|UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
|------------------------------------------------------------------------
|FORM 10-Q                                                               
|                                                                        











|Commission
File Number                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                         | Exact name of registrants as specified in their charters,
 State of organization, address of principal executive offices
and registrants' telephone number | IRS Employer
Identification
Number           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                         |                                                                                                                                                            |                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                         |                                                                                                                                                           
|333-52397                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ESI TRACTEBEL ACQUISITION CORP.(a Delaware corporation) | 65-0827005                                                                                                                                                
|333-52397-01                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | NORTHEAST ENERGY, LP(a Delaware limited partnership)    | 65-0811248                                                                                                                                                
|c/o FPL Energy, LLC
700 Universe Boulevard
Juno Beach, Florida 33408
(561) 691-7171                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Indicate by check mark whether the registrants (1) have 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 and (2) have been subject to such filing requirements for the past 90 days.
Yes  [   ]    No  [X]                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934.  (Check one)                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Large accelerated filers [   ]                          | Accelerated filers [   ]                                                                                                                                   | Non-accelerated filers [X]                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                         |                                                                                                                                                            | (Do not check if a smaller reporting company)
|Indicate by check mark whether the registrants are shell companies as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Yes  [   ]    No  [X]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|APPLICABLE ONLY TO CORPORATE ISSUERS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|As of October 31, 2008, there were issued and outstanding 20 shares of ESI Tractebel Acquisition Corp.'s common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                         |                                                                                                                                                           
|This combined Form 10-Q represents separate filings by ESI Tractebel Acquisition Corp. (Acquisition Corp.) and Northeast Energy, LP (NE LP). Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes representations only as to itself and makes no representations whatsoever as to the other registrant. The registrants make no representations whatsoever as to ESI Tractebel Funding Corp. (Funding Corp.), and Acquisition Corp. makes no representations whatsoever as to Northeast Energy Associates, a limited partnership (NEA) or North Jersey Energy Associates, a limited partnership (NJEA, and collectively with NEA the Partnerships).

|FORWARD-LOOKING STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions, future events or performance, climate change strategy or growth strategies (often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "aim," "believe," "could," "estimated," "may," "plan," "potential," "projection," "target," "outlook," "predict," "intend") are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could have a significant impact on the Acquisition Corp.'s and/or NE LP's (together, the registrants) operations and financial results, and could cause Acquisition Corp.'s and/or NE LP's actual results to differ materially from those contained in forward-looking statements made by or on behalf of either of the registrants in this combined Form 10-Q, in presentations, or in response to questions or otherwise.
|·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|These and other risk factors are included in Part I, Item 1A. Risk Factors of the registrants' Annual Report on Form 10-K for the year ended December 31, 2007 (2007 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Any forward-looking statement speaks only as of the date on which such statement is made, and the registrants undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made. New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



|PART I - FINANCIAL INFORMATION
|------------------------------
|Item 1. Financial Statements  



|NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
|------------------------------------------------------------------------------------------------------------------------------



|                                       |                                                                                                    | September 30,
2008            |         |         | December 31,
2007 |  
|-------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------- | ------- | ------- | ----------------- | -
|                                       |                                                                                                    |                               |         |         |                   |  
|ASSETS                                 |                                                                                                    |                               |         |         |                   |  
|Current assets:                        |                                                                                                    |                               |         |         |                   |  
|                                       | Cash and cash equivalents                                                                          |                               | $       | 123,418 |                   |  
|                                       | Accounts receivable                                                                                |                               |         | 71,724  |                   |  
|                                       | Spare parts inventories                                                                            |                               |         | 5,777   |                   |  
|                                       | Fuel inventories                                                                                   |                               |         | 11,608  |                   |  
|                                       | Prepaid expenses and other current assets                                                          |                               |         | 2,813   |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total current assets          |         |         | 215,340           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Non-current assets:                    |                                                                                                    |                               |         |         |                   |  
|                                       | Deferred debt issuance costs (net of accumulated amortization of $6,090 and $5,781, respectively)  |                               |         | 869     |                   |  
|                                       | Land                                                                                               |                               |         | 4,712   |                   |  
|                                       | Cogeneration facilities (net of accumulated depreciation of $196,464 and $180,912, respectively)   |                               |         | 325,051 |                   |  
|                                       | Power purchase agreements (net of accumulated amortization of $676,609 and $614,636, respectively) |                               |         | 264,747 |                   |  
|                                       | Other assets                                                                                       |                               |         | 3,568   |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total non-current assets      |         |         | 598,947           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|TOTAL ASSETS                           |                                                                                                    | $                             | 814,287 |         |                   | $
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|LIABILITIES AND PARTNERS' EQUITY       |                                                                                                    |                               |         |         |                   |  
|Current liabilities:                   |                                                                                                    |                               |         |         |                   |  
|                                       | Current portion of notes payable - the Funding Corp.                                               |                               | $       | 53,208  |                   |  
|                                       | Current portion of note payable - the Acquisition Corp.                                            |                               |         | 24,200  |                   |  
|                                       | Current portion of note payable - affiliate                                                        |                               |         | 3,811   |                   |  
|                                       | Accrued interest payable                                                                           |                               |         | 6,587   |                   |  
|                                       | Accounts payable                                                                                   |                               |         | 5,916   |                   |  
|                                       | Due to related parties                                                                             |                               |         | 14,102  |                   |  
|                                       | Other accrued expenses                                                                             |                               |         | 17,469  |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total current liabilities     |         |         | 125,293           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Non-current liabilities:               |                                                                                                    |                               |         |         |                   |  
|                                       | Deferred revenue                                                                                   |                               |         | 62,805  |                   |  
|                                       | Notes payable - the Funding Corp.                                                                  |                               |         | 92,531  |                   |  
|                                       | Note payable - the Acquisition Corp.                                                               |                               |         | 114,400 |                   |  
|                                       | Note payable - affiliate                                                                           |                               |         | 8,617   |                   |  
|                                       | Other liabilities                                                                                  |                               |         | 151     |                   |  
|                                       | Lease payable                                                                                      |                               |         | 320     |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total non-current liabilities |         |         | 278,824           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|COMMITMENTS AND CONTINGENCIES          |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Partners' equity:                      |                                                                                                    |                               |         |         |                   |  
|                                       | General partners                                                                                   |                               |         | 8,204   |                   |  
|                                       | Limited partners                                                                                   |                               |         | 401,966 |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total partners' equity        |         |         | 410,170           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|TOTAL LIABILITIES AND PARTNERS' EQUITY |                                                                                                    | $                             | 814,287 |         |                   | $
|                                       |                                                                                                    |                               |         |         |                   |  



