SECURITIES AND EXCHANGE COMMISSION
                                  WASHINGTON, D.C. 20549

                                    FORM 10-K

                               CURRENT REPORT
          [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THEE
                         SECURITIES EXCHANGE ACT OF 1934

               For the Fiscal Year Ended December 31, 2002

                         Commission File Number 33-82034INDIANTOWN COGENERATION, L.P.
            (Exact name of co-registrant as specified in its charter)

Delaware
               
               
               
               
52-1722490
                 
         
 (State or other jurisdiction of
                 
         
(I.R.S. Employer Identification Number)
                 
         
incorporation or organization)

INDIANTOWN COGENERATION FUNDING CORPORATION
            (Exact name of co-registrant as specified in its charter)

Delaware
               
               
               
               
52-1889595
                 
         
 (State or other jurisdiction of
                 
         
(I.R.S. Employer Identification Number)
                 
         
incorporation or organization)

7600 Wisconsin Avenue(Mailing Address: 7500 Old Georgetown Road, 13th FloorBethesda, Maryland 20814-6161)
              (Registrants' Address of principal executive offices)(301)-718-6800
              (Registrants' telephone number, including area code)

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

Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of
Regulation S-K is not contained herein,  and will not be contained,  to the best
of registrants  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2) [ ] Yes [ X ] No

As of March 31,  2003,  there  were 100  shares of  common  stock of  Indiantown
Cogeneration Funding Corporation, $1 par value outstanding.

`Indiantown Cogeneration, L.P.
                   Indiantown Cogeneration Funding Corporation
                                Table of Contents

                                    PART I                                    Page Number
                                    ------                                    -----------
Item 1         Business.......................................................    1
Item 2         Properties.....................................................    7
Item 3         Legal Proceedings..............................................    7
Item 4         Submission of Matters to a Vote
               of Security Holders............................................    8

                                    PART II
                                    -------

Item 5         Market for the Registrant's Common Equity
               and Related Security Holder Matters............................    9

Item 6         Selected Financial Data........................................    9
Item 7         Management's Discussion and Analysis of
               Financial Condition and Results of Operations..................   10

Item 7A        Quantitative and Qualitative Disclosures About
               Market Risk....................................................   21

Item 8         Financial Statements and Supplementary Data...................    22
Item 9         Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure........................    43

                                    PART III
                                    --------
Item 10       Directors and Executive Officers...............................    44
Item 11       Remuneration of Directors and Officers.........................    45
Item 12       Security Ownership of Certain Beneficial Owners
              and Management.................................................    45

Item 13       Certain Relationships and Related Transactions.................    46
Item 14       Controls and Procedures........................................    46

                                    PART IV
                                    -------
Item 15       Exhibits, Financial Statement Schedules and
              Reports on Form 8-K............................................    47

              Signatures and Certifications..................................    51`

Item 1    BUSINESSThe Partnership

          

     Indiantown  Cogeneration,  L.P. (the  "Partnership")  is a special  purpose
Delaware  limited  partnership  formed on October 4, 1991. The  Partnership  was
formed to develop,  construct,  own and operate an  approximately  330  megawatt
(net) pulverized coal-fired cogeneration facility (the "Facility") located on an
approximately 240 acre site in southwestern Martin County, Florida. The Facility
produces  electricity for sale to Florida Power &  Light Company ("FPL") and
supplies steam to Louis Dreyfus Citrus, Inc. ("LDC"), formerly known as Caulkins
Indiantown Citrus Company.

          

     The  original  general  partners  were  Toyan  Enterprises   ("Toyan"),   a
California corporation and a wholly owned special purpose indirect subsidiary of
PG&E National  Energy Group,  Inc.  ("NEG,  Inc."),  and Palm Power  Corporation
("Palm"),  a Delaware  corporation and a special purpose indirect  subsidiary of
Bechtel Enterprises, Inc. ("Bechtel Enterprises").  The sole limited partner was
TIFD III-Y,  Inc.  ("TIFD"),  a special purpose  indirect  subsidiary of General
Electric Capital Corporation  ("GECC").  During 1994, the Partnership formed its
sole, wholly owned subsidiary, Indiantown Cogeneration Funding Corporation ("ICL
Funding"),  to  act as  agent  for,  and  co-issuer  with,  the  Partnership  in
accordance  with the 1994 bond offering of $505,000,000 of First Mortgage Bonds.
ICL Funding has no separate operations and has only $100 in assets.

          

     In 1998, Toyan  consummated  transactions  with DCC Project Finance Twelve,
Inc.  ("PFT"),  whereby  PFT,  through  a new  partnership  (Indiantown  Project
Investment,  L.P.  ("IPILP")  with Toyan,  became a new  general  partner in the
Partnership.  Toyan is the  sole  general  partner  of  IPILP.  Prior to the PFT
transaction,  Toyan  converted some of its general  partnership  interest into a
limited  partnership  interest such that Toyan now directly holds only a limited
partnership  interest  in  the  Partnership.  In  addition,  Bechtel  Generating
Company, Inc. ("Bechtel Generating"),  sold all of the stock of Palm to a wholly
owned indirect subsidiary of Cogentrix Energy, Inc. ("Cogentrix").  Palm holds a
10% general partner interest in the Partnership.

          

     On June 4, 1999,  Thaleia,  LLC ("Thaleia"),  a wholly-owned  subsidiary of
Palm and indirect  wholly-owned  subsidiary of  Cogentrix,  acquired from TIFD a
19.9%  limited  partner  interest in the  Partnership.  On  September  20, 1999,
Thaleia acquired another 20.0% limited partnership interest from TIFD and TIFD's
membership  on the Board of Control.  On November  24, 1999,  Thaleia  purchased
TIFD's remaining limited partner interest in the Partnership from TIFD.

          

     The net profits and losses of the Partnership are allocated to Toyan, Palm,
IPILP  and  Thaleia  (collectively,  the  "Partners")  based  on  the  following
ownership percentages:

`Toyan              30.05%
                             Palm              10.00%
                            IPILP              19.95%
                           Thaleia             40.00%`

1
The   changes   in    ownership    were   the   subject   of   notices   of
self-recertification of Qualifying Facility status filed by the Partnership with
the Federal Energy Regulatory  Commission on August 21, 1998, November 16, 1998,
June 4, 1999, September 21, 1999, and November 24, 1999.

          

     All distributions  other than liquidating  distributions will be made based
on the Partners'  percentage  interest as shown above,  in  accordance  with the
project  documents and at such times and in such amounts as the Board of Control
of the Partnership determines.

          

     The  Partnership  is managed by  PG&E  National  Energy  Group  Company
("NEG"), formerly known as PG&E Generating Company, pursuant to a Management
Services  Agreement (the "MSA").  The Facility is operated by PG&E Operating
Services Company  ("PG&E OSC"),  formerly known as U.S.  Operating  Services
Company,   pursuant  to  an  Operation  and  Maintenance   Agreement  (the  "O&M
Agreement").  NEG and PG&E OSC are general  partnerships  indirectly  wholly
owned by NEG, Inc., an indirect wholly owned subsidiary of PG&E Corporation.
Refer to Note 7 in the attached Notes to the Financial Statements for discussion
of contractual terms.

          

     The Partnership began  construction of the Facility in October 1992 and was
in the development phase through the commencement of commercial  operation.  The
Facility commenced  commercial operation under its power purchase agreement (the
"Power Purchase Agreement" or "PPA") with FPL on December 22, 1995. The Facility
synchronized  with the FPL system on June 30, 1995 and the  Partnership  sold to
FPL  electricity  produced  by the  Facility  during  startup and  testing.  The
Partnership's continued existence is dependent on the ability of the Partnership
to maintain successful  commercial operation under the Power Purchase Agreement.
Management  of  the  Partnership  is of  the  opinion  that  the  assets  of the
Partnership are realizable at their current  carrying value. The Partnership has
no assets other than the Facility, the Facility site,  contractual  arrangements
relating to the Facility (the "Project Contracts") and the stock of ICL Funding.Relationship with PG&E Corporation and NEG, Inc.

     In December 2000, and in January and February  2001,  PG&E  Corporation
and NEG, Inc. completed a corporate restructuring of NEG, Inc. that involved the
use or creation of limited liability  companies ("LLCs") as intermediate  owners
between a parent  company  and its  subsidiaries.  One of these LLCs is PG&E
National Energy Group, LLC, which owns 100% of the stock of NEG, Inc.

          

     On April 6, 2001, Pacific Gas and Electric Company (the "Utility"), another
subsidiary of PG&E Corporation,  filed a voluntary petition for relief under
the provisions of Chapter 11 of the U.S. Bankruptcy Code. Pursuant to Chapter 11
of the U.S.  Bankruptcy  Code, the Utility  retains control of its assets and is
authorized to operate its business as a debtor-in-possession while being subject
to  the  jurisdiction  of  the  Bankruptcy   Court.  The  Utility  and  PG&E
Corporation  jointly filed a plan of reorganization  that entails separating the
Utility into four distinct businesses.  The proposed plan of reorganization does
not directly affect NEG, Inc. or any of its subsidiaries.  NEG Inc.'s management
believes  that NEG, Inc. and its direct and indirect  subsidiaries  as described
above, including the Partnership,  would not be substantively  consolidated with
PG&E  Corporation  in any  insolvency  or  bankruptcy  proceeding  involving
PG&E Corporation or the Utility.
2
As result of the sustained  downturn in the power  industry,  NEG, Inc. and
certain of its  consolidated  affiliates have  experienced a financial  downturn
which caused the major credit rating agencies to downgrade NEG, Inc. and certain
of its consolidated  affiliates'  credit ratings to below investment  grade. The
credit  rating  agency  action  has  had no  material  impact  on the  financial
condition or results of operations of the Partnership.

          

     On October 8, 2002,  Moody's stated that in conjunction  with the downgrade
of NEG,  Inc. it had placed the  Partnership's  debt under  review for  possible
downgrade.  On October 15,  2002,  S&P stated that the recent  downgrade of NEG,
Inc.  would not have an effect on the rating of the  Partnership's  debt at this
time.  S&P's rating of the  Partnership's  debt is "BBB-".  On November 5, 2002,
Moody's   issued  an  opinion   update   changing  the  rating  outlook  of  the
Partnership's  debt to "under  review for  possible  downgrade"  from  "negative
outlook".  Moody's rating of the  Partnership's  debt is "Baa3". On December 12,
2002,  Fitch Ratings removed the "Rating Watch Negative" from it's "BBB-" rating
on the  Partnership's  debt for the  satisfactory  completion  of the  permanent
generator  repairs during the 2002  scheduled fall outage.  There are no minimum
credit rating requirements in the Partnership's financing agreements.

          

     NEG, Inc. and certain affiliates,  excluding Toyan and IPILP, are currently
in default under various debt agreements and guaranteed equity commitments. NEG,
Inc.,  its  subsidiaries  and  their  lenders  are  engaged  in  discussions  to
restructure  NEG,  Inc.'s  debt  obligations  and such  other  commitments.  The
Partnership  is not a party  to  such  debt  agreements  and  guaranteed  equity
commitments or participants in such discussions.  NEG, Inc. and its subsidiaries
are continuing to review  opportunities  to abandon,  sell, or transfer  certain
assets,  and have  significantly  reduced their energy trading  operations in an
ongoing effort to raise cash and reduce debt,  whether through  negotiation with
lenders or otherwise.

          

     If  the  lenders  exercise  their  default  remedies  or if  the  financial
commitments are not restructured,  NEG, Inc. and the affected  affiliates may be
compelled to seek protection under or be forced into a proceeding under the U.S.
Bankruptcy Code.

          

     NEG, Inc.  owns an indirect  interest in the  Partnership,  and through its
wholly owned subsidiaries NEG and PG&EOSC  manages and operates the Project.
The  Partnership  cannot be certain that an insolvency  or bankruptcy  involving
NEG,  Inc.  or any of its  subsidiaries  would not affect  NEG Inc.'s  ownership
arrangement  with  respect  to  the  Partnership  or  the  ability  of  NEG  and
PG&EOSC to manage and operate the Project.Certain Project Contracts

        

        Power Purchase Agreement

          

     The Facility  supplies (i) electric  generating  capacity and energy to FPL
pursuant to the Power  Purchase  Agreement  and (ii) steam to LDC  pursuant to a
long-term energy services agreement (the "Energy Services Agreement").

