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

UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

FORM 10-Q[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2001Commission File Number 33-83618SELKIRK COGEN PARTNERS, L.P.
       (Exact name of Registrant (Guarantor) as specified in its charter)

Delaware
               
               
               
               
               
               
51-0324332
                 
                 
(State or other jurisdiction of
                 
                 
                 
                 
   
(IRS Employer
                 
                 
incorporation or organization)
                 
                 
                 
                 
Identification No.)

SELKIRK COGEN FUNDING CORPORATION
             (Exact name of Registrant as specified in its charter)

Delaware
               
               
               
               
               
               
51-0354675
                 
                 
(State or other jurisdiction of
                 
                 
                 
                 
   
(IRS Employer
                 
                 
incorporation or organization)
                 
                 
                 
                 
Identification No.)

One Bowdoin Square, Boston, Massachusetts 02114
          (Address of principal executive offices, including zip code)(617)  788-3000
              (Registrant's telephone number, including area code)SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OR 12 (g) OF THE ACT:
                                      None

Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __

TABLE OF CONTENTS

`Page
                                                                         ----
                  PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements (unaudited)

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

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

          Consolidated Statements of Cash Flows for the three and six
          months ended June 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..............................   12

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


                   PART II. OTHER INFORMATION

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

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


                                       i`

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

`(unaudited)
                                                                                  June 30,                December 31,
                                                                                    2001                      2000
                                                                              ------------------         ----------------
 ASSETS

 CURRENT ASSETS:
     Cash and cash equivalents                                                      $     2,866               $    3,187
     Restricted funds                                                                     4,420                    2,988
     Accounts receivable, net of allowance of $196 and $174                              18,139                   20,097
     Due from affiliates                                                                    647                    3,882
     Fuel inventory and supplies                                                          8,726                    6,693
     Other current assets                                                                 1,256                      436
                                                                              ------------------         ----------------
                Total current assets                                                     36,054                   37,283
                                                                              ------------------         ----------------

 PLANT AND EQUIPMENT:
     Plant and equipment, at cost                                                       373,304                  372,443
     Less: Accumulated depreciation                                                      93,344                   87,119
                                                                              ------------------         ----------------
     Plant and equipment, net                                                           279,960                  285,324
                                                                              ------------------         ----------------

 LONG-TERM RESTRICTED FUNDS                                                              25,509                   27,833

 DEFERRED FINANCING CHARGES, net of accumulated
      amortization of $8,349 and $7,789, respectively                                     7,942                    8,502
                                                                              ------------------         ----------------
 TOTAL ASSETS                                                                      $    349,465              $   358,942
                                                                              ==================         ================

 LIABILITIES AND PARTNERS' DEFICITS

 CURRENT LIABILITIES:
     Accounts payable                                                               $       ---                $      49
     Accrued bond interest payable                                                          362                      368
     Accrued expenses                                                                    17,583                   21,156
     Due to affiliates                                                                    2,308                      635
     Current portion of long-term bonds                                                  11,673                   11,062
     Current portion of liability for foreign exchange contracts                          3,035                      ---
                                                                              ------------------         ----------------
                Total current liabilities                                                34,961                   33,270

 LONG-TERM LIABILITIES:
     Deferred revenue                                                                     4,950                    5,304
     Other long-term liabilities                                                          7,161                    7,250
     Long-term bonds -  net of current portion                                          356,143                  362,764
     Liability for foreign exchange contracts - net of current portion                    5,519                      ---
                                                                              ------------------         ----------------
                Total liabilities                                                       408,734                  408,588
                                                                              ------------------         ----------------

 COMMITMENTS AND CONTINGENCIES

 PARTNERS' DEFICITS:
     General partners' deficits                                                           (494)                    (485)
     Limited partners' deficits                                                        (50,221)                 (49,161)
     Accumulated other comprehensive income                                             (8,554)                      ---
                                                                              ------------------         ----------------
                Total partners' deficits                                               (59,269)                 (49,646)
                                                                              ------------------         ----------------
 TOTAL LIABILITIES AND PARTNERS' DEFICITS                                          $    349,465              $   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 Six Months Ended
                                                        --------------------------------     ------------------------------