|This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2007 Form 10-K for NE LP and Subsidiaries.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------



|                        |                                     | Three Months Ended
September 30, |         |        | Nine Months Ended
September 30, |  
|----------------------- | ----------------------------------- | -------------------------------- | ------- | ------ | ------------------------------- | -
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     | 2008                             |         |        | 2007                            |  
|                        |                                     |                                  |         |        |                                 |  
|REVENUES                |                                     | $                                | 119,595 |        |                                 | $
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|COSTS AND EXPENSES:     |                                     |                                  |         |        |                                 |  
|                        | Fuel (net of fuel sales)            |                                  |         | 37,305 |                                 |  
|                        | Operations and maintenance          |                                  |         | 3,282  |                                 |  
|                        | Depreciation and amortization       |                                  |         | 26,402 |                                 |  
|                        | General and administrative          |                                  |         | 2,399  |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     | Total costs and expenses         |         |        | 69,388                          |  
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|OPERATING INCOME        |                                     |                                  | 50,207  |        |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|OTHER EXPENSE (INCOME): |                                     |                                  |         |        |                                 |  
|                        | Amortization of debt issuance costs |                                  |         | 104    |                                 |  
|                        | Interest expense                    |                                  |         | 6,588  |                                 |  
|                        | Interest income                     |                                  |         | (379   | )                               |  
|                        | Loss on disposal of assets          |                                  |         | -      |                                 |  
|                        | Other, net                          |                                  |         | -      |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     | Total other expense - net        |         |        | 6,313                           |  
|                        |                                     |                                  |         |        |                                 |  
|                        |                                     |                                  |         |        |                                 |  
|NET INCOME              |                                     | $                                | 43,894  |        |                                 | $
|                        |                                     |                                  |         |        |                                 |  





|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
|----------------------------------------------------------------------------------



|                                                  |                                                  |                                       |  |  |  |  |  |  |  | Nine Months Ended
September 30, |        
|------------------------------------------------- | ------------------------------------------------ | ------------------------------------- |  |  |  |  |  |  |  | ------------------------------- | -------
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 | 2008   
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|NET CASH PROVIDED BY OPERATING ACTIVITIES         |                                                  |                                       |  |  |  |  |  |  |  | $                               | 212,079
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Capital expenditures                             |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  | Net cash used in investing activities |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Principal payments on the Funding Corp. notes    |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Principal payments on the Acquisition Corp. note |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Principal payments on the affiliate note         |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Distributions to partners                        |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  | Net cash used in financing activities |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|Net increase in cash and cash equivalents         |                                                  |                                       |  |  |  |  |  |  |  |                                 | 78,161 
|Cash and cash equivalents at beginning of period  |                                                  |                                       |  |  |  |  |  |  |  |                                 | 45,257 
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|Cash and cash equivalents at end of period        |                                                  |                                       |  |  |  |  |  |  |  | $                               | 123,418
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Cash paid for interest                           |                                       |  |  |  |  |  |  |  |                                 | $      
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:   |                                                  |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Additions to cogeneration facilities             |                                       |  |  |  |  |  |  |  |                                 | $      
|                                                  |                                                  |                                       |  |  |  |  |  |  |  |                                 |        



|This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2007 Form 10-K for NE LP and Subsidiaries.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
CONDENSED COMBINED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                       |                                                                                                    | September 30,
2008            |         |         | December 31,
2007 |  
|-------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------- | ------- | ------- | ----------------- | -
|                                       |                                                                                                    |                               |         |         |                   |  
|ASSETS                                 |                                                                                                    |                               |         |         |                   |  
|Current assets:                        |                                                                                                    |                               |         |         |                   |  
|                                       | Cash and cash equivalents                                                                          |                               | $       | 104,499 |                   |  
|                                       | Accounts receivable                                                                                |                               |         | 71,724  |                   |  
|                                       | Spare parts inventories                                                                            |                               |         | 5,777   |                   |  
|                                       | Fuel inventories                                                                                   |                               |         | 11,608  |                   |  
|                                       | Prepaid expenses and other current assets                                                          |                               |         | 2,805   |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total current assets          |         |         | 196,413           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Non-current assets:                    |                                                                                                    |                               |         |         |                   |  
|                                       | Land                                                                                               |                               |         | 4,712   |                   |  
|                                       | Cogeneration facilities (net of accumulated depreciation of $196,464 and $180,912, respectively)   |                               |         | 325,051 |                   |  
|                                       | Power purchase agreements (net of accumulated amortization of $676,609 and $614,636, respectively) |                               |         | 264,747 |                   |  
|                                       | Other assets                                                                                       |                               |         | 3,568   |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total non-current assets      |         |         | 598,078           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|TOTAL ASSETS                           |                                                                                                    | $                             | 794,491 |         |                   | $
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|LIABILITIES AND PARTNERS' EQUITY       |                                                                                                    |                               |         |         |                   |  
|Current liabilities:                   |                                                                                                    |                               |         |         |                   |  
|                                       | Current portion of notes payable - the Funding Corp.                                               |                               | $       | 53,208  |                   |  
|                                       | Accrued interest payable                                                                           |                               |         | 3,560   |                   |  
|                                       | Accounts payable                                                                                   |                               |         | 5,916   |                   |  
|                                       | Due to related parties                                                                             |                               |         | 14,102  |                   |  
|                                       | Other accrued expenses                                                                             |                               |         | 17,469  |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total current liabilities     |         |         | 94,255            |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Non-current liabilities:               |                                                                                                    |                               |         |         |                   |  
|                                       | Deferred revenue                                                                                   |                               |         | 62,805  |                   |  
|                                       | Notes payable - the Funding Corp.                                                                  |                               |         | 92,531  |                   |  
|                                       | Lease payable                                                                                      |                               |         | 320     |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total non-current liabilities |         |         | 155,656           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|COMMITMENTS AND CONTINGENCIES          |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|Partners' equity:                      |                                                                                                    |                               |         |         |                   |  
|                                       | General partners                                                                                   |                               |         | 5,446   |                   |  
|                                       | Limited partners                                                                                   |                               |         | 539,134 |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    | Total partners' equity        |         |         | 544,580           |  
|                                       |                                                                                                    |                               |         |         |                   |  
|                                       |                                                                                                    |                               |         |         |                   |  
|TOTAL LIABILITIES AND PARTNERS' EQUITY |                                                                                                    | $                             | 794,491 |         |                   | $
|                                       |                                                                                                    |                               |         |         |                   |  