          

     Payments  from  FPL  pursuant  to the  Power  Purchase  Agreement  provided
approximately  99.7%, 99.8% and 99.9% of Partnership revenues for 2002, 2001 and
2000,  respectively.  Under  and  subject  to the  terms of the  Power  Purchase
Agreement,  FPL is  obligated  to purchase  electric  generating  capacity  made
available to it and  associated  energy from the Facility  through  December 22,
2025.
3
Payments by FPL consist of capacity  payments and energy  payments.  FPL is
required to make  capacity  payments to the  Partnership  on a monthly basis for
electric  generating  capacity made available to FPL during the preceding  month
regardless of the amount of electric  energy actually  purchased.  This basis is
known as the Capacity Billing Factor, which measures the overall availability of
the  Facility,  but gives a  heavier  weighting  to  on-peak  availability.  The
capacity  payments have two components,  an un-escalated  fixed capacity payment
and an escalated  fixed operation and  maintenance  payment,  which together are
expected  by the  Partnership  to cover all of the  Partnership's  fixed  costs,
including debt service. Energy payments are made only for the amount of electric
energy  actually  delivered to FPL. The energy payments to be made by FPL in the
next year are not expected to be sufficient to cover the Partnership's  variable
costs of electric energy  production due to a mismatch of how the index that the
coal cost  component of the energy  payment is determined and the price increase
of base coal in the amended coal  purchase  agreement  (see  below).  The energy
payments will continue to be  insufficient  to cover the variable costs of steam
production for steam supplied to LDC.

          

     These  shortfalls  are not expected by the  Partnership  to have a material
adverse effect on its ability to service its debt and fund operations due to the
level of capacity payments.

      

        Energy Services Agreement

     The Partnership supplies thermal energy to LDC in order for the Facility to
meet the operating and efficiency  standards under the Public Utility Regulatory
Policy  Act  of  1978,  as  amended,  and  the  FERC's  regulations  promulgated
thereunder  (collectively,  "PURPA").  The  Facility  has  been  certified  as a
Qualifying Facility under PURPA. Under PURPA,  Qualifying  Facilities are exempt
from certain  provisions of the Public Utility  Holding  Company Act of 1935, as
amended  ("PUHCA"),  most provisions of the Federal Power Act (the "FPA"),  and,
except under certain limited circumstances,  rate and financial regulation under
state law. The Energy  Services  Agreement with LDC requires LDC to purchase the
lesser of (i) 525 million pounds of steam per year or (ii) the minimum  quantity
of steam  per year  necessary  for the  Facility  to  maintain  its  status as a
Qualifying  Facility under PURPA (currently  estimated by the Partnership not to
exceed 525 million pounds per year).

       

        Coal Purchase and Transportation Agreement

          

     The  Partnership  has  a  coal  purchase   agreement  (the  "Coal  Purchase
Agreement")  with  Lodestar  Energy,  Inc.  ("LEI")  pursuant to which  Lodestar
supplies all of the Facility's  coal needs,  which are estimated to be 1 million
tons of coal per year. The  Partnership  has no obligation to purchase a minimum
quantity of coal under the Coal Purchase Agreement.

          

     During  1997,  coal ash  produced  during  operation  of the  Facility  was
disposed  of  pursuant  to the Coal  Purchase  Agreement  and  back-up  disposal
arrangements with Chambers Waste Systems, Inc. of Florida ("Chambers"). In 1998,
the  Partnership  entered  into  agreements  with  Lodestar  and VFL  Technology
Corporation  ("VFL") for ash disposal at  alternative  sites.  These  agreements
reduced the cost of ash disposal.  The  Partnership  has been informed that LEI,
Chambers, and VFL have obtained the permits necessary to receive such coal ash.
4
On April 27,  2001,  an order for  relief was  entered  in the  Involuntary
Petition under Chapter 11 of the United States  Bankruptcy  Code with respect to
LEI and its parent, Lodestar Holdings Inc. ("LHI"), in the U.S. Bankruptcy Court
in Lexington,  Kentucky.  Since that time, LHI and LEI have been operating their
business as "debtors in possession." On October 3, 2001, LEI filed a motion with
the  Bankruptcy  Court  seeking  to  reject  the Coal  Purchase  Agreement.  The
Partnership and LEI agreed to and executed  Amendment No. 3 to the Coal Purchase
Agreement  effective  October 16, 2001 (the  "Amendment").  The principal change
effected in the Coal  Purchase  Agreement by the  Amendment was an increase from
$26.632  to $34.00  per ton in the base  coal  price  for coal  delivered  after
October 16, 2001, with a 2% additional increase in the base coal price effective
October 16, 2002. The transportation and administrative  fees the Partnership is
required to pay remain unchanged, but will continue to adjust in accordance with
the terms of the Coal Purchase  Agreement.  The Amendment  also includes  market
price reopener provisions, beginning October 16, 2003.

          

     LEI has  failed  to  perform  certain  of its  obligations  under  the Coal
Purchase  Agreement  related to ash  disposal,  and on  January  28,  2003,  the
Partnership  delivered  a notice of an event of default to LEI. In the event the
contract is  terminated as a result of such  default,  by LEI or otherwise,  the
Partnership  has entered into a backup coal supply  agreement  and alternate ash
disposal agreements.

          

     In  December  2002,  an order  by the  U.S.  Bankruptcy  Court  was  issued
authorizing  LEI to sell its property at auction,  which occurred on January 30,
2003.  The Coal  Purchase  and  Transportation  Agreement  was  included  in the
property  auctioned.  A bid was made for the  property,  including the agreement
with the  Partnership.  At a court  hearing to certify the auction,  the highest
bidder rescinded their bid,  claiming  information was withheld during their due
diligence  before the auction.  Since most of the officers and  directors of LEI
resigned prior to the court hearing,  the judge appointed a trustee for Lodestar
who is to advise the court on the next course of action to pursue.

          

     A new Ash Disposal  Agreement  was executed on February 1, 2003 between the
Partnership and VFL Technology  Corp.  ("VFL") and has a term of four years with
an option for an  additional  two years.  The  agreement  calls for the  nominal
removal of 1,000 to 1,500 tons of dry fly ash per week,  which is  approximately
50% of the fly ash produced each week,  and allows for the removal of up to 100%
of the fly ash produced by the Facility.  The disposal fee is $21.85 per ton and
is adjusted  quarterly  beginning on May 1, 2003 in  accordance  with a Producer
Price Index, which includes labor to load trucks,  the transportation  vehicles,
transportation  costs and disposal  fee.  This  agreement,  combined  with other
current ash disposal agreements, allows the Partnership to dispose of all of the
Partnership's ash without relying on Lodestar. The Partnership has satisfied the
applicable  conditions  precedent  set  forth  in  the  Partnership's  financing
documents relating to the entering into of the Ash Disposal Agreement.

          

     The Back-up  Coal  Agreement  was  executed on February 5, 2003 between the
Partnership  and Massey  Coal Sales,  Inc.  ("Massey").  Under the Back-up  Coal
Agreement,  Massey will provide coal under  substantially  similar  terms to the
Coal  Supply  Agreement  should  the Coal  Supply  Agreement  with  Lodestar  be
terminated.  The base coal price is $33.75 per ton and the term can be  extended
through  December 31, 2025.  The agreement  also includes  market price reopener
provisions,  beginning  October 16, 2003.  The  Partnership  has  satisfied  the
applicable  conditions  precedent  set  forth  in  the  Partnership's  financing
documents  relating to the  entering  into of the Back-up  Coal  Agreement.  The
Partnership continues to receive coal shipments from LEI.
5
On  March  20,  2003,  the  Partnership  and the  court  appointed  trustee
negotiated a settlement which effectively terminates the Coal Purchase Agreement
as of March 31, 2003. A motion for an order  approving the  settlement was filed
in the  U.S.  Bankruptcy  Court on  March  21,  2003.  An  order  approving  the
settlement must be entered by the Bankruptcy Court no later than April 15, 2003.
Closing  will  occur  as  reasonably  practicable  after  the  entry of an order
approving  this  settlement,  but in no event  later  than  April 15,  2003.  At
closing,  (i) the  Partnership  will  make a  settlement  payment  to the  court
appointed  trustee,  on behalf of LEI,  in the amount of $1.0  million  and (ii)
general  releases in form and substance  mutually  acceptable shall be exchanged
between the Partnership and Lodestar. Once the order approving the settlement is
entered,  the Back-up Coal Agreement will become effective  retroactively to the
date of termination of the Coal Purchase Agreement  specified in the settlement.
Upon  the  termination  of  the  Coal  Purchase  Agreement,  the  Transportation
Agreement will revert from Lodestar to the Partnership.  This settlement  cannot
become  effective  until  the  applicable  conditions  under  the  Partnership's
financing documents are satisfied.  The Partnership  currently  anticipates that
all applicable  conditions  under such financing  documents will be completed in
the near future.  The  Partnership  will continue to receive coal shipments from
Lodestar for trains loaded through March 31, 2003. The Facility begins a routine
two week scheduled maintenance outage on April 1, 2003.

       

        Lime Purchase Agreement

          

     The Partnership  entered into a lime purchase agreement (the "Lime Purchase
Agreement") with Chemical Lime Company ("Chemlime"),  an Alabama corporation, to
supply the lime  requirements  of the Facility's dry scrubber and sulfur dioxide
removal system. The initial term of the Lime Purchase Agreement is 15 years from
the  commercial  operation  date.  Chemlime is  obligated  to provide all of the
Facility's lime requirements,  but the Partnership has no obligation to purchase
a minimum  quantity of lime.  The price of lime was  renegotiated  in 1999 for a
three-year period beginning  January 1, 2000.  Chemlime notified the Partnership
of its intention to cancel the agreement effective in the first quarter of 2002.
The price was again  renegotiated for a three-year period beginning  February 1,
2002.Competition

          

     Since the Partnership has a long-term contract to sell electric  generating
capacity  and energy from the  Facility  to FPL, it does not expect  competitive
forces to have a significant  effect on its business.  The  Partnership  expects
that the capacity  payments  under the Power Purchase  Agreement,  which are not
affected by the level of FPL's  dispatch of the Facility,  will cover all of the
Partnership's fixed costs, including debt service.
6
Regulations and Environmental Matters

          

     The  Partnership  has  obtained  all  material  environmental  permits  and
approvals  required,  as of December 31, 2002,  in order to continue  commercial
operation of the Facility. Certain of these permits and approvals are subject to
periodic renewal.  Certain  additional permits and approvals will be required in
the future for the continued  operation of the Facility.  The Partnership is not
aware of any  technical  circumstances  that would  prevent the issuance of such
permits  and  approvals  or  the  renewal  of  currently  issued  permits.   The
Partnership  timely  filed its  application  for a Title V air permit on May 24,
1996. The permit was issued on October 11, 1999.

          

     On November 10, 2000 the Partnership submitted to the Florida Department of
Environmental  Protection  ("FDEP") an application for modifications to the Site
Certificate.  The  proposed  modifications  include a requested  increase of the
groundwater  withdrawal,  clarification  of authority to allow  emergency  water
withdrawals,  changes to groundwater  monitoring  requirements and programs, and
changing the address of the Facility. On March 14, 2001 FDEP approved and issued
a final order modifying the Conditions of Certification related to South Florida
Management  District ("SFWMD")  authority to authorize  withdrawals of ground or
surface water and a modification for storage pond elevation changes.  On October
9, 2002 FDEP issued an order  modifying  the  Conditions of  Certification  that
added current regulatory references,  current Best Management Practice Plans and
conformed the conditions to the final  Prevention of  Significant  Deterioration
("PSD") and Title V permits.  This order finalized all  modifications  requested
under the November 10, 2000 application by the Partnership.Employees

          

     The  Partnership  has no  employees  and does  not  anticipate  having  any
employees in the future because, under a management services agreement, NEG acts
as the Partnership's  representative in all aspects of managing the operation of
the Facility as directed by the Partnership's  Board of Control. As noted above,
PG&E  OSC  is  providing   operations  and  maintenance   services  for  the
Partnership.Item 2    PROPERTIES

          

     The Facility is located in a predominantly  industrial area in southwestern
Martin  County,  Florida,  on  approximately  240  acres  of land  owned  by the
Partnership  (the  "Site").  An  additional  five acres of  property is owned in
eastern Okeechobee County,  Florida for a water pumping facility associated with
the make-up water supply  pipeline.  Other than the Facility,  the Site, and the
make-up water pipeline and associated equipment, the Partnership does not own or
lease any material properties.Item 3    LEGAL PROCEEDINGS

          

        None.
7
Item 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          

        No matters were submitted to a vote of the security holders of the Partnership during 2002.
8
PART II
Item 5     MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
         
RELATED SECURITY HOLDER MATTERS

          

     The  Partnership is a Delaware  limited  partnership  wholly owned by Palm,
Toyan,  Thaleia  and IPILP.  Beneficial  interests  in the  Partnership  are not
available to other persons except with the consent of the Partners.