                                                           June 30,         June 30,           June 30,         June 30,
                                                             2001             2000               2001             2000
                                                        ---------------   --------------     --------------   -------------
OPERATING REVENUES:
     Electric and steam                                     $   45,927       $   44,659         $  107,511       $  92,740
     Fuel revenues                                              11,750            7,611             16,639          20,115
                                                                                             --------------   -------------
                                                        ---------------   --------------
              Total operating revenues                          57,677           52,270            124,150         112,855
                                                        ---------------   --------------     --------------   -------------

COST OF REVENUES:
     Fuel and transmission costs                                32,401           31,121             72,855          65,399
     Other operating and maintenance                             7,165            3,674             10,505           7,052
     Depreciation                                                3,124            3,149              6,238           6,258
                                                        ---------------   --------------     --------------   -------------
              Total cost of revenues                            42,690           37,944             89,598          78,709
                                                        ---------------   --------------     --------------   -------------
GROSS PROFIT                                                    14,987           14,326             34,552          34,146
                                                        ---------------   --------------     --------------   -------------

OTHER OPERATING EXPENSES:
     Administrative services, affiliates                           539              666                970           1,353
     Other general and administrative                              709              668              1,314           1,042
     Amortization of deferred financing charges                    280              286                560             571
                                                        ---------------   --------------     --------------   -------------
              Total other operating expenses                     1,528            1,620              2,844           2,966
                                                        ---------------   --------------     --------------   -------------

OPERATING INCOME                                                13,459           12,706             31,708          31,180
                                                        ---------------   --------------     --------------   -------------

INTEREST (INCOME) EXPENSE:
     Interest income                                             (667)            (840)            (1,305)         (1,468)
     Interest expense                                            8,266            8,427             16,537          16,856
                                                        ---------------   --------------     --------------   -------------
              Total interest expense, net                        7,599            7,587             15,232          15,388
                                                        ---------------   --------------     --------------   -------------

Income before cumulative effect of a change
     in accounting principle                                     5,860            5,119             16,476          15,792

Cumulative effect of a change in
     accounting principle                                          ---              ---                ---           7,866
                                                                                             --------------   -------------
                                                        ---------------   --------------
NET INCOME                                                   $   5,860        $   5,119         $   16,476       $  23,658
                                                        ===============   ==============     ==============   =============

NET INCOME ALLOCATION:

     General partners                                         $     59         $     51           $    165    $        237
     Limited partners                                            5,801            5,068             16,311          23,421
                                                        --------------    --------------     --------------   -------------
     TOTAL                                                   $   5,860        $   5,119      $      16,476    $     23,658
                                                        ===============   ==============     ==============   =============

See notes to consolidated financial statements.

                                                               2`

SELKIRK COGEN PARTNERS, L.P.
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (in Thousands)

`For the Three Months Ended     For the Six Months Ended
                                                                 -----------------------------   -------------------------

                                                                   June 30,        June 30,       June 30,      June 30,
                                                                     2001            2000           2001          2000
                                                                 -------------    ------------   -----------   -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                      $  5,860         $ 5,119       $16,476      $ 23,658
     Adjustments to reconcile net income to net cash
        provided by operating activities:
        Cumulative effect of a change in accounting principle             ---             ---           ---       (7,866)
        Depreciation and amortization                                   3,404           3,426         6,798         6,820
        Loss on sale of equipment                                          32             ---            32           ---
        Increase (decrease) in cash resulting from a change
        in:
            Restricted funds                                            3,353           2,836           892         2,037
            Accounts receivable                                           922           1,691         1,958       (3,594)
            Due from affiliates                                         1,660           (784)         3,235         (906)
            Fuel inventory and supplies                               (1,860)            (48)       (2,033)           106
            Other current assets                                        (911)              20         (820)          (38)
            Accounts payable                                            (137)             216          (49)       (1,733)
            Accrued bond interest payable                             (8,277)         (8,431)           (6)           (3)
            Accrued expenses                                            (984)           (102)       (3,573)         2,483
            Due to affiliates                                           1,645           (192)         1,673          221
            Deferred revenue                                            (177)           (167)         (354)         (343)
            Other long-term liabilities                                   731             730          (89)         1,460
                                                                 -------------    ------------   -----------   -----------
                   Net cash provided by operating activities            5,261           4,314        24,140        22,302
                                                                 -------------    ------------   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Plant and equipment additions                                      (650)           (282)         (916)         (657)
     Proceeds from disposal of plant and equipment                         10             ---            10           ---
                                                                 -------------    ------------   -----------   -----------
                   Net cash used in investing activities                (640)           (282)         (906)         (657)
                                                                 -------------    ------------   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Restricted funds                                                  20,103          18,151           ---           ---
     Distributions to partners                                       (17,545)        (18,980)      (17,545)      (18,980)
     Repayment of long-term debt                                      (6,010)         (3,021)       (6,010)       (3,021)
                                                                 -------------    ------------   -----------   -----------
                   Net cash used in financing activities              (3,452)         (3,850)      (23,555)      (22,001)
                                                                 -------------    ------------   -----------   -----------