|This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2007 Form 10-K for NEA and NJEA.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                        |                               | Three Months Ended
September 30, |         |        | Nine Months Ended
September 30, |  
|----------------------- | ----------------------------- | -------------------------------- | ------- | ------ | ------------------------------- | -
|                        |                               |                                  |         |        |                                 |  
|                        |                               | 2008                             |         |        | 2007                            |  
|                        |                               |                                  |         |        |                                 |  
|REVENUES                |                               | $                                | 119,595 |        |                                 | $
|                        |                               |                                  |         |        |                                 |  
|                        |                               |                                  |         |        |                                 |  
|COSTS AND EXPENSES:     |                               |                                  |         |        |                                 |  
|                        | Fuel (net of fuel sales)      |                                  |         | 37,305 |                                 |  
|                        | Operations and maintenance    |                                  |         | 3,282  |                                 |  
|                        | Depreciation and amortization |                                  |         | 26,402 |                                 |  
|                        | General and administrative    |                                  |         | 2,399  |                                 |  
|                        |                               |                                  |         |        |                                 |  
|                        |                               | Total costs and expenses         |         |        | 69,388                          |  
|                        |                               |                                  |         |        |                                 |  
|                        |                               |                                  |         |        |                                 |  
|OPERATING INCOME        |                               |                                  | 50,207  |        |                                 |  
|                        |                               |                                  |         |        |                                 |  
|                        |                               |                                  |         |        |                                 |  
|OTHER EXPENSE (INCOME): |                               |                                  |         |        |                                 |  
|                        | Interest expense              |                                  |         | 3,559  |                                 |  
|                        | Interest income               |                                  |         | (373   | )                               |  
|                        | Loss on disposal of assets    |                                  |         | -      |                                 |  
|                        | Other, net                    |                                  |         | -      |                                 |  
|                        |                               |                                  |         |        |                                 |  
|                        |                               | Total other expense - net        |         |        | 3,186                           |  
|                        |                               |                                  |         |        |                                 |  
|                        |                               |                                  |         |        |                                 |  
|NET INCOME              |                               | $                                | 47,021  |        |                                 | $
|                        |                               |                                  |         |        |                                 |  





|CONDENSED COMBINED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
|------------------------------------------------------------------------------



|                                                  |                                              |                                       |  |  |  |  |  |  |  | Nine Months Ended
September 30, |        
|------------------------------------------------- | -------------------------------------------- | ------------------------------------- |  |  |  |  |  |  |  | ------------------------------- | -------
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  | 2008                            |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|NET CASH PROVIDED BY OPERATING ACTIVITIES         |                                              |                                       |  |  |  |  |  |  |  | $                               | 218,609
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Capital expenditures                         |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              | Net cash used in investing activities |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Principal payment on the Funding Corp. notes |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Distributions to partners                    |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              | Net cash used in financing activities |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|Net increase in cash and cash equivalents         |                                              |                                       |  |  |  |  |  |  |  |                                 | 59,253 
|Cash and cash equivalents at beginning of period  |                                              |                                       |  |  |  |  |  |  |  |                                 | 45,246 
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|Cash and cash equivalents at end of period        |                                              |                                       |  |  |  |  |  |  |  | $                               | 104,499
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Cash paid for interest                       |                                       |  |  |  |  |  |  |  |                                 | $      
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:   |                                              |                                       |  |  |  |  |  |  |  |                                 |        
|                                                  | Additions to cogeneration facilities         |                                       |  |  |  |  |  |  |  |                                 | $      
|                                                  |                                              |                                       |  |  |  |  |  |  |  |                                 |        



|This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2007 Form 10-K for NEA and NJEA.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ESI TRACTEBEL FUNDING CORP.
CONDENSED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
|---------------------------------------------------------------------------------------



|                                           |                                                                              | September 30,
2008        |         |        | December 31,
2007 |  
|------------------------------------------ | ---------------------------------------------------------------------------- | ------------------------- | ------- | ------ | ----------------- | -
|                                           |                                                                              |                           |         |        |                   |  
|ASSETS                                     |                                                                              |                           |         |        |                   |  
|Current assets:                            |                                                                              |                           |         |        |                   |  
|                                           | Cash                                                                         |                           | $       | 1      |                   |  
|                                           | Current portion of notes receivable from the Partnerships                    |                           |         | 53,208 |                   |  
|                                           | Interest receivable from Partnerships                                        |                           |         | 3,560  |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|                                           |                                                                              | Total current assets      |         |        | 56,769            |  
|                                           |                                                                              |                           |         |        |                   |  
|Notes receivable from the Partnerships     |                                                                              |                           | 92,531  |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|TOTAL ASSETS                               |                                                                              | $                         | 149,300 |        |                   | $
|                                           |                                                                              |                           |         |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                                              |                           |         |        |                   |  
|Current liabilities:                       |                                                                              |                           |         |        |                   |  
|                                           | Current portion of debt securities payable                                   |                           | $       | 53,208 |                   |  
|                                           | Accrued interest payable                                                     |                           |         | 3,560  |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|                                           |                                                                              | Total current liabilities |         |        | 56,768            |  
|                                           |                                                                              |                           |         |        |                   |  
|Debt securities payable                    |                                                                              |                           | 92,531  |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|COMMITMENTS AND CONTINGENCIES              |                                                                              |                           |         |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|Stockholders' equity:                      |                                                                              |                           |         |        |                   |  
|                                           | Common stock, no par value, 10,000 shares authorized, issued and outstanding |                           |         | 1      |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|                                           |                                                                              |                           |         |        |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                              | $                         | 149,300 |        |                   | $
|                                           |                                                                              |                           |         |        |                   |  