          

     There is no established  public market for ICL Funding's  common stock. The
100 shares of $1 par common stock are owned by the Partnership.  ICL Funding has
not paid, and does not intend to pay, dividends on the common stock.Item 6    SELECTED FINANCIAL DATA

          

     The following  selected  financial data of the Partnership  presented below
are  derived  from the  consolidated  balance  sheet  and  financial  statements
information of the  Partnership as of and for the years ended December 31, 2002,
2001,  2000,  1999, and 1998. The data should be read in conjunction with Item 7
of this report,  "Management's Discussion an Analysis of Financial Condition And
Results  of  Operations",  and with  the  Partnership's  consolidated  financial
statements  appearing  elsewhere in this report.  The financial  statements  and
supplementary data required by this item are presented under Item 8.
2002              2001              2000               1999              1998
                                             ----              ----              ----               ----              ----
Total Assets                             $679,494,383    $675,194,455         $680,669,565      $694,852,029       $708,139,691
Long-Term Debt                            555,918,013     560,702,525          572,521,507       583,994,031        595,835,699
Total Liabilities                         587,232,317     586,320,011          595,689,890       605,686,943        615,827,405
Capital Distributions                               -      12,400,000           25,400,000        25,970,000         35,680,000
Total Partners' Capital                    92,262,066      88,874,444           84,979,675        88,244,550         91,800,530
Property, Plant & Equipment, Net
                                          599,925,139     615,144,286          628,354,758       641,449,055        654,188,458
Operating Revenues                        162,687,035      175,432,091         177,790,391       163,270,119        159,183,399
Net Income                                  3,387,622       16,294,769          22,135,125        22,414,020         21,354,967
9
The  following  is  a  summary  of  the  quarterly  results  of  operations
(unaudited)  for the years ended  December  31, 2002 and 2001.  Refer to Item 1,
Business,  for discussion of NEG, Inc.  liquidity issues and contractual  issues
that may effect future results.
Quarter Ended
                                                                           --------------
                                         March 31         June 30    September 30      December 31         Total
                                         --------         -------    ------------      -----------         -----
                                                                   (in thousands)

2002
----
Operating revenues                        $42,317         $40,006      $40,431            $39,933        $162,687
Gross profit                               17,744          16,402       18,001             14,547          66,694
Net income(loss)                            1,869             468        2,456            (1,405)           3,388


2001
----
Operating revenues                        $46,459         $45,220      $45,972            $37,781        $175,432
Gross profit                               21,549          21,324       22,389             16,399          81,661
Net income                                  4,976           5,101        6,067                151          16,295
Item 7    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         
CONDITION AND RESULTS OF OPERATIONSCautionary Statement Regarding Forward Looking Statements

          

     The information in this Annual Report on Form 10-K includes forward-looking
statements  about the future that are  necessarily  subject to various risks and
uncertainties.  Use of words like "anticipate," "estimate," "intend," "project,"
"plan,"  "expect,"  "will,"  "believe,"  "could," and similar  expressions  help
identify  forward-looking  statements.  These  statements  are based on  current
expectations and assumptions  which the Partnership  believes are reasonable and
on  information  currently  available to the  Partnership.  Actual results could
differ  materially from those  contemplated by the  forward-looking  statements.
Although  the  Partnership  believes  that  the  expectations  reflected  in the
forward-looking  statements are reasonable,  future results,  events,  levels of
activity,  performance  or  achievements  cannot  be  guaranteed.  Although  the
Partnership  is not able to  predict  all the  factors  that may  affect  future
results,  some  of the  factors  that  could  cause  future  results  to  differ
materially  from those  expressed or implied by the  forward-looking  statements
include:

      

        Operational Risks

          

     The Partnership's  future results of operation and financial condition will
be affected by the performance of equipment,  levels of dispatch, the receipt of
certain capacity and other fixed payments,  electricity  prices, fuel deliveries
and  prices  and the  outcome  of the  order to  termination  the Coal  Purchase
Agreement.
10
Actions of Florida Power & Light and Other Counterparties

          

     The Partnership's  future results of operations and financial condition may
be affected by the extent to which counterparties  require additional assurances
in the form of  letters  of credit or cash  collateral  and the  failure  of the
Partnership  to maintain the  qualifying  facility  status,  which could cause a
default under the Power Purchase Agreement.

      

        Accounting and Risk Management

          

     The Partnership's  future results of operation and financial  condition may
be affected by the effect of new accounting pronouncements,  changes in critical
accounting  policies or estimates,  the effectiveness of the Partnership's  risk
management   policies  and   procedures,   the  ability  of  the   Partnership's
counterparties to satisfy their financial commitments to the Partnership and the
impact of counterparties' nonperformance on the Partnership's liquidity position
and  heightened  rating  agency  criteria  and  the  impact  of  changes  in the
Partnership's credit ratings.

      

        Legislative and Regulatory Matters

     The  Partnership's  business may be affected by  legislative  or regulatory
changes  affecting the electric and natural gas industries in the United States,
including the pace and extent of efforts to restructure the electric and natural
gas industries; heightened regulatory and enforcement agency focus on the energy
business  with the  potential  for  changes in industry  regulations  and in the
treatment of the  Partnership by state and federal  agencies;  and changes in or
application  of  federal,  state,  and local laws and  regulations  to which the
Partnership is subject.

      

        Litigation and Environmental Matters

     The Partnership's  future results of operation and financial  condition may
be affected by the effect of compliance  with existing and future  environmental
and  safety  laws,  regulations,  and  policies,  the  cost of  which  could  be
significant,  and the outcome of potential future  litigation and  environmental
matters.Overview

          

     The  Partnership  owns  a  cogeneration  facility  consisting  of a  single
pulverized coal boiler and a single steam turbine  generator.  The Partnership's
overall  business plan is to safely produce clean,  reliable  energy pursuant to
the terms of the Power  Purchase  Agreement and the Energy  Services  Agreement.
Revenues are derived primarily from capacity and bonus payments, measured by the
Capacity  Billing  Factor  ("CBF"),  and sales of  electricity.  The facility is
dispatched for electric energy by FPL on an economic basis.  Each agreement year
the  facility  is  entitled  to four  weeks  of  outages  to  perform  scheduled
maintenance, and each fifth year, a total of ten weeks of outage time to perform
major  maintenance.  Differences  in the timing and scope of scheduled and major
maintenance can have a significant impact on the revenues and operational costs.

       

        Relationship with PG&E Corporation and NEG, Inc.
11
In December 2000, and in January and February  2001,  PG&E  Corporation
and NEG, Inc. completed a corporate restructuring of NEG, Inc. that involved the
use or creation of limited liability  companies ("LLCs") as intermediate  owners
between a parent  company  and its  subsidiaries.  One of these LLCs is PG&E
National Energy Group, LLC, which owns 100% of the stock of NEG, Inc.

          

     On April 6, 2001, Pacific Gas and Electric Company (the "Utility"), another
subsidiary of PG&E Corporation,  filed a voluntary petition for relief under
the provisions of Chapter 11 of the U.S. Bankruptcy Code. Pursuant to Chapter 11
of the U.S.  Bankruptcy  Code, the Utility  retains control of its assets and is
authorized to operate its business as a debtor-in-possession while being subject
to  the  jurisdiction  of  the  Bankruptcy   Court.  The  Utility  and  PG&E
Corporation  jointly filed a plan of reorganization  that entails separating the
Utility into four distinct businesses.  The proposed plan of reorganization does
not directly affect NEG, Inc. or any of its subsidiaries.  NEG Inc.'s management
believes  that NEG, Inc. and its direct and indirect  subsidiaries  as described
above, including the Partnership,  would not be substantively  consolidated with
PG&E  Corporation  in any  insolvency  or  bankruptcy  proceeding  involving
PG&E Corporation or the Utility.

          

     As result of the sustained  downturn in the power  industry,  NEG, Inc. and
certain of its  consolidated  affiliates have  experienced a financial  downturn
which caused the major credit rating agencies to downgrade NEG, Inc. and certain
of its consolidated  affiliates'  credit ratings to below investment  grade. The
credit  rating  agency  action  has  had no  material  impact  on the  financial
condition or results of  operations  of the  Partnership  (see "Credit  Ratings"
below).

          

     NEG, Inc. and certain affiliates,  excluding Toyan and IPILP, are currently
in default under various debt agreements and guaranteed equity commitments. NEG,
Inc.,  its  subsidiaries  and  their  lenders  are  engaged  in  discussions  to
restructure  NEG,  Inc.'s  debt  obligations  and such  other  commitments.  The
Partnership  is not a party  to  such  debt  agreements  and  guaranteed  equity
commitments or participants in such  discussion.  NEG, Inc. and its subsidiaries
are continuing to review  opportunities  to abandon,  sell, or transfer  certain
assets,  and have  significantly  reduced their energy trading  operations in an
ongoing effort to raise cash and reduce debt,  whether through  negotiation with
lenders or otherwise.

          

     If  the  lenders  exercise  their  default  remedies  or if  the  financial
commitments are not restructured,  NEG, Inc. and the affected  affiliates may be
compelled to seek protection under or be forced into a proceeding under the U.S.
Bankruptcy Code.

          

     NEG, Inc.  owns an indirect  interest in the  Partnership,  and through its
wholly owned subsidiaries NEG and PG&EOSC  manages and operates the Project.
The  Partnership  cannot be certain an insolvency or bankruptcy  involving  NEG,
Inc.  or any of its  affiliates  would  not  affect  the  NEG  Inc.'s  ownership
arrangement  with  respect  to  the  Partnership  or  the  ability  of  NEG  and
PG&EOSC to manage and operate the Project.

          

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
results  of  Operations  should be read in  conjunction  with the  Partnership's
consolidated  financial  statements  and  notes  to the  consolidated  financial
statements included herein.
12
Results of Operations

          

     During 2002, the Facility  produced  2,079,781  MW-hr of energy for sale to
FPL compared to 2,276,568  MW-hr in 2001.  This  decrease was due primarily to a
scheduled ten week outage in 2002 as compared to four weeks of scheduled  outage
time in 2001.

          

     The Facility produced approximately 582 million pounds of steam for sale to
LDC in 2002  compared  to  approximately  658  million  pounds  in 2001  thereby
continuing to exceed the minimum  requirements to maintain  Qualifying  Facility
status.

          

     The Facility ended the year with a 365 day rolling average Capacity Billing
Factor  of  89.95%  in 2002 and  97.02% in 2001.  The  Capacity  Billing  Factor
measures the overall availability of the Facility, but gives a heavier weighting
to on-peak  availability.  Cash flows  during 2002 were  sufficient  to fund all
operating expenses and debt repayment obligations.Year ended December 31, 2002 Compared to the Year Ended December 31, 2001

     For the years ended December 31, 2002 and 2001, the  Partnership  had total
operating  revenues of $162.7  million and $175.4  million,  respectively.  This
decrease in 2002 was attributable primarily to decreased energy revenues of $4.0
million and decreased capacity bonus and capacity revenues of $8.6 million.  For
the years ended  December 31, 2002 and 2001,  the  Facility  achieved an average
Capacity  Billing  Factor of 89.39% and 97.02%,  respectively.  This resulted in
earning monthly  capacity  payments  aggregating  $113.4 million for the year in
2002 and $113.2 million for the year in 2001.  Bonuses  aggregated  $0.2 million
for the year in 2002  and $9.0  million  for the  year in  2001.  The  increased
revenues from capacity  payments are due primarily to the quarterly  escalations
on the fixed operating and  maintenance  component of the capacity  charge.  The
decrease  in bonus  revenues  is due to the  decrease  in the  average  Capacity
Billing Factor relating to decreased  availability  due to boiler tube leaks and
the generator  repairs in 2001. The calculation to compute the Capacity  Billing
Factor (which is the rolling  average of the prior 365 days)  throughout  all of
2002 included the 11 days of  unscheduled  outage time in 2001 for the generator
repairs with 0%  availability  for those days. The lower energy revenues are due
primarily to  additional  six weeks of scheduled  outage time in 2002  allowable
under the PPA to perform major  maintenance.  During 2002 and 2001, the Facility
was  dispatched  by FPL and  generated  2,079,781  megawatt-hours  and 2,276,568
megawatt-hours, respectively. The monthly average dispatch rate requested by FPL
was 89.0% and 85.3% for the twelve  months  ended  December  31,  2002 and 2001,
respectively.