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                                    1,169             182         (321)         (356)
                                                                 -------------    ------------   -----------   -----------

CASH AND CASH EQUIVALENTS,
    BEGINNING OF YEAR                                                   1,697           1,194         3,187         1,732
                                                                 -------------    ------------   -----------   -----------

CASH AND CASH EQUIVALENTS,
    END OF YEAR                                                  $      2,866        $  1,376       $ 2,866       $ 1,376
                                                                 =============    ============   ===========   ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
      Cash paid for interest                                     $     16,543        $ 16,859       $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  Statement of Operations  for the three and six months
ended  June  30,  2000 to  conform  with  the  current  periods  basis  of
presentation. Operating results for the three and six months ended June 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,  on  January  1, 2001.  This
standard  requires the Partnership to recognize all  derivatives,  as defined in
the Statement,  on the balance sheet at fair value. Under the standard there are
three types of hedges: fair value hedges, cash flow hedges, and foreign currency
hedges.  A fair value  hedge is a hedge of the  exposure  to changes in the fair
value of a recognized asset or liability or of an unrecognized  firm commitment,
that is  attributable  to its fixed terms.  If the  derivative  qualifies and is
designated as a fair value hedge,  the  accounting  treatment  dictates that the
changes in the fair value of the hedging  instrument  will be offset against the
changes in fair value of the hedged  assets,  liabilities,  or firm  commitments
attributable to the hedged risk and reflected in the  consolidated  statement of
operations in the current  period.  A cash flow hedge is a hedge of the exposure
to  variability  in the  cash  flows  associated  with  a  recognized  asset  or
liability,  or a  forecasted  transaction  that is  attributable  to  changes in
variable  rates or prices.  If the  derivative  qualifies and is designated as a
cash flow hedge, the accounting  treatment  dictates that the effective portions
of the changes in the fair value of that  derivative will be recognized in other
comprehensive  income, a separate component of partners  equity during the
hedge period, and will subsequently be recognized in the consolidated  statement
of operations when the hedged item affects earnings.

4

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.

The  transition  adjustment  to  implement  this  new  standard  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.

Below is a table  summarizing the quantitative  information  associated with the
cash flow hedges  associated with foreign  currency  contracts for the three and
six months ended June 30, 2001.

`Three Months Ended       Six Months Ended
                                                                        June 30, 2001          June 30, 2001
                                                                        -------------          -------------
(in thousands)
Net gain (loss) recognized in earnings                                       ---                    ---
Amount of the hedge's ineffectiveness                                        ---                    ---
Component of the derivative instrument's gain or loss
    excluded from assessment of hedge's ineffectiveness                      ---                    ---
Net loss to be reclassified into earnings within 12 months                $ (3,035)              $ (3,035)
Net gain (loss) reclassified into earnings
    because the original transaction will not occur                          ---                    ---`

The  schedule  below  summarizes  the  activities  affecting  accumulated  other
comprehensive  income from  derivative  instruments for the three and six months
ended June 30, 2001.