|CONDENSED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
(Unaudited)
|---------------------------------------------------------------------



|                            |  | Three Months Ended
September 30, |        |   | Nine Months Ended
September 30, |  
|--------------------------- |  | -------------------------------- | ------ | - | ------------------------------- | -
|                            |  |                                  |        |   |                                 |  
|                            |  | 2008                             |        |   | 2007                            |  
|                            |  |                                  |        |   |                                 |  
|Interest income - affiliate |  | $                                | 3,560  |   |                                 | $
|Interest expense            |  |                                  | (3,560 | ) |                                 |  
|                            |  |                                  |        |   |                                 |  
|                            |  |                                  |        |   |                                 |  
|NET INCOME                  |  | $                                | -      |   |                                 | $
|                            |  |                                  |        |   |                                 |  



|These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2007 Form 10-K for the Funding Corp.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|ESI TRACTEBEL FUNDING CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
|-------------------------------------------------------------------------------------------------



|                                                  |                                                  |                                           |  |  |  |  |  |  |  | Nine Months Ended
September 30, |  
|------------------------------------------------- | ------------------------------------------------ | ----------------------------------------- |  |  |  |  |  |  |  | ------------------------------- | -
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  | 2008                            |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES         |                                                  |                                           |  |  |  |  |  |  |  | $                               | -
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Principal payment received from the Partnerships |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  | Net cash provided by investing activities |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Principal payment on debt                        |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  | Net cash used in financing activities     |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|Net change in cash                                |                                                  |                                           |  |  |  |  |  |  |  |                                 | -
|Cash at beginning of period                       |                                                  |                                           |  |  |  |  |  |  |  |                                 | 1
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|Cash at end of period                             |                                                  |                                           |  |  |  |  |  |  |  | $                               | 1
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                                  |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Cash paid for interest                           |                                           |  |  |  |  |  |  |  |                                 | $



|These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2007 Form 10-K for the Funding Corp.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ESI TRACTEBEL ACQUISITION CORP.
CONDENSED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
|-------------------------------------------------------------------------------------------



|                                           |                                                                                       | September 30,
2008            |         |         | December 31,
2007 |  
|------------------------------------------ | ------------------------------------------------------------------------------------- | ----------------------------- | ------- | ------- | ----------------- | -
|                                           |                                                                                       |                               |         |         |                   |  
|ASSETS                                     |                                                                                       |                               |         |         |                   |  
|Current assets:                            |                                                                                       |                               |         |         |                   |  
|                                           | Current portion of note receivable from NE LP                                         |                               | $       | 24,200  |                   |  
|                                           | Interest receivable from NE LP                                                        |                               |         | 2,768   |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       | Total current assets          |         |         | 26,968            |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|Non-current assets:                        |                                                                                       |                               |         |         |                   |  
|                                           | Due from NE LP                                                                        |                               |         | 152     |                   |  
|                                           | Note receivable from NE LP                                                            |                               |         | 114,400 |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       | Total non-current assets      |         |         | 114,552           |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|TOTAL ASSETS                               |                                                                                       | $                             | 141,520 |         |                   | $
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                                                       |                               |         |         |                   |  
|Current liabilities:                       |                                                                                       |                               |         |         |                   |  
|                                           | Income taxes payable                                                                  |                               | $       | 47      |                   |  
|                                           | Current portion of debt securities payable                                            |                               |         | 24,200  |                   |  
|                                           | Accrued interest payable                                                              |                               |         | 2,768   |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       | Total current liabilities     |         |         | 27,015            |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|Non-current liabilities:                   |                                                                                       |                               |         |         |                   |  
|                                           | Debt securities payable                                                               |                               |         | 114,400 |                   |  
|                                           | Other                                                                                 |                               |         | 19      |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       | Total non-current liabilities |         |         | 114,419           |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|TOTAL LIABILITIES                          |                                                                                       |                               | 141,434 |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|COMMITMENTS AND CONTINGENCIES              |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|Stockholders' equity:                      |                                                                                       |                               |         |         |                   |  
|                                           | Common stock, $.10 par value, 100 shares authorized, 20 shares issued and outstanding |                               |         | -       |                   |  
|                                           | Retained earnings                                                                     |                               |         | 86      |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|                                           |                                                                                       |                               |         |         |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                       | $                             | 141,520 |         |                   | $
|                                           |                                                                                       |                               |         |         |                   |  





|CONDENSED STATEMENTS OF OPERATIONS
(Thousands of Dollars)
(Unaudited)
|---------------------------------------------------------------------



|                            |  | Three Months Ended
September 30, |        |   | Nine Months Ended
September 30, |  
|--------------------------- |  | -------------------------------- | ------ | - | ------------------------------- | -
|                            |  |                                  |        |   |                                 |  
|                            |  | 2008                             |        |   | 2007                            |  
|                            |  |                                  |        |   |                                 |  
|Interest income - affiliate |  | $                                | 2,768  |   |                                 | $
|Interest expense            |  |                                  | (2,766 | ) |                                 |  
|                            |  |                                  |        |   |                                 |  
|Income before income taxes  |  |                                  | 2      |   |                                 |  
|Income tax expense          |  |                                  | (1     | ) |                                 |  
|                            |  |                                  |        |   |                                 |  
|                            |  |                                  |        |   |                                 |  
|NET INCOME                  |  | $                                | 1      |   |                                 | $
|                            |  |                                  |        |   |                                 |  



|These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2007 Form 10-K for the Acquisition Corp.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|ESI TRACTEBEL ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
|-----------------------------------------------------------------------------------------------------



|                                                  |                                       |                                           |  |  |  |  |  |  |  | Nine Months Ended
September 30, |  
|------------------------------------------------- | ------------------------------------- | ----------------------------------------- |  |  |  |  |  |  |  | ------------------------------- | -
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  | 2008                            |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES         |                                       |                                           |  |  |  |  |  |  |  | $                               | -
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:             |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Principal payment received from NE LP |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       | Net cash provided by investing activities |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:             |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Principal payment on debt             |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       | Net cash used in financing activities     |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|Net change in cash                                |                                       |                                           |  |  |  |  |  |  |  |                                 | -
|Cash at beginning of period                       |                                       |                                           |  |  |  |  |  |  |  |                                 | -
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|Cash at end of period                             |                                       |                                           |  |  |  |  |  |  |  | $                               | -
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |                                       |                                           |  |  |  |  |  |  |  |                                 |  
|                                                  | Cash paid for interest                |                                           |  |  |  |  |  |  |  |                                 | $