          

     Total  operating costs were $106.1 million and $105.4 million for the years
ended December 31, 2002 and 2001, respectively.  This increase was due primarily
to an increase of $3.1 million in operating and  maintenance  costs  relating to
the generator  repairs and auxiliary boiler repairs.  Offsetting the increase in
operating  costs was a decrease in general and  administrative  expenses of $1.3
million  primarily for lower third-party legal costs, a decrease of $0.6 million
for loss on disposal of assets, a decrease in fuel and ash costs of $0.3 million
and a decrease  of $0.2  million in  insurance  and taxes.  For the years  ended
December  31,  2002  and  2001,   the  total  net   non-operating   expense  was
approximately  $53.2 million and $53.8 million,  respectively.  The decrease was
primarily  due to a $1.0  million  reduction  in bond  interest  expense  due to
principal  payments of the Series A-9 First  Mortgage Bonds on June 15, 2002 and
on December 15, 2002,  and a decrease in letter of credit fees of $0.4  million,
offset by a decrease in interest  income of $0.5  million and an increase in the
amortization of deferred financing costs of $0.2 million.
13
Net income was $3.4 million and $16.3  million for the twelve  months ended
December  31,  2002 and 2001,  respectively.  This $12.9  million  decrease  was
primarily  attributable  to a decrease in  revenues of $12.7  million and a $2.2
million  increase  in cost of sales,  offset by a  decrease  in other  operating
expenses of $1.5 million and a decrease in net interest expense of $0.6 million,
as discussed in detail above.

          

     As of December 31, 2002 and 2001, the Partnership had approximately  $599.9
million and $615.1 million,  respectively, of property, plant and equipment, net
of  accumulated  depreciation.   The  property,  plant  and  equipment  consists
primarily of purchased  equipment,  construction  related  labor and  materials,
interest  during  construction,   financing  costs,  and  other  costs  directly
associated with the construction of the Facility. This decrease is due primarily
to depreciation of $15.2 million.Year ended December 31, 2001 Compared to the Year Ended December 31, 2000

          

     For the years ended December 31, 2001 and 2000, the  Partnership  had total
operating  revenues of $175.4  million  and $177.8  million,  respectively.  The
decrease in 2001 was attributable primarily to decreased energy revenues of $0.8
million and  decreased  capacity  bonus and capacity  revenues of $1.8  million,
offset by an increase of $0.2 million of steam revenue  reconciliation  for 2000
recorded in 2001. For the years ending  December 31, 2001 and 2000, the Facility
achieved an average Capacity  Billing Factor of 97.02% and 98.54%  respectively.
This decrease was primarily attributable to decreased availability due to boiler
tube leaks and repairs to the  generator in late 2001.  This resulted in earning
monthly capacity  payments  aggregating  $113.2 million for the year in 2001 and
$112.8  million for the year in 2000.  Bonuses  aggregated  $9.0 million for the
year in 2001 and $11.2 million for the year in 2000. The increased revenues from
capacity are due primarily to the quarterly  escalations on the fixed  operating
and maintenance component of the capacity charge. The decrease in bonus revenues
is due to the  decrease  in the  average  Capacity  Billing  Factor  relating to
decreased  availability due to the repairs  discussed above.  These repairs also
caused the  reduction  in energy  revenue  in 2001.  During  2001 and 2000,  the
Facility  was  dispatched  by FPL and  generated  2,276,568  megawatt-hours  and
2,343,677  megawatt-hours,  respectively.  The  monthly  average  dispatch  rate
requested by FPL was 85.3% and 87.6% for the twelve  months  ended  December 31,
2001 and 2000, respectively.

          

     Total  operating costs were $105.4 million and $102.1 million for the years
ended December 31, 2001 and 2000, respectively.  This increase was due primarily
to an  increase  of  $0.4  million  in fuel  and  ash  costs,  a  result  of the
renegotiated coal cost per ton with Lodestar, and an increase of $2.3 million in
operating and  maintenance  expenses  relating to the generator  repairs and the
replacement  of baghouse bags, an increase for the loss on disposal of assets of
$0.5 million incurred for baghouse  repairs,  and an increase in depreciation of
$0.1  million.  For the years ended  December  31, 2001 and 2000,  the total net
interest   expense  was   approximately   $53.8   million  and  $54.5   million,
respectively. The decrease was primarily due to a $1.2 million reduction in bond
interest  expense due to  installment  payments of the Series A-9 First Mortgage
Bonds on June 15, 2001 and on  December  15,  2001,  and a decrease in letter of
credit fees of $0.1  million,  offset by a decrease  in interest  income of $0.6
million.
14
Net income was $16.3  million and $22.1 million for the twelve months ended
December  31,  2001 and 2000,  respectively.  This  $5.8  million  decrease  was
primarily  attributable  to the $3.3 million  increase in operating  costs,  the
decrease in revenues of $2.4 million,  and the effect of a cumulative  change in
accounting principle for major maintenance of $0.9 million, offset by a decrease
in net interest expense of $0.8 million, as discussed in detail above.

          

     As of December 31, 2001 and 2000, the Partnership had approximately  $615.1
million and $628.4 million,  respectively, of property, plant and equipment, net
of  accumulated  depreciation.   The  property,  plant  and  equipment  consists
primarily of purchased  equipment,  construction  related  labor and  materials,
interest  during  construction,   financing  costs,  and  other  costs  directly
associated with the construction of the Facility. This decrease is due primarily
to   depreciation   of  $15.2  million,   offset  by  $1.9  million  of  capital
improvements.Liquidity and Capital Resources

          

     Net cash  provided by  operating  activities  in 2002 was $17.8  million as
compared to $33.0  million in 2001.  Net cash  provided by operating  activities
primarily represents net income,  adjusted by non-cash expenses and income, plus
the net  effect  of  changes  within  the  Partnership's  operating  assets  and
liability  accounts.  The  decrease  in net  cash  from  operations  in  2002 is
primarily related to the reduction in net income of $12.9 million in 2002.

          

     Net cash used in investing activities in 2002 was $15.9 million as compared
to $9.6 million in 2001. Net cash flows used in investing  activities  represent
net additions to plant and equipment  and increases in  investments  held by the
Trustee.  This increase in investments  held by Trustee is  attributable  to the
Partnership's  requirement to fund certain letter of credit loans,  as discussed
later in this section.

          

     Net cash used in financing  activities in 2002 was $1.9 million as compared
to $23.9  million in 2001.  Net cash flows used in financing  activities in 2002
and  2001  primarily   represent   payments  on  First  Mortgage   Bonds,   cash
distributions  to  Partners  and the  borrowings  under  the  letter  of  credit
agreement.  The decrease in cash used in financing activities is attributable to
the Partnership's  new financing  requirements due to the termination of several
letters of credit, as discussed below.

       

        Credit Ratings

          

     On October 8, 2002,  Moody's stated that in conjunction  with the downgrade
of NEG,  Inc. it had placed the  Partnership's  debt under  review for  possible
downgrade.  On October 15,  2002,  S&P stated that the recent  downgrade of NEG,
Inc.  would not have an effect on the rating of the  Partnership's  debt at this
time.  S&P's rating of the  Partnership's  debt is "BBB-".  On November 5, 2002,
Moody's   issued  an  opinion   update   changing  the  rating  outlook  of  the
Partnership's  debt to "under  review for  possible  downgrade"  from  "negative
outlook".  Moody's rating of the  Partnership's  debt is "Baa3". On December 12,
2002,  Fitch Ratings removed the "Rating Watch Negative" from it's "BBB-" rating
on the  Partnership's  debt for the  satisfactory  completion  of the  permanent
generator  repairs during the 2002  scheduled fall outage.  There are no minimum
credit rating requirements in the Partnership's financing agreements.
15
Bonds

          

     On November 22, 1994, the Partnership and ICL Funding issued first mortgage
bonds in an aggregate  principal  amount of $505  million  (the "First  Mortgage
Bonds").  Of this amount,  $236.6  million of the First  Mortgage  Bonds bear an
average  interest rate of 9.02% and $268.4  million of the First  Mortgage Bonds
bear an interest rate of 9.77%.  Concurrent with the  Partnership's  issuance of
its First Mortgage Bonds,  the Martin County  Industrial  Development  Authority
issued $113 million of Industrial  Development  Refunding  Revenue Bonds (Series
1994A) which bear an interest rate of 7.875% (the "1994A Tax Exempt  Bonds").  A
second series of tax exempt bonds (Series  1994B) in the  approximate  amount of
$12  million,  which bear an interest  rate of 8.05%,  were issued by the Martin
County  Industrial  Development  Authority  on December 20, 1994 (the "1994B Tax
Exempt  Bonds"  and,  together  with the 1994A Tax Exempt  Bonds,  the "1994 Tax
Exempt  Bonds").  The First  Mortgage  Bonds and the 1994 Tax  Exempt  Bonds are
hereinafter collectively referred to as the "Bonds."

          

     Certain proceeds from the issuance of the First Mortgage Bonds were used to
repay $421 million of the  Partnership's  indebtedness,  and financing  fees and
expenses  incurred in connection with the  development  and  construction of the
Facility. The balance of the proceeds were deposited in various restricted funds
that are being  administered  by an independent  disbursement  agent pursuant to
trust  indentures  and a  disbursement  agreement.  Funds  administered  by such
disbursement agent are invested in specified  investments.  These funds together
with  other  funds  available  to the  Partnership  were  used:  (i) to  finance
completion of construction, testing, and initial operation of the Facility; (ii)
to finance construction  interest and  construction-related  contingencies;  and
(iii) to provide for initial working capital.

          

     The  proceeds of the 1994 Tax Exempt Bonds were used to refund $113 million
principal  amount of  Industrial  Development  Revenue  Bonds  (Series 1992A and
Series  1992B)  previously  issued by the Martin County  Industrial  Development
Authority  for the  benefit of the  Partnership,  and to fund,  in part,  a debt
service reserve  account for the benefit of the holders of its tax-exempt  bonds
and to complete construction of certain portions of the Facility.

          

     The  Partnership's  total  borrowings from inception  through December 2002
were $769  million.  The equity loan of $139  million was repaid on December 26,
1995. As of December 31, 2002, the outstanding  borrowings included $125 million
from the 1994 Tax Exempt  Bonds and all of the  available  First  Mortgage  Bond
proceeds. The First Mortgage Bonds have matured as follows:
Series            Aggregate Principal Amount          Date Matured and Paid
       ------            --------------------------          ---------------------

       A-1                      $4,397,000                      June 15, 1996
       A-2                       4,398,000                      December 15, 1996
       A-3                       4,850,000                      June 15, 1997
       A-4                       4,851,000                      December 15, 1997
       A-5                       5,132,000                      June 15, 1998
       A-6                       5,133,000                      December 15, 1998
       A-7                       4,998,000                      June 15, 1999
       A-8                       4,999,000                      December 15, 1999**
16
**As of December 31, 2002, the Partnership has made semi-annual installments totaling
$34,134,438 for the A-9 Series, which does not fully mature until December 15,
2010.

         

     The weighted  average interest rate paid by the Partnership on its debt for
the years ended December 31, 2002 and 2001, was 9.201% and 9.197%, respectively.

         

       Credit Agreements

           

     The Partnership,  pursuant to certain of the Project Contracts, is required
to post letters of credit which, in the aggregate, will have a face amount of no
more than $65  million.  These  letters of credit had been issued  pursuant to a
Letter of Credit and  Reimbursement  Agreement with Credit  Suisse/First  Boston
(formerly  known as Credit  Suisse),  subject to  conditions  contained  in such
Letter  of  Credit  and  Reimbursement  Agreement.  The  Letter  of  Credit  and
Reimbursement  Agreement  had a term of seven years  subject to extension at the
discretion of the banks party thereto.  In September 2001,  Credit  Suisse/First
Boston notified the Partnership of its intention not to extend the term of these
agreements, which expired in the fourth quarter of 2002. These letters of credit
were drawn by LDC on  November  14,  2002 and by FPL on  December  16,  2002 for
$10,000,000 and $1,700,000, respectively.