`Three Months Ended    Six Months Ended
                                                                              June 30, 2001       June 30, 2001
                                                                              -------------       -------------
(in thousands)
Beginning accumulated derivative loss                                              $  (10,042)
    from SFAS133 transition adjustments at January 1, 2001                                 ---          $  (8,968)
     Net change of current period hedging transactions gain (loss)                         731             (1,097)
     Net reclassification to earnings                                                      757               1,511
                                                                           -------------------  -----------  -----
Ending accumulated other comprehensive income(loss)                                $   (8,554)          $  (8,554)
                                                                                   ===========          ==========
                                       5`

The Partnership has certain derivative commodity contracts with optionality that
result in the  physical  delivery of  commodities  used in the normal  course of
business.  On  June  29,  2001,  the  Derivatives  Implementation  Group  of the
Financial  Accounting  Standards  Board   (FASB,   collectively  the
DIG)  reached  final  conclusions  that  modified the  definition of
normal purchases and sales. As such, certain derivative  commodity contracts may
no longer be exempt from the  requirements  of SFAS No. 133. The  Partnership is
currently evaluating the impact of the implementation  guidance on the financial
statements.  Under  the  implementation  guidance  the  effects  of  the  recent
conclusions of the DIG will be recorded on July 1, 2001.

Note 3.   New Accounting Pronouncements

In June 2001,  the FASB issued SFAS No. 141,  entitled,  Business  Combinations.
This standard prohibits the use of 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.


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").

6

On April 6, 2001,  the Utility  filed a voluntary  petition for relief under the
provision  of  Chapter  11 of the U.S.  Bankruptcy  Code in the U.S.  Bankruptcy
Court.  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.

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 Six Months Ended June 30, 2001 Compared to the Three and Six Months
Ended June 30, 2000

Net income for the quarter ended June 30, 2001 was approximately $6.3 million as
compared  to  approximately  $5.1  million in the prior year.  The $1.2  million
increase in net income is primarily due to higher operating  revenues  partially
offset by higher maintenance expenses.  Net income for the six months ended June
30, 2001 was  approximately  $16.9  million as compared to  approximately  $23.7
million.  The $6.8  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 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 six months ended June 30, 2001 were
approximately  $57.7  million and $124.1  million as  compared to  approximately
$52.3  million  and $112.9  million for the  corresponding  periods in the prior
year.Electric Revenues (dollars and kWh's in millions):

`For the Three Months Ended
                                       June 30, 2001                             June 30, 2000
                        ------------------------------------    -----------------------------------------
                        Dollars   kWh's   Capacity  Dispatch     Dollars    kWh's     Capacity   Dispatch
                        -------   -----   --------  --------     -------    ------    --------   --------
Unit 1                   10.4       84.8    48.60%     51.51%      10.4     137.7      79.15%     89.79%
Unit 2                   35.7      391.1    67.59%     73.26%      33.8     390.3      67.44%     80.63%`

8

`For the Six Months Ended
                                   June 30, 2001                                       June 30, 2000
                        -------------------------------------       -------------------------------------
                        Dollars   kWh's   Capacity   Dispatch       Dollars   kWh's   Capacity   Dispatch
                        -------   -----   --------   --------       -------   ------  --------   --------
Unit 1                   28.3      187.8    54.12%     56.03%         22.9     289.2     84.21%   92.51%
Unit 2                   78.7      909.8    79.04%     84.16%         68.2     862.5     74.51%   87.80%`

Unit 1 revenues  for the  quarter  ended June 30,  2001 were  comparable  to the
corresponding period in the prior year and increased  approximately $5.4 million
for the six months ended June 30, 2001 as compared to the  corresponding  period
in the prior year. During the quarter ended June 30, 2001, 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 $6.6 million, $0.2 million
and $3.6 million,  respectively as compared to approximately $7.1 million,  $3.3
million and $0.0  million,  respectively,  for the  corresponding  period in the
prior year.  During the six months  ended June 30, 2001,  revenues  from Niagara
Mohawk,  PG&E Energy Trading and the ISO were  approximately  $19.0 million,
$3.5 million and $5.8 million,  respectively as compared to approximately  $18.4
million,  $4.5 million and $0.0  million,  respectively,  for the  corresponding
period in the prior year.  The  increase  in Unit 1 revenues  for the six months
ended June 30, 2001 was primarily due to increases in Monthly Contract  Payments
and market energy prices,  partially offset by a decrease in volume of delivered
energy resulting from a seven week scheduled  maintenance outage. During the six
months ended June 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 six months ended June 30, 2001, the  Partnership  did not
deliver any Contract Energy to Niagara Mohawk. During the month of January 2001,
the  Partnership  sold all of the energy  produced by Unit 1 to PG&E  Energy
Trading.  During the months of February, May and June 2001, the Partnership sold
all of the energy  produced  by Unit 1 to the ISO.  No sales of energy were made
from Unit 1 during  the  months of March and April  2001.  During the six months
ended June 30, 2000,  with the exception of the month of April,  the Partnership
delivered  Contract Energy to Niagara  Mohawk.  During the six months ended June
30, 2000,  with the exception of February and April,  the  Partnership  sold the
energy produced by Unit 1 in excess of the Contract Energy  (Unit 1 Excess
Energy)  to both Niagara Mohawk and PG&E  Energy  Trading.  During the
month of  February  2000 all of the Unit 1  Excess  Energy  was sold to  Niagara
Mohawk.  During the month of April 2000 all of the Unit 1 Excess Energy was sold
to PG&E Energy Trading.