|These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2007 Form 10-K for the Acquisition Corp.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES
NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND
NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP
ESI TRACTEBEL FUNDING CORP.
ESI TRACTEBEL ACQUISITION CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|The accompanying Condensed Consolidated Financial Statements, Condensed Combined Financial Statements and Condensed Financial Statements should be read in conjunction with the 2007 Form 10-K for the registrants. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. The results of operations for an interim period generally will not give a true indication of results for the year.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.  Combined Statement of Partners' Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Equity balances of the general partner (GP) and limited partner (LP) of Northeast Energy Associates, a limited partnership (NEA) and North Jersey Energy Associates, a limited partnership (NJEA), are comprised of the following:                                                                                                                                                                                                                                                                           



|                             |  | NEA                    |       | NJEA |   | Combined | 
|---------------------------- |  | ---------------------- | ----- | ---- | - | -------- | 
|                             |  |                        |       |      |   |          | 
|                             |  | GP                     |       | LP   |   | Total    | 
|                             |  |                        |       |      |   |          | 
|                             |  | (Thousands of Dollars) |      
|                             |  |                        |       |      |   |          | 
|Balances, December 31, 2007  |  | $                      | 1,968 |      | $ | 194,846  | 
|Balances, September 30, 2008 |  | $                      | 1,648 |      | $ | 163,214  | 



|The Partnerships (NEA and NJEA) paid distributions to Northeast Energy, LP (NE LP) totaling $127.0 million and $122.5 million for the nine months ended September 30, 2008 and 2007, respectively. NE LP made distributions totaling $88.7 million and $73.9 million to its partners for the nine months ended September 30, 2008 and 2007, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.  Accounting for Derivative Instruments and Hedging Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Derivative instruments are recorded on NE LP's and the Partnerships' condensed consolidated and combined balance sheets as either an asset or liability (in prepaid expenses and other current assets, other assets and other accrued expenses) measured at fair value in accordance with Statement of Financial Accounting Standards No. (FAS) 133 "Accounting for Derivative Instruments and Hedging Activities," (as amended). NE LP and the Partnerships use derivative instruments (primarily forward purchases and sales, swaps and options) to manage the commodity price risk inherent in fuel and electricity contracts. In addition NE LP and the Partnerships use derivatives to optimize the value of power generation assets. To a lesser extent NE LP and the Partnerships also engage in limited trading activities to take advantage of expected favorable price movements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|All changes in the derivatives' fair value (unrealized mark-to-market gains and losses) for power purchases and sales are recognized on a net basis in revenues, and fuel purchases and sales are recognized on a net basis in fuel expense unless hedge accounting is applied. While substantially all of NE LP's and the Partnerships' derivative transactions are entered into for the purposes described above, hedge accounting is only applied where specific criteria are met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge at inception and it must be highly effective in offsetting the hedged risk. Additionally, for hedges of commodity price risk, physical delivery for forecasted commodity transactions must be probable. NE LP and the Partnerships believe that where offsetting positions exist at the same location for the same time, the transactions are considered to have been netted and therefore physical delivery has been deemed not to have occurred for financial reporting purposes. Transactions for which physical delivery is deemed not to have occurred are presented on a net basis. Generally, the hedging instrument's effectiveness is assessed utilizing regression analysis at the inception of the hedge and on at least a quarterly basis throughout its life. At September 30, 2008, no cash flow hedges existed at NE LP and the Partnerships. The effective portion of the gain or loss on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income (OCI) and is reclassified into earnings in the period(s) during which the transaction being hedged affects earnings. The ineffective portion of net unrealized gains (losses) on these hedges is reported in earnings in the current period. Settlement gains and losses are included within the line items in the statements of operations to which they relate. There were no net gains/losses on cash flow hedges in comprehensive income for the three and nine months ended September 30, 2008 and 2007. As a result, there were no differences between comprehensive income and net income for the three and nine months ended September 30, 2008 and 2007, respectively.
|Unrealized mark-to-market gains on derivative transactions were $4.3 million and $2.8 million for the quarters ended September 30, 2008 and 2007, respectively, and are included in fuel expense (net of fuel sales) on the condensed consolidated and combined statements of operations. Unrealized mark-to-market losses on derivative transactions were $1.4 million and $1.6 million for the nine months ended September 30, 2008 and 2007, respectively, and are included in fuel expense (net of fuel sales) on the condensed consolidated and combined statements of operations. The current portion of the derivative asset is $1.0 million at September 30, 2008 and is included in the condensed consolidated and combined balance sheets under prepaid expenses and other current assets. There were no non-current derivative assets or derivative liabilities at September 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3.  Fair Value Measurements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Effective January 1, 2008, NE LP and the Partnerships adopted FAS 157, "Fair Value Measurements," which clarifies how to measure fair value and requires expanded fair value measurement disclosures. The standard emphasizes that fair value is a market-based measurement not an entity-specific measurement, and sets out a fair value hierarchy intended to disclose information about the relative reliability of fair value measurements, with the highest priority being quoted prices in active markets for identical assets or liabilities. FAS 157 was effective January 1, 2008 for financial assets and liabilities, and any other fair value measurements made on a recurring basis. The effects of adopting FAS 157 were not material to NE LP and the Partnerships. For all other fair value measurements, FAS 157 will be effective January 1, 2009. NE LP and the Partnerships are continuing to evaluate the impact of FAS 157 as it applies to non-financial assets and liabilities that are not remeasured at fair value on a recurring basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|As of September 30, 2008, NE LP and the Partnerships had cash equivalents with a fair value of $119.8 million and $100.9 million, respectively. The value of these assets is based upon quoted prices in active markets for identical assets. As of September 30, 2008, all other financial assets, liabilities and other fair value measurements made on a recurring basis at NE LP and the Partnerships were deemed to be immaterial.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NE LP and the Partnerships were permitted to adopt FAS 159, "The Fair Value Option for Financial Assets and Financial Liabilities" on January 1, 2008. NE LP and the Partnerships did not elect to account for any existing financial assets or liabilities under FAS 159 at January 1, 2008, but may elect to account for new financial assets and liabilities at fair value in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|4.  Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The long-term contractual obligations of NE LP and the Partnerships at September 30, 2008 are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|NE LP AND THE PARTNERSHIPS
September 30, 2008
(Thousands of Dollars)
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|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      | Total |         | 2008    |   | 2009 - 10 |        | 2011 - 12 |         | Thereafter
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------- | ------- | - | --------- | ------ | --------- | ------- | ----------
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|CONTRACTUAL OBLIGATIONS                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|The Partnerships:                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          | Funding Corp. debt(a)                                                                                                                                                                                                |       | $       | 168,012 |   | $         | 33,019 |           | $       | 134,993   
|                                                                                                                                                                                                                                                                                                                                                          | Operating leases                                                                                                                                                                                                     |       |         | 1,163   |   |           | 77     |           |         | 654       
|                                                                                                                                                                                                                                                                                                                                                          | Other long-term obligations:                                                                                                                                                                                         |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          | Administrative agreement(b)                                                                                                                                                                                          |       |         | 6,150   |   |           | 150    |           |         | 1,200     
|                                                                                                                                                                                                                                                                                                                                                          | O&M agreement(b)                                                                                                                                                                                                     |       |         | 12,375  |   |           | 375    |           |         | 3,000     
|                                                                                                                                                                                                                                                                                                                                                          | Fuel management agreement(b)                                                                                                                                                                                         |       |         | 13,725  |   |           | 225    |           |         | 1,800     
|                                                                                                                                                                                                                                                                                                                                                          | Natural gas, including transportation and storage                                                                                                                                                                    |       |         | 39,578  |   |           | 2,577  |           |         | 20,168    
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|Total Partnerships                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                      |       | 241,003 |         |   | 36,423    |        |           | 161,815 |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|NE LP:                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          | Acquisition Corp. debt(a)                                                                                                                                                                                            |       |         | 165,142 |   |           | 16,537 |           |         | 78,650    
|                                                                                                                                                                                                                                                                                                                                                          | Affiliate debt(a)                                                                                                                                                                                                    |       |         | 14,295  |   |           | 2,383  |           |         | 9,530     
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|Total NE LP                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                      |       | 179,437 |         |   | 18,920    |        |           | 88,180  |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|Total contractual obligations                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                      | $     | 420,440 |         | $ | 55,343    |        | $         | 249,995 |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                      |       |         |         |   |           |        |           |         |           
|(a)                                                                                                                                                                                                                                                                                                                                                       | Includes principal and interest.                                                                                                                                                                                    
|(b)                                                                                                                                                                                                                                                                                                                                                       | Represents the minimum obligation under the terms of the agreement. The minimum obligation is subject to an annual inflation factor adjustment, which is excluded from the minimum obligation included in the table.
|5.  Subsequent Event                                                                                                                                                                                                                                                                                                                                     
|In February 2007, NE LP and the Partnerships filed an insurance claim for costs incurred related to damage to one of NEA's combustion turbines during 2007. In October 2008, a settlement agreement was reached with the insurance companies, net of the Partnerships' deductible, for $1.9 million, of which $1.5 million was received in November 2008.



|Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|This discussion should be read in conjunction with the Notes to Condensed Consolidated Financial Statements, Notes to Condensed Combined Financial Statements and Notes to Condensed Financial Statements contained herein (the Notes) and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2007 Form 10-K for the registrants. The results of operations for an interim period generally will not give a true indication of results for the year. In the following discussion, all comparisons are with the corresponding items in the prior year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|NE LP Consolidated and the Partnerships - NE LP's consolidated net income for the three months ended September 30, 2008 was $43.9 million compared to $29.5 million for the same period in 2007, and the Partnerships' net income for the three months ended September 30, 2008 was $47.0 million compared to $33.1 million for the same period in 2007. Net income increased for the three months ended September 30, 2008 compared to the same period in 2007 primarily due to higher power sales to utilities, net of purchased power, of $12.8 million resulting from favorable pricing of $39.1 million partially offset by decreased generation of power at the Partnerships' facilities during the period of $26.3 million, and lower interest expense of $1.9 million due to lower outstanding debt balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|NE LP's consolidated net income for the nine months ended September 30, 2008 was $108.4 million compared to $75.5 million for the same period in 2007, and the Partnerships' net income for the nine months ended September 30, 2008 was $118.2 million compared to $87.0 million for the same period in 2007. Net income increased for the nine months ended September 30, 2008 compared to the same period in 2007 primarily due to higher power sales to utilities, net of purchased power, of $91.2 million resulting from favorable pricing of $42.2 million and increased generation of power at the Partnerships' facilities during the period of $49.1 million, partially offset by increased fuel expense, net of fuel sales, of $61.1 million due to increased generation of power from the NJEA facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|NE LP's revenues for the three months ended September 30, 2008 and 2007 were comprised of $119.6 million and $106.4 million of power sales to utilities, net of purchased power, respectively. Revenue increased for the three months ended September 30, 2008 compared to the same period in 2007 primarily due to favorable pricing of $39.1 million, partially offset by lower generation of power at the Partnerships' facilities of $26.3 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Fuel expense, net of fuel sales, was $37.3 million for both the three months ended September 30, 2008 and 2007. Decreased generation of power from the NEA and NJEA facilities was offset by increased prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NE LP's revenues for the nine months ended September 30, 2008 and 2007 were comprised of $340.1 million and $249.2 million of power sales to utilities, net of purchased power, respectively. Power sales to utilities reflect energy bank amortization and interest totaling $1.5 million for the nine months ended September 30, 2007. Revenue increased for the nine months ended September 30, 2008 compared to the same period in 2007 primarily due to favorable pricing of $42.2 million and increased generation of power at the Partnerships' facilities of $49.1 million, primarily at the NJEA facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Fuel expense, net of fuel sales, increased for the nine months ended September 30, 2008 by $61.1 million primarily due to $22.6 million resulting from increased generation of power from the NEA and NJEA facilities and $37.3 million due to increased prices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Operations and maintenance expense decreased by $0.6 million for the three months ended September 30, 2008 compared to the same period in 2007 primarily as a result of decreased generation of power at the NEA and NJEA facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Operations and maintenance expense increased by $1.9 million for the nine months ended September 30, 2008 compared to the same period in 2007 primarily as a result of increased generation of power at the NJEA facility and to a scheduled maintenance outage at the NJEA facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Depreciation and amortization expense increased for the three months ended September 30, 2008 compared to the same period in 2007 due primarily to increased amortization of the NEA intangible asset associated with the purchase power agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Depreciation and amortization expense increased for the nine months ended September 30, 2008 compared to the same period in 2007 due primarily to increased depreciation of assets, measured on a unit of measurement basis, mainly resulting from increased generation at the NJEA facility, as well as to increased amortization of the NEA intangible asset associated with the purchase power agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|NE LP and the Partnerships make scheduled interest and principal payments on their outstanding debt. NE LP and the Partnerships are scheduled to make semi-annual principal and interest payments on June 30 and December 30. Interest expense for NE LP decreased for the three and nine months ended September 30, 2008 by $1.9 million and $5.7 million, respectively, due to decreasing principal balances on their outstanding debt. Interest expense for the Partnerships decreased for the three and nine months ended September 30, 2008 by $1.4 million and $4.2 million, respectively, due to decreasing principal balances on their outstanding debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Interest income decreased for the three and nine months ended September 30, 2008 compared to the same periods in 2007 by $0.2 million and $0.6 million, respectively, due primarily to decreased rates of return on cash balances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|In connection with repair work performed on one of NEA's combustion turbines in November 2007, NE LP and the Partnerships recognized a loss on disposal of assets of $2.8 million in 2007. In March 2008 NEA entered into an agreement with a supplier (the Replacement Parts Agreement) where NEA would recover up to $2.1 million of the losses recognized on the disposed assets as credits against the future purchase of replacement turbine parts. In March 2008 NEA placed orders with the supplier for $3.6 million of