           

     The  Partnership  entered into a debt service  reserve letter of credit and
reimbursement  agreement,  dated  as of  November  1,  1994,  with  BNP  Paribas
(formerly  known as Banque  Nationale de Paris) pursuant to which a debt service
reserve letter of credit in the amount of approximately  $60 million was issued.
This  agreement has a term of five years subject to extension at the  discretion
of the banks party  thereto.  Drawings  on the debt  service  reserve  letter of
credit became available on the Commercial  Operation Date of the Facility to pay
principal and interest on the First  Mortgage  Bonds,  the 1994 Tax Exempt Bonds
and  interest  on any loans  created by drawings  on such debt  service  reserve
letter of credit.  Cash and other  investments  held in the debt service reserve
account  will be drawn on for the Tax Exempt  Bonds prior to any drawings on the
debt service  reserve letter of credit.  On January 11, 1999, in accordance with
the Partnership's financing documents, the debt service reserve letter of credit
was reduced to approximately $30 million,  which, together with cash in the debt
service  reserve  account,  represents the maximum  remaining  semi-annual  debt
service on the First Mortgage  Bonds and the 1994 Tax Exempt Bonds.  BNP Paribas
notified the Partnership on May 18, 2001 of its intention not to extend the term
of the agreement,  which expires on November 22, 2005. The  Partnership has been
unable  to find an  issuer  to  replace  BNP  Paribas  which  meets  the  credit
requirements   under  the  Trust  Indenture.   Pursuant  to  the  terms  of  the
Disbursement  Agreement,  available cash flows are required to be deposited on a
monthly basis beginning on May 22, 2002 into the Debt Service Reserve Account or
the Tax Exempt  Debt  Service  Reserve  Account,  as the case may be,  until the
required Debt Service Reserve  Account  Required  Balance is achieved,  which is
$29,925,906.  No distributions are allowed to the partners until such balance is
funded.  No funds have been deposited as of December 31, 2002 as there have been
no  available  cash  flows  due  to  working   capital  and  major   maintenance
requirements  of the facility as determined by the  Partnership  pursuant to the
terms of the Disbursement  Agreement.  The Partnership  expects to begin to make
deposits in the second quarter of 2003 and expects to have the required  balance
fully funded by the end of the first quarter of 2005.
17
Year Ending December 31, 2003

           

     For 2003, the Partnership has identified  possible capital  improvements of
approximately  $2.9 million that will  enhance the  reliability  of the facility
and, if approved by the Board of Control,  will be funded  through cash expected
to be generated from operations.  These  improvements  include  additional upper
aquifer wells and rotating vane classifiers for the pulverizers.

           

     In the absence of any major equipment failures,  unit overall  availability
is expected to be comparable to 2002 levels,  which averaged  approximately  97%
for the year.  Capacity  bonuses  are  expected  to be higher in 2003  since the
Capacity  Billing Factor is expected to be at or above 97%, which is the maximum
capacity bonus potential each month the Partnership can achieve.

           

     The  Partnership  believes  that it will  have  adequate  cash  flows  from
operations to fund future working capital  requirements and cover debt repayment
obligations in 2003.Market Risk

           

     Market risk is the risk that changes in market  conditions  will  adversely
affect  earnings or cash flow. The  Partnership  categorizes its market risks as
interest  rate risk and  energy  commodity  price  risk.  Immediately  below are
detailed  descriptions  of the market risks and  explanations  as to how each of
these risks are managed.

           

        Interest Rate Risk

           

     Interest  rate  risk is the risk  that  changes  in  interest  rates  could
adversely affect earnings or cash flows. The  Partnership's  cash and restricted
cash are  sensitive to changes in interest  rates.  Interest  rate changes would
result in a change in interest income due to the difference  between the current
interest  rates on cash and  restricted  cash and the  variable  rate that these
financial  instruments  may  adjust  to  in  the  future.   Interest  rate  risk
sensitivity  analysis  is used  to  measure  interest  rate  risk  by  computing
estimated  changes  in cash  flows as a result  of  assumed  changes  in  market
interest rates. A 10% decrease in 2002 interest rates would be immaterial to the
Partnership's consolidated financial statements.

           

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

           

        Energy Commodity Price Risk

     The Partnership seeks to reduce its exposure to market risk associated with
energy  commodities  such as  electric  power and coal fuel  through  the use of
long-term purchase and sale contracts.  Currently,  the energy price paid by FPL
for the coal cost component of the energy payment is not matched to the price of
base coal in the amended  coal  purchase  agreement.  A  provision  in the Power
Purchase  Agreement  allows FPL and the  Partnership to meet and adjust annually
the energy payment with the objective of minimizing the difference in the actual
energy costs and the energy payments, if the difference is more than 4%.
18
Critical Accounting Policies

           

     The  preparation of  consolidated  financial  statements in accordance with
accounting  principles  generally accepted in the United States involves the use
of  estimates  and  assumptions  that affect the  recorded  amount of assets and
liabilities as of the date of the financial  statements and the reported amounts
of revenues and expenses during the reporting period. Certain of these estimates
and assumptions are considered to be Critical Accounting Policies,  due to their
complexity,  subjectivity,  and  uncertainty,  along with their relevance to the
financial   performance   of  the   Partnership.   Actual   results  may  differ
substantially from these estimates. These policies and their key characteristics
are outlined below.

           

     Revenues  from  the  sale of  electricity  are  recorded  based  on  output
delivered and capacity  provided at rates as specified  under  contract terms in
the  periods to which they  pertain,  calculated  based  upon  certain  capacity
factors and energy and fuel cost estimates.

           

     The Partnership adopted SFAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities"("SFAS No. 133"), as amended by SFAS Nos. 137 and 138, on
January 1, 2001.  This  standard  requires  the  Partnership  to  recognize  all
derivatives,  as defined in the statements listed above, on the balance sheet at
fair value.  Derivatives,  or any portion thereof, that are not effective hedges
must be adjusted to fair value  through  income.  If  derivatives  are effective
hedges,  depending  on the  nature of the  hedges,  changes in the fair value of
derivatives  either will  offset the change in fair value of the hedged  assets,
liabilities,  or firm  commitments  through  earnings,  or will be recognized in
other comprehensive  income, a component of partners' capital,  until the hedged
items are  recognized  in  earnings.  The  Partnership  has  certain  derivative
commodity  contracts for the physical  delivery of purchase and sale  quantities
transacted in the normal course of business.  Since these activities  qualify as
normal purchase and sale activities,  the Partnership has not recorded the value
of the related contracts on its balance sheet, as permitted under the standards.

           

     On April 1, 2002, the Partnership implemented two interpretations issued by
the FASB's Derivative Implementation Group (DIG). DIG Issues C15 and C16 changed
the definition of normal  purchase and sales included in SFAS No. 133. DIG Issue
C15 changed  the  definition  of normal  purchases  and sales for certain  power
contracts.  DIG Issue C16 disallowed  normal  purchases and sales  treatment for
commodity  contracts  (other  than  power  contracts)  that  contain  volumetric
variability or optionality.  The Partnership has reviewed these  interpretations
and has  determined  that its commodity  contracts for the physical  delivery of
purchase and sale  quantities  continue to qualify for the normal  purchases and
sales exception and continue to be recorded on an accrual basis.

           

     On  January  1,  2002  the  Partnership  adopted  Statements  of  Financial
Accounting  Standards (SFAS) No. 144,  Accounting for the Impairment or Disposal
of Long-Lived Assets.  SFAS No. 144 supersedes SFAS No. 121,  Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, but
retains its fundamental  provision for  recognizing and measuring  impairment of
long-lived assets to be held and used. SFAS No. 144 requires that all long-lived
assets to be disposed  of by sale be carried at the lower of carrying  amount or
fair value less cost to sell, and that depreciation cease to be recorded on such
assets.  SFAS No. 144 standardizes the accounting and presentation  requirements
for all long-lived  assets to be disposed of by sale,  and  supersedes  previous
guidance for discontinued  operations of business segments. The initial adoption
of  this  Standard  did not  have  any  impact  on the  Partnership's  Financial
Statements.
19
The  Partnership  reviews the  long-lived  assets for  impairment  whenever
events occur or changes in  circumstances  indicate that the carrying  amount of
the  long-lived  assets may not be  recoverable.  If the  long-lived  assets are
determined to be impaired,  the Partnership will recognize an impairment loss in
accordance with SFAS No. 144. During 2001 and 2002, the Partnership assessed the
facility for possible  impairment when Lodestar Energy,  Inc.,  ("Lodestar") the
Partnership's coal supplier,  announced it had filed for bankruptcy and then was
authorized  to sell its  property  at auction,  respectively.  In the opinion of
management of the  Partnership and based on its impairment  analysis,  there has
been no  impairment  of the  facility  and thus no impact  on the  Partnership's
financial condition or results of operations in either 2001 or 2002.Accounting principles not yet adopted

           

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations."  The Partnership  will adopt this Statement  effective
January  1,  2003.  SFAS No.  143  provides  accounting  requirements  for costs
associated with legal obligations to retire tangible,  long-lived assets.  Under
the Standard,  the asset retirement  obligation is recorded at fair value in the
period in which it is incurred by increasing the carrying  amount of the related
long-lived  asset. In each subsequent  period,  the liability is accreted to its
present value and the  capitalized  cost is depreciated  over the useful life of
the related  asset.  Upon  adoption,  the  cumulative  effect of  applying  this
Statement  will  be  recognized  as a  change  in  accounting  principle  in the
Consolidated  Statements of Operations.  The Partnership is currently evaluating
the impact of applying  this  Statement.  Based on its current  evaluation,  the
Partnership  estimates asset  retirement  obligations to be up to  approximately
$100,000.  The  cumulative  effect  of a change  in  accounting  principle  from
unrecognized  accretion and depreciation expense is estimated to be a loss of up
to approximately $50,000.

           

     In July 2002, the FASB issued Statement of Financial  Accounting  Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which
is effective for exit and disposal activities initiated after December 31, 2002.
In November 2002, the FASB issued Interpretation No. 45, Guarantor's  Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of  Others.   This   Interpretation   establishes  new  disclosure
requirements for all guarantees,  but the measurement criteria are applicable to
guarantees  issued and modified  after  December 31, 2002. In January 2003,  the
FASB Issued  Interpretation No. 46, Consolidation of Variable Interest Entities.
This Interpretation  applies to variable interest entities created after January
31, 2003, and to variable  interest  entities in which an enterprise  obtains an
interest after that date. For variable  interest entities in which an enterprise
holds a variable interest that it acquired before February 1, 2003,  application
begins in the first fiscal year or interim period beginning after June 15, 2003.
The   Partnership   does  not   currently   believe  that  any  of  these  three
standards/interpretations  will have a material impact on its current  financial
position or operations and the Partnership will continue to monitor and access.Legal Matters

           

        The Partnership is currently not involved in any legal proceedings.
20
Item 7A Quantatative and Qualitative Disclosures About Market Risk

The table  below  presents  principal,  interest  and related  weighted  average
interest rates by year of maturity (in thousands).
---------------------------- ----------- ----------- ----------- ----------- ----------- --------------- ------------ ------------
DEBT (all fixed rate)           2003        2004        2005        2006        2007       Thereafter       Total     Fair Value
                                ----        ----        ----        ----        ----       ----------       -----     ----------
Tax Exempt Bonds:
Principal                       $0.0        $0.0        $0.0        $0.0        $0.0        $125,010     $125,010     $161,524
Interest                      $9,865      $9,865      $9,865      $9,865      $9,865        $155,953     $205,278
Average Interest Rate          7.89%       7.89%       7.89%       7.89%       7.89%           7.89%

First Mortgage Bonds:
Principal                    $14,566     $16,785     $16,257     $18,224     $20,944        $345,331     $432,107     $564,929
Interest                     $41,045     $39,645     $38,102     $36,552     $34,801        $211,230     $401,375
Average Interest Rate          9.58%       9.59%       9.61%       9.62%       9.64%         9.75%
---------------------------- ----------- ----------- ----------- ----------- ----------- --------------- ------------ ------------
21
Item 8   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAIndex to Financial Statements                                               Page


        Reports of Independent Auditors and Independent Public Accountants                  23
        Consolidated Balance Sheets                                                         24
        Consolidated Statements of Operations                                               26
        Consolidated Statements of Changes in Partners' Capital                             27
        Consolidated Statements of Cash Flows                                               28
        Notes to Consolidated Financial Statements                                          29
22
Report of Independent Auditors



To the Board of Control of
Indiantown Cogeneration, L.P.:


We have  audited  the  accompanying  consolidated  balance  sheet of  Indiantown
Cogeneration,  L.P.  and  subsidiary  as of  December  31,  2002 and the related
consolidated  statements of operations,  changes in  partners  capital and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the  Partnerships  management.  Our responsibility is to
express  an  opinion  on these  financial  statements  based on our  audit.  The
accompanying  consolidated  balance sheet of Indiantown  Cogeneration,  L.P. and
subsidiary  for the year ended  December  31, 2001 and the related  consolidated
statements of operations,  changes in partners  capital and cash flows for
each of the two years in the period ended  December  31,  2001,  were audited by
other  auditors who have ceased  operations  and whose report dated  January 23,
2002,  expressed  an  unqualified  opinion on those  statements  and included an
explanatory paragraph that disclosed the change in the Partnerships method
of accounting for scheduled major overhauls discussed in Note 2 to the financial
statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the 2002 financial statements referred to above present fairly,
in all material  respects,  the  consolidated  financial  position of Indiantown
Cogeneration,  L.P. and  subsidiary at December 31, 2002,  and the  consolidated
results of their  operations  and their cash flows for the year then  ended,  in
conformity with accounting  principles  generally accepted in the United States./s/  Ernst & Young LLP

McLean, Virginia
February 24, 2003
23
Report of Independent Public Accountants




To Indiantown Cogeneration, L.P.:


We have  audited the  accompanying  consolidated  balance  sheets of  Indiantown
Cogeneration,  L.P. (a Delaware limited  partnership) and subsidiary  (the
Partnership)   as  of  December  31,  2001  and  2000,   and  the  related
consolidated  statements of operations,  changes in  partners  capital and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the  Partnerships  management.  Our responsibility is to
express  an  opinion  on  these  financial   statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Indiantown  Cogeneration,  L.P.
and  subsidiary  as of  December  31,  2001 and 2000,  and the  results of their
operations  and their cash flows for the years  then  ended in  conformity  with
accounting principles generally accepted in the United States.