During the six months  ended June 30,  2001,  the  Partnership  did not sell any
Contract  Capacity to Niagara  Mohawk.  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 months of May and June 2001 the  Partnership  sold
all of the capacity  associated  with Unit 1 to both PG&E Energy Trading and
the ISO. During the six months ended June 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.

9

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 were sold at  negotiated  market
prices.  Amortized  deferred  revenues of  approximately  $0.4  million are also
included in revenues from Niagara  Mohawk for the six months ended June 30, 2001
and 2000.

Unit 2 revenues  increased  approximately $2.0 million and $10.5 million for the
quarter   ended  and  six  months  ended  June  30,  2001  as  compared  to  the
corresponding periods in the prior year. During the quarter ended June 30, 2001,
revenues  from  Consolidated   Edison  Company  of  New  York,  Inc.  (Con
Edison),  the ISO and  unrelated  third parties were  approximately  $34.6
million,  $0.7  million and $0.4  million,  respectively.  During the six months
ended June 30,  2001,  revenues  from Con Edison,  the ISO and  unrelated  third
parties  were  approximately  $77.6  million,  $0.7  million  and $0.4  million,
respectively.  During the quarter and six months ended June 30, 2000, all of the
Unit 2 revenues  were from Con Edison.  The increase in revenues from Unit 2 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  six  months  ended  June  30,  2001  of
approximately  $0 and $0.6 million  were  reduced by a reserve of  approximately
$160 thousand. Steam revenues for the quarter and six months ended June 30, 2000
of  approximately  $0.4  million and $1.6  million  were reduced by a reserve of
approximately $46.3 thousand. 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 six months ended June 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 June 30, 2001 was  approximately  328.2
million  pounds or 150,267  lbs/hr as compared to  approximately  411.4  million
pounds or  188,393  lbs/hr  for the  corresponding  period  in the  prior  year.
Delivered steam for the six months ended June 30, 2001 was  approximately  761.0
million  pounds or 174,229  lbs/hr as compared to  approximately  967.3  million
pounds or  219,055  lbs/hr  for the  corresponding  period  in the  prior  year.

10

Fuel  revenues  for  the  quarter  and six  months  ended  June  30,  2001  were
approximately  $11.8 million and $16.6 million as compared to approximately $7.6
million and $20.1 million for the  corresponding  periods in the prior year. Gas
resale  revenues for the quarter  ended June 30, 2001 were  approximately  $11.3
million on sales of  approximately  2.0  million  MMBtus  as  compared  to
approximately  $5.7 million on sales of approximately  1.5 million  MMBtus
for the corresponding  period in the prior year. Gas resale revenues for the six
months  ended  June  30,  2001  were  approximately  $14.8  million  on sales of
approximately 2.6 million MMBtus as compared to approximately $8.0 million
on sales of approximately 2.2 million  MMBtus for the corresponding period
in the prior year.  The increase in gas resale  revenues  during the quarter and
six months  ended June 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 quarter and six months ended June 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 June
30, 2001 were  approximately  $0.5 million on sales of approximately 0.1 million
MMBtus as compared to approximately $1.9 million on sales of approximately
0.6 million  MMBtus  for the  corresponding  period in the prior year. Gas
optimization  revenues for the six months ended June 30, 2001 were approximately
$1.4 million on sales of approximately  0.2 million  MMBtus as compared to
approximately  $10.3 million on sales of approximately 3.4 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 June 30, 2001 and 2000.  Revenues  from peak shaving
arrangements  for the six months  ended June 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.

