered  by Bankers Trust Company,  as depositary
agent,  the Partnership is required to maintain  certain  Restricted  Funds. Net
cash flows used in financing  activities during the quarters ended September 30,
2001 and 2000  primarily  represent  deposits  of monies into the  Interest  and
Principal  Funds.  Net cash flows used in financing  activities  during the nine
months ended September 30, 2001 and 2000 primarily  represent deposits of monies
into the  Interest  and  Principal  Funds,  distributions  to  partners  and the
semi-annual payment of principal on long-term debt.

Future operating  results and cash flows from operations are 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.

13

The Partnership believes, based on current conditions and circumstances, it will
have sufficient cash flows from operations to fund existing debt obligations and
operating costs.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  and  whether  Con Edison  were to prevail in its claim to Unit  2s
excess natural gas volumes described in the Partnerships December 31, 2000
Annual Report on Form 10-K.

14

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK

The  Partnership  is exposed to market  risk from  changes  in  interest  rates,
foreign currency exchange rates and energy commodity prices,  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, 2001 would have resulted in a negative impact of
approximately  $37.7  thousand  and  $168.2  thousand,   respectively,   on  the
Partnerships net income.

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 a foreign  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, 2001, the
currency   exchange  rate   differential   resulted  in  a  negative  impact  of
approximately   $0.8   million   and   $2.3   million,   respectively,   on  the
Partnerships net income.Energy Commodity Prices

The  Partnership  seeks to reduce its  exposure to market risk  associated  with
energy  commodities  such as  electric  power and natural gas through the use of
long-term  purchase  and  sale  contracts.   As  part  of  its  fuel  management
activities,  the Partnership also enters into agreements to resell its long-term
natural gas volumes,  when it is feasible to do so, at favorable prices relative
to the cost of contract volumes and the cost of substitute  fuels. To the extent
the Partnership has open positions,  it is exposed to the risk that  fluctuating
market prices may adversely impact its financial results.

15

PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         

(A)        

Exhibits

               
    
Not applicable.

         

(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.

16

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 14, 2001                      /s/ JOHN R. COOPER
                                             -----------------------------------
                                             Name:    John R. Cooper
                                             Title:   Senior Vice President and
                                                      Chief Financial Officer




                                       17`

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 14, 2001                    /s/  JOHN R. COOPER
                                            ------------------------------------
                                            Name:    John R. Cooper
                                            Title:   Senior Vice President and
                                                     and Chief Financial Officer



                                       18`