As discussed in Note 2 to the financial statements,  the Partnership changed its
method of accounting for scheduled major overhauls in 2000./S/  ARTHUR ANDERSEN LLP



Vienna, Virginia
January 23, 2002
24
Indiantown Cogeneration, L.P. and Subsidiary
                                            Consolidated Balance Sheets
                                          As of December 31, 2002 and 2001


                                   ASSETS                                             2002                      2001
------------------------------------------------------------------------     ------------------        ------------------

CURRENT ASSETS:

     Cash and cash equivalents                                                $         289,738         $         331,956
     Restricted cash                                                                  1,700,000                         -
     Accounts receivable-trade                                                       17,512,867                14,443,374
     Inventories                                                                        740,981                   259,282
    Prepaid expenses                                                                    927,771                   981,571
     Deposits                                                                            44,000                    44,450
    Investments held by Trustee, including restricted funds
     of  $5,568,725 and $2,666,539, respectively                                     14,913,265                 9,572,996
                                                                              -----------------         ------------------
               Total current assets                                                  36,128,622                25,633,629

INVESTMENTS HELD BY TRUSTEE,
     restricted funds                                                                26,001,000                15,502,121

DEPOSITS                                                                                185,069                   171,737

PROPERTY, PLANT & EQUIPMENT:
     Land                                                                             8,582,363                 8,582,363
     Electric and steam generating facilities                                       702,090,197               702,175,087
     Less - accumulated depreciation                                              (110,747,421)              (95,613,164)
                                                                             ------------------        ------------------
               Net property, plant & equipment                                      599,925,139               615,144,286

FUEL RESERVE                                                                          3,565,050                 4,059,534

DEFERRED FINANCING COSTS, net of accumulated
amortization of $46,497,413 and $45,503,768, respectively                            13,689,503                14,683,148
                                                                             ------------------        ------------------

               Total assets                                                   $     679,494,383        $      675,194,455
                                                                             ==================        ==================


              The accompanying notes are an integral part of these consolidated financial statements.
25
Indiantown Cogeneration, L.P. and Subsidiary
                                            Consolidated Balance Sheets
                                          As of December 31, 2002 and 2001


LIABILITIES AND PARTNERS' CAPITAL                                                2002                      2001
------------------------------------------------------------------        -----------------         -----------------

CURRENT LIABILITIES:
     Accounts payable and accrued liabilities                           $         9,769,844        $       10,474,699
     Accounts payable and accrued liabilities to related parties
      (Note 8)                                                                    2,841,984                   999,627
     Accrued interest                                                             2,321,651                 2,324,178
     Current portion - First Mortgage Bonds                                      14,566,087                11,460,407
     Current portion of lease payable - railcars                                    383,131                   358,575
     Current portion of term loans                                                1,431,607                         -
                                                                          -----------------         -----------------
               Total current liabilities                                         31,314,304                25,617,486
                                                                          -----------------         -----------------

LONG TERM DEBT:
     First Mortgage Bonds                                                       417,541,475               432,107,562
     Tax Exempt Facility Revenue Bonds                                          125,010,000               125,010,000
     Lease payable - railcars                                                     3,203,957                 3,584,963
     Term loans                                                                  10,162,581                         -
                                                                          -----------------         -----------------
               Total long term debt                                             555,918,013               560,702,525

                                                                          -----------------         -----------------
               Total liabilities                                                587,232,317               586,320,011
                                                                          -----------------         -----------------

COMMITMENTS AND CONTINGENCIES (NOTE 7)

PARTNERS' CAPITAL:
  General Partners:
    Palm Power Corporation                                                        9,226,206                 8,887,444
    Indiantown Project Investment, L.P.                                          18,406,281                17,730,450
  Limited Partners:
    Toyan Enterprises                                                            27,724,753                26,706,773
    Thaleia, LLC                                                                 36,904,826                35,549,777
                                                                          -----------------         -----------------
               Total partners' capital                                           92,262,066                88,874,444
                                                                          -----------------         -----------------

               Total liabilities and partners' capital                    $     679,494,383         $     675,194,455
                                                                          =================         =================



              The accompanying notes are an integral part of these consolidated financial statements.
26
Indiantown Cogeneration, L.P. and Subsidiary
                      Consolidated Statements of Operations
              For the Years Ended December 31, 2002, 2001 and 2000


                                                                    2002              2001               2000
                                                            ----------------- ------------------ -------------------
                                                            ----------------- ------------------ -------------------
Operating Revenues:
     Electric capacity and capacity bonus                    $113,561,178        $122,202,351       $124,029,498
     Electric energy revenue                                   48,856,279          52,901,962         53,652,475
     Steam                                                        269,578             327,778            108,418
                                                            ----------------- ----------------   ------------------
         Total operating revenues                             162,687,035         175,432,091        177,790,391
                                                            ----------------- ----------------   ------------------

Cost of Sales:
     Fuel and ash                                              56,023,495         56,320,761        55,910,214
     Operating and maintenance                                 24,716,289         21,654,029        19,353,798
     Depreciation                                              15,223,197         15,187,033        15,003,258
     Loss on disposal of assets                                    29,647            609,097           155,780
                                                              --------------     -------------     -------------
         Total cost of sales                                   95,992,628         93,770,920        90,423,050
                                                              -----------        -----------       -------------

Gross Profit                                                   66,694,407         81,661,171        87,367,341
                                                              -----------        -----------       -----------

Other Operating Expenses:
     General and administrative                                  3,171,241          4,450,258         5,179,313
     Insurance and taxes                                         6,960,282          7,155,260         6,475,006
                                                              ------------       ------------      ------------
         Total other operating expenses                         10,131,523         11,605,518        11,654,319
                                                               -----------        -----------       -----------
Operating Income                                                56,562,884         70,055,653        75,713,022
                                                               -----------        -----------       -----------

Non-Operating Income (Expense):
     Interest expense                                         (54,421,727)       (55,528,078)      (56,905,787)
     Interest income                                             1,246,465         1,767,194          2,407,354
                                                            ---------------     -------------     --------------
         Net non-operating expense                            (53,175,262)       (53,760,884)      (54,498,433)
                                                            --------------      -------------     -------------

Income before cumulative effect of a change in accounting
principle                                                        3,387,622        16,294,769         21,214,589


Cumulative effect of a change in accounting
principle for scheduled major overhaul costs
(Note 2)                                                                --                --            920,536
                                                            --------------      -------------     -------------
Net Income                                                    $ 3,387,622     $   16,294,769      $ 22,135,125
                                                            =============     ===============     =============

    The accompanying notes are an integral part of these consolidated financial statements.
27
Indiantown Cogeneration, L. P. and Subsidiary
                      Consolidated Statements of Changes in Partners' Capital
                         For the Years Ended December 31, 2002, 2001 and 2000


                                                                                                            ---------------
                                                     Toyan      Palm Power                                  Total Partners'
                                                  Enterprises   Corporation       IPILP       Thaleia, LLC      Capital
                                                  -----------   -----------   --------------  ------------  ---------------

Partners' capital, December 31, 1999             $26,517,489   $8,824,455     $17,604,787     $35,297,819     $88,244,550
                                                 ===========  ===========     ===========     ===========   =============
Net Income
                                                    6,651,60    2,213,512       4,415,957        8,854,05      22,135,125

Capital distributions                            (7,632,700)  (2,540,000)     (5,067,300)     (10,160,000)   (25,400,000)
                                                 -----------  -----------     -------------  -------------  --------------

Partners' capital, December 31, 2000             $25,536,395  $8,497,967      $16,953,444     $33,991,869     $84,979,675
                                                 ===========  ===========     =============   ============= ==============

Net Income
                                                    4,896,57   1,629,477        3,250,806       6,517,908      16,294,769

Capital distributions                            (3,726,200)  (1,240,000)      (2,473,800)     (4,960,000)    (12,400,000)
                                                 -----------  -----------     -------------  -------------  --------------

Partners' capital, December 31, 2001             $26,706,773  $8,887,444       $17,730,450    $35,549,777     $88,874,444
                                                 ===========  ==========      ============   ============   =============



Net Income                                          1,017,98     338,762           675,831      1,355,049       3,387,622
                                                 ------------ ------------    ------------   ------------   -------------

Partners' capital, December 31, 2002             $27,724,753  $9,226,206       $18,406,281    $36,904,826     $92,262,066
                                                 ===========  ==========      ===========    ============   =============

                            The accompanying notes are an integral part of these consolidated financial statements.
28
Indiantown Cogeneration, L.P. and Subsidiary
                      Consolidated Statements of Cash Flows
              For the Years Ended December 31, 2002, 2001, and 2000

                                                                                      2002              2001              2000
                                                                               -----------------   ---------------   ---------------
  CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                                                     $3,387,622       $16,294,769      $22,135,125
           Adjustments to reconcile net income to net cash
              provided by operating activities:
             Cumulative effect of a change in accounting principles                           --                --        (920,536)
             Depreciation and amortization                                            16,217,265        16,011,589       15,827,822
             Loss on disposal of assets                                                   29,647           609,097          155,780
      Effect of changes in assets and liabilities:
             Increase in accounts receivable-trade                                   (3,069,493)         (589,889)        (381,500)
             Decrease (increase) in inventories and fuel reserve                          12,785       (1,279,926)        (574,774)
             Decrease (increase) in deposits and prepaid expenses                         40,917         (193,705)         (72,231)
          Increase in accounts payable and
            accrued liabilities,
            including related parties, and accrued interest                           1,134,975         2,102,645         1,844,616
                                                                                    -----------       -----------       -----------
                         Net cash provided by operating activities                    17,753,718        32,954,580       38,014,302
                                                                                      ----------        ----------       ----------

  CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of property, plant & equipment                                       (34,119)       (2,585,658)      (2,064,741)
          Increase in investments held by Trustee                                   (15,839,148)       (6,986,397)        (302,934)
                                                                                    ------------       -----------        ---------
                        Net cash used in investing activities                       (15,873,267)       (9,572,055)      (2,367,675)
                                                                                    ------------       -----------      -----------

  CASH FLOWS FROM FINANCING ACTIVITIES:
          Increase in restricted cash                                                (1,700,000)                 -                -
          Payment on capital lease obligation - railcars                               (356,451)         (331,628)        (308,534)
          Borrowings under revolving credit agreement                                          -        3,697,173       12,835,436
          Repayments under revolving credit agreement                                          -       (3,697,173)     (12,835,436)
          Borrowings under letter of credit agreement                                 11,700,000                 -                -
          Repayments under letter of credit agreement                                  (105,811)                 -                -
          Payment on First Mortgage Bonds                                           (11,460,407)      (11,140,896)     (11,533,135)
          Capital distributions                                                                -      (12,400,000)     (25,400,000)
                                                                                    ------------      ------------     ------------
                 Net cash used in financing activities                               (1,922,669)      (23,872,524)     (37,241,669)
                                                                                     -----------      ------------     ------------

  CHANGE IN CASH AND CASH EQUIVALENTS                                                   (42,218)         (489,999)      (1,595,042)

  Cash and cash equivalents, beginning of year                                           331,956           821,955       2,416,997
                                                                                 ---------------   ---------------   -------------
  Cash and cash equivalents, end of year                                          $      289,738     $     331,956    $    821,955
                                                                                 ===============   ===============   ==============


  SUPPLEMENTAL DISCLOSURE OF CASH FLOW
         INFORMATION:
                Cash paid for interest                                               $52,077,732       $53,082,539      $54,141,427
                                                                                     ===========       ===========      ===========

                   The accompanying notes are an integral part of these consolidated financial statements.
29
Indiantown Cogeneration, L.P. and Subsidiary
                   Notes to Consolidated Financial Statements
                        As of December 31, 2002 and 20011.   ORGANIZATION AND BUSINESS:

            

     Indiantown  Cogeneration,  L.P. (the  "Partnership")  is a special  purpose
Delaware  limited  partnership  formed on October 4, 1991. The  Partnership  was
formed to develop,  construct,  and operate an approximately  330 megawatt (net)
pulverized  coal-fired  cogeneration  facility  (the  "Facility")  located on an
approximately 240 acre site in southwestern Martin County, Florida. The Facility
produces  electricity  for sale to Florida  Power & Light  Company  ("FPL")  and
supplies  steam to Caulkins  Indiantown  Citrus Co.  ("Caulkins")  for its plant
located near the Facility. In September 2001, Caulkins sold its processing plant
to Louis Dreyfus Citrus, Inc. ("LDC").