Fuel and  transmission  costs for the quarter and six months ended June 30, 2001
were approximately  $32.0 million and $72.4 million as compared to approximately
$31.1 million and $65.4 million for the corresponding periods in the prior year.
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  quarter  ended  June 30,  2001  were  approximately  $29.4  million  on
purchases of approximately 6.8 million MMBtus as compared to approximately
$27.0 million on purchases of  approximately  7.1 million  MMBtus  for the
corresponding  period in the prior year. 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 six months ended June 30, 2001
were  approximately  $67.0  million on purchases of  approximately  13.8 million
MMBtus  as  compared  to  approximately  $51.6  million  on  purchases  of
approximately  14.2 million  MMBtus  for the  corresponding  period in the
prior  year.  The  increase  in the cost of fuel for the  quarter and six months
ended June 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 June 30, 2001 were  approximately  $0.4  million on  purchases of
approximately 0.1 million MMBtus as compared to approximately $1.9 million
on purchases of approximately  0.6 million  MMBtus  for the  corresponding
period in the prior year. Fuel costs associated with gas  optimizations  for the
six months ended June 30, 2001 were  approximately  $1.3 million on purchases of
approximately 0.2 million MMBtus as compared to approximately $9.4 million
on purchases of approximately  3.4 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  June 30,  2001 and 2000.  Fuel costs
associated with peak shaving arrangements for the six months ended June 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 June 30,
2001 and 2000, fuel costs were increased by approximately  $0.7 million and $0.6
million,  respectively,  as a result of the currency swap agreements. During the
six  months  ended  June  30,  2001 and  2000,  fuel  costs  were  increased  by
approximately  $1.5 million and $1.2 million,  respectively,  as a result of the
currency swap agreements. Transmission costs for the quarter and six month ended
June 30, 2001 and 2000,  were  approximately  $2.2  million and $4.1  million as
compared to  approximately  $2.2 million and $3.6 million for the  corresponding
periods in the prior year.

11

Other  operating and  maintenance  expenses for the quarter and six months ended
June 30, 2001 were  approximately  $7.2 million and $10.5 million as compared to
approximately $3.7 million and $7.0 million for the corresponding periods in the
prior year.  The increase is primarily due to  differences  in the scheduling of
planned maintenance.

Total other operating  expenses,  excluding  amortization of deferred  financing
charges,  for the  quarter and six months  ended June 30, 2001 of  approximately
$1.3 million and $2.3 million were  comparable to the  corresponding  periods in
the prior year.

Amortization of deferred  financing charges for the quarter and six months ended
June 30, 2001 of approximately  $0.3 million and $0.6 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 six months  ended June 30, 2001 of
approximately   $7.6  million  and  $15.2   million  were   comparable   to  the
corresponding periods in the prior year.Liquidity and Capital Resources

Net cash provided by operating  activities  for the quarter and six months ended
June 30, 2001 was  approximately  $5.3 million and $24.1  million as compared to
approximately  $4.3 million and $22.3 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 six months ended June
30,  2001 was  approximately  $0.6  million  and $0.9  million  as  compared  to
approximately $0.3 million and $0.7 million for the corresponding periods in the
prior year. Net cash used in investing activities primarily represents additions
to plant and equipment.

12

Net cash used in financing  activities for the quarter and six months ended June
30,  2001 was  approximately  $3.5  million  and $23.6  million as  compared  to
approximately  $3.9 million and $22.0 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 quarter and six months ended June 30,
2001 and 2000 primarily represent  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.

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.

13

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
six months  ended June 30,  2001 would  have  resulted  in a negative  impact of
approximately   $66.7  thousand  and  130.5   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 six  months  ended  June 30,  2001,  the
currency   exchange  rate   differential   resulted  in  a  negative  impact  of
approximately   $0.7   million   and   $1.5   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.

14

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.

15

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: August 8, 2001                       /s/ JOHN R. COOPER
                                           ------------------------------------
                                           Name:    John R. Cooper
                                           Title:   Senior Vice President and
                                                    Chief Financial Officer










                                       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 FUNDING
                                            CORPORATION

Date:  August 8, 2001                     /s/  JOHN R. COOPER
                                          -----------------------------------
                                          Name:    John R. Cooper
                                          Title:   Senior Vice President and
                                                   and Chief Financial Officer











                                       17`