replacement turbine parts, which utilized all of the credits under the Replacement Parts Agreement, and a $1.8 million recovery under that agreement has been recorded in other income for the nine months ended September 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|In connection with repair work performed on one of NEA's combustion turbines during 2007, NE LP and the Partnerships recognized a net loss on disposal of assets of $0.6 million for the nine months ended September 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|In connection with an inspection of one of NEA's combustion turbines in October 2008, damage was sustained. NEA has filed a warranty claim, and the manufacturer has agreed to cover substantially all related costs. The Partnerships' parts on-hand will be used to replace the damaged parts. In the event the replacement parts cannot be delivered before the spring of 2009, the planned outage of NJEA may be delayed, limiting generation capabilities; however, NJEA will still be able to meet its obligation under the power purchase agreement by purchasing power from the market.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Transcontinental Gas Pipeline Corporation (Transco) filed a new general rate case in August 2006 with the Federal Energy Regulatory Commission (FERC). The rate case proposed rate increases for most services, fueled largely by a proposed increase of approximately $250 million in the cost of service. NEA currently holds 50,508 MMBtu/day of capacity on Transco's system, and the proposed rates would have resulted in an annual increase of approximately $0.7 million in transportation costs for NEA. FPL Energy, LLC (FPL Energy) on behalf of NEA and other plants operated by FPL Energy, filed a protest of the rate increase with the FERC in September 2006. The filed rates went into effect on March 1, 2007. In August 2007, an agreement in principal was reached by the parties whereby the settled rates will result in an annual savings of $0.3 million in transportation costs for NEA from the filed rates, with the difference between any amounts paid on the filed rates and the settled rates through the date of the final settlement to be refunded to NEA. The proposed settlement agreement was submitted to the FERC for review and approval and in March 2008 the FERC accepted the settlement agreement. NEA received a refund of $0.3 million under the settlement in July 2008.
|ESI Tractebel Funding Corp. (the Funding Corp.) and ESI Tractabel Acquisition Corp. (the Acquisition Corp.) - Both the Funding Corp. and the Acquisition Corp. use interest income and principal payments received from the notes receivable from the Partnerships and NE LP, respectively, to make scheduled interest and principal payments on their outstanding debt. Both entities are scheduled to make semi-annual principal and interest payments on June 30 and December 30. Interest expense for both the Funding Corp. and Acquisition Corp. decreased in the three and nine months ended September 30, 2008 as a result of decreasing principal balances on their outstanding debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|NE LP and the Partnerships - The increase in net cash provided by operating activities for NE LP and the Partnerships for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 was primarily due to increased net income for the nine months ended September 30, 2008 and an increase in interest payable, partially offset by less of a decrease in accounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Capital expenditures for NE LP and the Partnerships were $6.5 million and $3.4 million for the nine months ended September 30, 2008 and 2007, respectively. The increase relates to various upgrades of equipment at the two generating facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|NE LP and each of the Partnerships make scheduled interest and principal payments on their outstanding debt. Each is scheduled to make semi-annual principal and interest payments on June 30 and December 30. Under the terms of the Funding Corp. and Acquisition Corp. trust indentures, the December 30, 2006 debt service payments were made on January 2, 2007 and included $19.2 million of accrued interest at December 31, 2006. As a result, principal and interest payments for the nine months ended September 30, 2007 were significantly higher than the nine months ended September 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|The Funding Corp. and the Acquisition Corp. - Both the Funding Corp. and the Acquisition Corp. use interest income and principal payments from the notes receivable from the Partnerships and NE LP, respectively, to make interest and principal payments on their outstanding debt, which payments are scheduled to be made on June 30 and December 30. Under the terms of the trust indentures, the December 30, 2006 debt service payments were made on January 2, 2007 and included $12.1 million and $7.1 million of accrued interest at December 31, 2006 for the Funding Corp. and the Acquisition Corp., respectively. As a result, principal and interest payments for the nine months ended September 30, 2007 were significantly higher than the nine months ended September 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|NE LP's and the Partnership's long-term contractual obligations at September 30, 2008 are shown in Note 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Market Risk Sensitivity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Commodity Price Risk - The prices received by the Partnerships for power sales under their long-term contracts do not move precisely in tandem with the prices paid by the Partnerships for natural gas. To manage the price risk associated with purchases of natural gas and purchases of power, the Partnerships may, from time to time, enter into certain transactions either through public exchanges or by means of over-the-counter transactions with specific counterparties. The Partnerships manage their risk associated with purchases of natural gas and power through the use of natural gas and power swap agreements. The swap agreements require the Partnerships to pay a fixed price (absolutely or within a specified range) in return for a variable price on specified notional quantities of natural gas and power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NE LP and the Partnerships use a value-at-risk (VaR) model to measure market risk in their trading and mark-to-market portfolios. The VaR is the estimated nominal loss of market value based on a one-day holding period at a 95% confidence level using historical simulation methodology. As of September 30, 2008 and December 31, 2007, the VaR figures (in thousands) are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