            

     The  original  general  partners  were  Toyan  Enterprises   ("Toyan"),   a
California corporation and a wholly owned special purpose indirect subsidiary of
PG&E  National Energy Group,  Inc. ("NEG,  Inc.") and Palm Power Corporation
("Palm"),  a Delaware  corporation and a special purpose indirect  subsidiary of
Bechtel Enterprises, Inc. ("Bechtel Enterprises").  The sole limited partner was
TIFD III-Y,  Inc.  ("TIFD"),  a special purpose  indirect  subsidiary of General
Electric Capital Corporation  ("GECC").  During 1994, the Partnership formed its
sole, wholly owned subsidiary, Indiantown Cogeneration Funding Corporation ("ICL
Funding"),  to  act as  agent  for,  and  co-issuer  with,  the  Partnership  in
accordance  with the 1994 bond offering  discussed in Note 4. ICL Funding has no
separate operations and has only $100 in assets.

            

     In 1998, Toyan  consummated  transactions  with DCC Project Finance Twelve,
Inc.  ("PFT"),  whereby  PFT,  through  a new  partnership  (Indiantown  Project
Investment,  L.P.  ("IPILP"))  with Toyan,  became a new general  partner in the
Partnership.  Toyan is the  sole  general  partner  of  IPILP.  Prior to the PFT
transaction,  Toyan  converted some of its general  partnership  interest into a
limited  partnership  interest such that Toyan now directly holds only a limited
partnership  interest  in  the  Partnership.  In  addition,  Bechtel  Generating
Company, Inc. ("Bechtel Generating"),  sold all of the stock of Palm to a wholly
owned indirect subsidiary of Cogentrix Energy, Inc. ("Cogentrix").  Palm holds a
10% general partner interest in the Partnership.

            

     On June 4, 1999,  Thaleia,  LLC  ("Thaleia"),  a wholly owned subsidiary of
Palm and indirect  wholly owned  subsidiary of  Cogentrix,  acquired from TIFD a
19.90%  limited  partner  interest in the  Partnership.  On September  20, 1999,
Thaleia  acquired  another  20.00%  limited  partnership  interest from TIFD and
TIFD's  membership on the Board of Control of the  Partnership.  On November 24,
1999,  Thaleia  purchased TIFD's remaining limited  partnership  interest in the
Partnership from TIFD.

            

     The net income of the  Partnership is allocated to Toyan,  Palm,  IPILP and
Thaleia  (collectively,   the  "Partners")  based  on  the  following  ownership
percentages:
Toyan                          30.05%
                Palm                           10.00%
                IPILP                          19.95%
                Thaleia                        40.00%
30
All distributions  other than liquidating  distributions will be made based
on the Partners'  percentage  interest as shown above,  in  accordance  with the
project  documents and at such times and in such amounts as the Board of Control
of the Partnership determines.

            

     The  Partnership  is managed by  PG&E  National  Energy  Group  Company
("NEG"),  formerly known as PG&E Generating Company pursuant to a Management
Services  Agreement (the "MSA").  The Facility is operated by PG&E Operating
Services Company  ("PG&E OSC"),  formerly known as U.S.  Operating  Services
Company,   pursuant  to  an  Operation  and  Maintenance   Agreement  (the  "O&M
Agreement").  NEG and PG&E OSC are general  partnerships  indirectly  wholly
owned by NEG, Inc., an indirect wholly owned subsidiary of PG&E  Corporation
(see Note 8).

            

     The Partnership  commenced commercial  operations on December 22, 1995 (the
"Commercial Operation Date").

            

     As a result of the sustained downturn in the electric energy industry, NEG,
Inc. and certain of its  consolidated  affiliates  have  experienced a financial
downturn  which caused the major credit rating  agencies to downgrade  NEG, Inc.
and certain of its consolidated  affiliates'  credit ratings to below investment
grade.  The  credit  rating  agency  action  has had no  material  impact on the
financial condition or results of operations of the Partnership.

            

     On October 8, 2002,  Moody's stated that in conjunction  with the downgrade
of NEG it had placed the Partnership's debt under review for possible downgrade.
On October 15, 2002, S&P stated that the recent  downgrade of NEG would not have
an effect on the rating of the Partnership's  debt at this time. S&P's rating of
the Partnership's debt is "BBB-". On November 5, 2002, Moody's issued an opinion
update  changing the rating outlook of the  Partnership's  debt to "under review
for  possible  downgrade"  from  "negative  outlook".   Moody's  rating  of  the
Partnership's debt is "Baa3".

     NEG,  Inc. and certain  affiliates  are  currently in default under various
debt agreements and guaranteed  equity  commitments.  NEG, Inc., and its lenders
are attempting to restructure these  commitments.  As part of the restructuring,
NEG, Inc. and the affected  affiliates are exploring  various  options to reduce
their liquidity issues. These options include the abandonment, sale, or transfer
of assets, and the reduction of NEG, Inc.'s energy trading operations.

            

     If  the  lenders  exercise  their  default  remedies  or if  the  financial
commitments are not restructured,  NEG, Inc. and the affected  affiliates may be
compelled to seek protection  under or be forced into a proceeding under Chapter
11 of the U.S. Bankruptcy Code.

            

     NEG, Inc.  owns an indirect  interest in the  Partnership,  and through its
wholly owned  subsidiaries  PG&E  National  Energy Group  Company  (NEG) and
PG&E  Operating  Services  Company  (PG&EOSC)  provides  services to the
Partnership.  Although the  management  of NEG,  Inc. does not expect a material
impact on the  Partnership as a result of the matters set for in the prior three
paragraphs,  the Partnership cannot be certain that the insolvency or bankruptcy
involving  NEG,  Inc.  or  any  of  its   subsidiaries   would  not  affect  the
Partnership's  operating  contracts  with any NEG, Inc.  subsidiary,  any of the
Partnership's  debt  arrangements or the ownership  arrangements  respecting the
Partnership.2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:Use of Estimates

            

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates and assumptions that affect reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.Principles of Consolidation

            

     The accompanying  consolidated financial statements include the accounts of
the Partnership and ICL Funding. All significant intercompany balances have been
eliminated in consolidation.Cash Equivalents

            

     The Partnership  considers all highly liquid investments  purchased with an
original maturity of three months or less to be cash equivalents.Inventories

            

     Inventories  are  stated at the lower of cost or market  using the  average
cost method.  The  Partnership  determines  average cost by summing the weighted
average  cost of  inventory  at the  beginning  of the month  plus the  weighted
average  cost of  additions  during the month to  determine  the average cost of
inventory consumed and the ending inventory balance.Deposits

            

     Deposits are stated at cost and include  amounts  required under certain of
the Partnership's agreements as described in Note 3.Investments Held by Trustee

            

     The investments held by the Trustee represent bond and equity proceeds held
by a bond Trustee/disbursement agent and are carried at cost, which approximates
market value. All funds are invested in either Nations Treasury  Fund-Class A or
other permitted  investments for longer periods.  The Partnership also maintains
restricted  investments covering a portion of the partnership's debt as required
by the  financing  documents.  The proceeds  include  $12,501,000  of restricted
tax-exempt  debt service  reserve  required by the  financing  documents and are
classified  as a  noncurrent  asset  on the  accompanying  consolidated  balance
sheets.  A qualifying  facility  ("QF")  reserve of $3,500,000 is also held as a
non-current asset (see Note 4).
32
Property, Plant and Equipment

            

     Property, plant and equipment, which consist primarily of the Facility, are
recorded at actual cost. The Facility is depreciated  on a  straight-line  basis
over 35 years with a residual value on the Facility  approximating 25 percent of
the gross Facility costs.

            

     Other  property,  plant and equipment are  depreciated  on a  straight-line
basis over the  estimated  economic or service  lives of the  respective  assets
(ranging from five to seven years).  Routine maintenance and repairs are charged
to expense as incurred.

            

     On  January  1,  2002  the  Partnership  adopted  Statements  of  Financial
Accounting  Standards (SFAS) No. 144,  Accounting for the Impairment or Disposal
of Long-Lived Assets.  SFAS No. 144 supersedes SFAS No. 121,  Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, but
retains its fundamental  provision for  recognizing and measuring  impairment of
long-lived assets to be held and used. SFAS No. 144 requires that all long-lived
assets to be disposed  of by sale be carried at the lower of carrying  amount or
fair value less cost to sell, and that depreciation cease to be recorded on such
assets.  SFAS No. 144 standardizes the accounting and presentation  requirements
for all long-lived  assets to be disposed of by sale,  and  supersedes  previous
guidance for discontinued  operations of business segments. The initial adoption
of  this  Standard  did not  have  any  impact  on the  Partnership's  Financial
Statements.

            

     The  Partnership  reviews the  long-lived  assets for  impairment  whenever
events occur or changes in  circumstances  indicate that the carrying  amount of
the  long-lived  assets may not be  recoverable.  If the  long-lived  assets are
determined to be impaired,  the Partnership will recognize an impairment loss in
accordance with SFAS No. 144. During 2001 and 2002, the Partnership assessed for
possible impairment of the facility when Lodestar Energy, Inc., ("Lodestar") the
Partnership's coal supplier,  announced it had filed for bankruptcy and then was
authorized  to sell its property at auction,  respectively  (see Note 5). In the
opinion of management of the Partnership  and based on its impairment  analysis,
there  has  been  no  impairment  of the  facility  and  thus no  impact  on the
Partnership's  financial  condition or results of  operations  in either 2001 or
2002.

Fuel Reserve

            

     The fuel reserve,  carried at cost,  represents an approximate  twenty-five
day supply of coal held for emergency purposes. Since the use of this reserve in
an emergency is not expected in the short-term, the related cost is reflected as
non-current on the accompanying consolidated balance sheets.Deferred Financing Costs

            

     Financing  costs,  consisting  primarily  of the costs  incurred  to obtain
project financing,  are deferred and amortized using the effective interest rate
method over the term of the related permanent financing.
33
Scheduled Major Overhauls

            

     In fiscal year 2000, the Securities and Exchange  Commission ("SEC") issued
a ruling that changed the allowable  methods of accounting  for scheduled  major
overhaul to the as  incurred  method  rather  than the accrue in advance  method
which had been used by the  Partnership.  The SEC's ruling  allows  companies to
recognize the change as a cumulative effect of a change in accounting  principle
in the year of adoption.  As such, the Partnership reflected a cumulative effect
of a change in  accounting  principle in the year of adoption.  The  Partnership
reflected a cumulative effect of a change in accounting principle of $920,536 in
the  accompanying  financial  statements.  Since  no  scheduled  major  overhaul
expenses  were  incurred  in 2000,  the effect of adopting  this new  accounting
principle was a reduction of operating and maintenance costs of $424,000.Revenue Recognition

            

     Revenues  from  the  sale of  electricity  are  recorded  based  on  output
delivered and capacity  provided at rates as specified  under  contract terms in
the  periods to which they  pertain.  No  collateral  is  required  on  accounts
receivable.Income Taxes

            

     Under  current law, no Federal or state  income taxes are paid  directly by
the  Partnership.  All  items of  income  and  expense  of the  Partnership  are
allocable  to and  reportable  by the  Partners in their  respective  income tax
returns.  Accordingly,  no  provision is made in the  accompanying  consolidated
financial statements for Federal or state income taxes.Derivative Financial Instruments

            

     The Partnership adopted SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities,  as amended by SFAS No. 137 and SFAS No. 138, on January
1, 2001. This standard requires the Partnership to recognize all derivatives, as
defined in the  statements  listed  above,  on the balance  sheet at fair value.
Derivatives,  or any  portion  thereof,  that are not  effective  hedges must be
adjusted to fair value through  income.  If  derivatives  are effective  hedges,
depending on the nature of the hedges,  changes in the fair value of derivatives
either will offset the change in fair value of the hedged  assets,  liabilities,
or  firm  commitments   through  earnings,   or  will  be  recognized  in  other
comprehensive  income, a component of partners' capital,  until the hedged items
are recognized in earnings.  The  Partnership has certain  derivative  commodity
contracts for the physical  delivery of purchase and sale quantities  transacted
in the normal  course of  business.  Since  these  activities  qualify as normal
purchase and normal sale activities,  the Partnership has not recorded the value
of the related contracts on its balance sheet, as permitted under the standards.