|                                                     |                                                                                                                                                                                                                                                                                             | Trading and Managed Hedges(a) |   | Non-Qualifying Hedges and Hedges in
OCI(b) |   | Total
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | - | ------------------------------------------ | - | -----
|                                                     |                                                                                                                                                                                                                                                                                             |                               |   |                                            |   |      
|December 31, 2007                                    |                                                                                                                                                                                                                                                                                             | $                             | - |                                            | $ | 27   
|September 30, 2008                                   |                                                                                                                                                                                                                                                                                             | $                             | - |                                            | $ | 1    
|Average for the nine months ended September 30, 2008 |                                                                                                                                                                                                                                                                                             | $                             | - |                                            | $ | 26   
|                                                    
|                                                     |                                                                                                                                                                                                                                                                                            
|(a)                                                  | Trading and managed hedges are essentially all changes in the derivatives' fair value for power purchases and sales and trading activities, which are recognized on a net basis in operating revenues and for fuel purchases and sales which are recognized on a net basis in fuel expense.
|(b)                                                  | Non-qualifying hedges are employed to reduce the market risk exposure to physical assets which are not marked to market. The VaR figures for the non-qualifying hedges and hedges in OCI category do not represent the economic exposure to commodity price movements.                     



|Concentration of Credit Risk - At September 30, 2008 and December 31, 2007, a majority of NE LP's and the Partnerships' trade receivables were derived from electricity sales to two utilities under long-term power purchase agreements, NSTAR Electric Company (formerly Boston Edison Company and Commonwealth Electric Company), and Jersey Central Power & Light Company.  If any one or more of these customers' receivable balances should be deemed uncollectible, it could have a material adverse effect on NE LP's and the Partnerships' results of operations and financial condition.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|See Management's Discussion and Analysis of Financial Condition and Results of Operations - Market Risk Sensitivity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Item 4T.  Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
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|PART II - OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|Item 1A.  Risk Factors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|There were no material changes from the risk factors disclosed in the registrants' 2007 Form 10-K, except as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|A substantial portion of the output from the Partnerships' power generation facilities is sold under long-term power purchase agreements to three regulated utilities, two of which are under common control. The limited number of power purchasers creates a concentration of counterparty risk. The remaining output from the power generation facilities is sold, from time to time, in the merchant markets. In addition, it is expected that upon expiration of the power purchase agreements, the residual portion of the electrical output will be sold in the merchant market. Merchant plants sell power based on market conditions at the time of sale. The amount and timing of revenues to be received from the merchant markets in the future is uncertain. Economic downturn could adversely affect energy consumption and could adversely affect the results of operations of the registrants. In December 2003, an amended and restated power purchase agreement between NJEA and a New Jersey utility became effective and in February 2005, amended and restated power purchase agreements between NEA and two Massachusetts utilities became effective. These agreements provide for, among other things, the ability to deliver electricity to these utilities from sources other than the NJEA and NEA facilities.
|The registrants rely on contracts with vendors for the supply of fuel required for the operation of their facilities. If vendors fail to fulfill their contractual obligations, the registrants may need to make arrangements with other suppliers, which could result in higher costs and/or a disruption to their operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|The factors discussed above and in Part 1, Item 1A. Risk Factors in the Acquisition Corp.'s and NE LP's 2007 Form 10-K, as well as other information set forth in this report, which could materially adversely affect the Acquisition Corp.'s and NE LP's business, financial condition and/or future operating results should be carefully considered. The risks described above and in the registrants' 2007 Form 10-K are not the only risks facing the registrants. Additional risks and uncertainties not currently known to the registrants, or that are currently deemed to be immaterial, also may materially adversely affect the registrants' business, financial condition and/or future operating results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Item 6.  Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Exhibit
Number                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
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|3.1(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.1.1(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3.1.2(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3.2(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.2.1(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3.3(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.4(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.5(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.6(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.7(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3.8(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|31(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|31(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|32(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|32(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



|(1) | Incorporated herein by reference from the Registration Statement on Form S-4 filed with the Securities and Exchange Commission by the Funding Corp. on February 9, 1995 (file no. 33-87902).                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Incorporated herein by reference from the Annual Report on Form 10-K filed by the Funding Corp. and the Partnerships on March 27, 1998 (file nos. 33-87902, 33-87902-01 and 33-87902-02).                                
|(3) | Incorporated herein by reference from the Registration Statement on Form S-4 filed with the Securities and Exchange Commission by the Acquisition Corp. and NE LP on May 12, 1998 (file nos. 333-52397 and 333-52397-01).





|SIGNATURES                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.



|                         | NORTHEAST ENERGY, LP
(ESI Northeast Energy GP, Inc. as Administrative General Partner)
  ESI TRACTEBEL ACQUISITION CORP.
(Registrants)                                                               | 
|------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                         |                                                                                                                                                                                                      | 
|Date:  November 12, 2008
|                         |                                                                                                                                                                                                      | 
|                         |                                                                                                                                                                                                      | 
|                         |                                                                                                                                                                                                      | 
|                         | MARK R. SORENSEN                                                                                                                                                                                     | 
|                         |                                                                                                                                                                                                      | 
|                         | Mark R. SorensenVice President and Treasurer of ESI Northeast Energy GP, Inc.
 Treasurer of ESI Tractebel Acquisition Corp.(Principal Financial and Principal Accounting Officer of the Registrants) |