            

     On April 1, 2002, the Partnership implemented two interpretations issued by
the Financial  Accounting  Standards  Board's (FASB)  Derivative  Implementation
Group (DIG).  DIG Issues C15 and C16 clarified the definition of normal purchase
and sales  included in SFAS No. 133.  DIG Issue C15  changed the  definition  of
normal purchases and sales for certain power contracts. DIG Issue C16 disallowed
normal  purchases and sales treatment for commodity  contracts (other than power
contracts) that contain volumetric  variability or optionality.  The Partnership
has  reviewed  these  interpretations  and has  determined  that  its  commodity
contracts for the physical delivery of purchase and sale quantities continues to
qualify for the normal purchases and sales exception and continue to be recorded
on an accrual basis.
34
New Accounting Pronouncements But Not Yet Adopted

            

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations.  The  Partnership  will adopt this Statement  effective  January 1,
2003. SFAS No. 143 provides  accounting  requirements  for costs associated with
legal obligations to retire tangible, long-lived assets. Under the Standard, the
asset retirement  obligation is recorded at fair value in the period in which it
is incurred by increasing the carrying amount of the related  long-lived  asset.
In each  subsequent  period,  the liability is accreted to its present value and
the capitalized  cost is depreciated  over the useful life of the related asset.
Upon  adoption,  the  cumulative  effect  of  applying  this  Statement  will be
recognized as a change in accounting principle in the Consolidated Statements of
Operations.  The Partnership is currently evaluating the impact of applying this
Statement.  Based on its current  evaluation,  the  Partnership  estimates asset
retirement obligations to be up to approximately $100,000. The cumulative effect
of a change in accounting principle from unrecognized accretion and depreciation
expense is estimated to be a loss of up to approximately $50,000.

            

     In July 2002, the FASB issued Statement of Financial  Accounting  Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which
is effective for exit and disposal activities initiated after December 31, 2002.
In November 2002, the FASB issued Interpretation No. 45, Guarantor's  Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness  of  Others.   This   Interpretation   establishes  new  disclosure
requirements for all guarantees,  but the measurement criteria are applicable to
guarantees  issued and modified  after  December 31, 2002. In January 2003,  the
FASB Issued  Interpretation No. 46, Consolidation of Variable Interest Entities.
This Interpretation  applies to variable interest entities created after January
31, 2003, and to variable  interest  entities in which an enterprise  obtains an
interest after that date. For variable  interest entities in which an enterprise
holds a variable interest that it acquired before February 1, 2003,  application
begins in the first fiscal year or interim period beginning after June 15, 2003.
The   Partnership   does  not   currently   believe  that  any  of  these  three
standards/interpretations  will have a material impact on its current  financial
position or operations.Reclassifications

            

     Certain  prior year  amounts  have been  reclassified  to conform  with the
current year presentation.3.   DEPOSITS:

            


     In 1991, in accordance with the Planned Unit  Development  Zoning Agreement
between the Partnership and Martin County, the Partnership  deposited $1,000,000
in trust  with the Board of County  Commissioners  of  Martin  County  (the "PUD
Trustee").  Income from this trust will be used solely for  projects  benefiting
the community of  Indiantown.  On July 23, 2025,  the PUD Trustee is required to
return  the  deposit  to the  Partnership.  As of  December  31,  2002 and 2001,
estimated present values of this deposit of $185,069 and $171,737, respectively,
are included in deposits in the accompanying  consolidated  balance sheets.  The
remaining balance is included in property,  plant and equipment as part of total
capitalized construction expenses.
35
4.   BONDS AND NOTES PAYABLE:First Mortgage Bonds

            

     In November  22,  1994,  the  Partnership  and ICL Funding  jointly  issued
$505,000,000  of First Mortgage Bonds (the "First  Mortgage  Bonds") in a public
issuance  registered with the SEC. Proceeds from the issuance were used to repay
outstanding  balances  of  $273,513,000  on a  prior  construction  loan  and to
complete  the  project.  The First  Mortgage  Bonds are secured by a lien on and
security  interest in substantially  all of the assets of the  Partnership.  The
First Mortgage Bonds were issued in 10 separate series with fixed interest rates
ranging from 7.38% to 9.77% and with  maturities  ranging from 1996 to 2020. The
weighted  average  interest rate was  approximately  9.57% during 2002 and 2001.
Interest  is  payable  semi-annually  on June 15 and  December  15 of each year.
Interest   expense  related  to  the  First  Mortgage  Bonds  was   $42,131,432,
$43,176,476, and $44,275,872, in 2002, 2001, and 2000 respectively.Tax Exempt Facility Revenue Bonds

            

     The proceeds  from the issuance of  $113,000,000  of Series 1992A and 1992B
Industrial  Development  Revenue  Bonds (the "1992  Bonds")  through  the Martin
County  Industrial  Development  Authority  (the  "MCIDA")  were  invested in an
investment portfolio with Fidelity Investments  Institutional  Services Company.
On November 22, 1994, the Partnership refunded the 1992 Bonds with proceeds from
the issuance of  $113,000,000  Series 1994A and of $12,010,000  Series 1994B Tax
Exempt Facility  Refunding  Revenue Bonds which were issued on December 20, 1994
(the Series 1994A Bonds and the Series 1994B Bonds, collectively,  the "1994 Tax
Exempt Bonds").

            

     The 1994 Tax Exempt  Bonds were issued by the MCIDA  pursuant to an Amended
and Restated  Indenture of Trust between the MCIDA and  NationsBank  of Florida,
N.A.  (succeeded  by The Bank of New York  Trust  Company of  Florida,  N.A.) as
trustee (the "Trustee").  Proceeds from the 1994 Tax Exempt Bonds were loaned to
the  Partnership  pursuant to the MCIDA  Amended  and  Restated  Authority  Loan
Agreement  dated as of November 1, 1994 (the  "Authority  Loan").  The Authority
Loan is secured by a lien on and a security interest in substantially all of the
assets of the Partnership.  The 1994 Tax Exempt Bonds, which mature December 15,
2025,  carry  fixed  interest  rates of 7.875 % and 8.05% for  Series  1994A and
1994B,  respectively.  Total  interest paid related to the 1994 Tax Exempt Bonds
was $9,865,555  for each of the years ended  December 31, 2002,  2001, and 2000.
The Tax Exempt Bonds and the First Mortgage Bonds are equal in seniority.

            

     Future minimum  payments  related to  outstanding  First Mortgage Bonds and
1994 Tax Exempt Bonds as of December 31, 2002 are as follows:
2003                   $   14,566,087
                2004                       16,785,152
                2005                       16,257,206
                2006                       18,224,203
                2007                       20,944,428
                Thereafter                470,340,486

                    Total                $557,117,562
                                         ============
36

Revolving Credit Agreement

            

     In November  2001,  the  Revolving  Credit  Agreement was  terminated.  The
Revolving  Credit  Agreement  provided  for the  availability  of funds  for the
working capital requirements of the Facility.  It had a term of seven years from
November 1, 1994.  The interest rate was based upon various  short-term  indices
chosen at the Partnership's option and was determined  separately for each draw.
The weighted average interest rates for the borrowings were approximately  5.52%
and 7.98%  during  2001 and 2000,  respectively.  The credit  facility  included
commitment  fees,  to be paid  quarterly,  of 0.375  percent  on the  unborrowed
portion.  The face amount of the original  working  capital letter of credit was
increased in November  1994 from $10 million to $15 million.  Under the original
and new working  capital credit  facilities,  the  Partnership  paid $53,170 and
$52,919 in commitment fees in 2001 and 2000,  respectively.  All borrowings made
under this agreement were repaid in the year borrowed.  The Partnership incurred
interest expense of $17,148 and $84,574 in 2001 and 2000, respectively,  related
to the Revolving Credit Agreement.FPL Termination Fee Letter of Credit

            

     On or before the Commercial Operation Date, the Partnership was required to
provide  FPL with a letter  of  credit  equal to the  total  termination  fee as
defined  in the  Power  Purchase  Agreement  ("PPA")  in each year not to exceed
$50,000,000.  Pursuant  to the terms of the Letter of Credit  and  Reimbursement
Agreement, the Partnership obtained a commitment for the issuance of this letter
of credit. At the Commercial  Operation Date, this letter of credit replaced the
completion  letter of credit.  The initial amount of $13,000,000  was issued for
the first year of operations  and increased to  $40,000,000  in January 1999 and
then to  $50,000,000  in January  2000. On June 1, 2002 the letter of credit was
reduced  to  $3,100,000  and on  November  1,  2002 it was  further  reduced  to
$1,700,000 pursuant to the PPA.

            

     In September 2001, Credit  Suisse/First  Boston notified the Partnership of
its intention not to extend the term of this letter of credit,  which expired on
December 22, 2002. On the expiration  date, FPL drew on the direct pay letter of
credit for the full amount of $1,700,000,  which  converted the letter of credit
to a term loan. The funds are owned by the  Partnership  but held by FPL and are
included in restricted cash on the  consolidated  balance sheets.  The principal
amount  of  this  seven  year  term  loan is  payable  in  fourteen  semi-annual
installments  of $157,645 with a prepayment  provision of any  outstanding  loan
amount  before cash would be available  for  distribution  to the  Partners.  No
interest or principal  payments were made in 2002.  Commitment fees of $513,573,
$697,049,  and $689,092  were paid on this letter of credit in 2002,  2001,  and
2000, respectively.FPL QF Letter of Credit

            

     Within 60 days after the Commercial  Operation  Date, the  Partnership  was
required  to  provide  a  letter  of  credit  for use in the  event of a loss of
Qualifying  Facility ("QF") status under the Public Utility Regulatory  Policies
Act of 1978  ("PURPA").  The initial amount was $500,000  increasing by $500,000
per  agreement  year to a maximum of  $5,000,000.  Pursuant  to the terms of the
Letter of  Credit  and  Reimbursement  Agreement,  the  Partnership  obtained  a
commitment for the issuance of this letter of credit. The amount will be used by
the Partnership as necessary to maintain or reinstate the facility's  qualifying
facility  status.  The  Partnership  may,  in lieu of a letter of  credit,  make
regular  cash  deposits  to a  dedicated  account  in amounts  of  $500,000  per
agreement  year to a maximum of $5,000,000.  In February  1996, the  Partnership
established  a QF account  with the  Trustee.  The balance in this account as of
December 31, 2002 and 2001, was $3,500,000 and $3,000,000,  respectively, and is
included in noncurrent assets as investments held by trustee,  restricted funds,
on the accompanying consolidated balance sheets.
37
Steam Host Letter of Credit

     At financial closing in October 1992, the Partnership provided LDC a letter
of credit in the amount of $10,000,000 pursuant to the Energy Services Agreement
(see Note 6).  This  letter of credit was  terminated  in 1994 and a new one was
issued  with  essentially  the same terms.  In the event of a default  under the
Energy  Services  Agreement  (see Note 6), the  Partnership  is  required to pay
liquidated  damages in the amount of $10,000,000.  Failure by the Partnership to
pay the  damages  within 30 days  allows the steam host to draw on the letter of
credit for the amount of damages suffered by LDC.

            

     In September 2001, Credit  Suisse/First  Boston notified the Partnership of
its intention not to extend the term of this letter of credit,  which expired on
November 22, 2002. This letter of credit, which was drawn by LDC on November 14,
2002 and is held in an escrow  account,  is  included  in  noncurrent  assets as
investments held by trustee,  restricted funds, on the accompanying consolidated
balance  sheet.  Repayment  of this seven year term loan is payable in  fourteen
semi-annual  installments  of  $970,900  with  a  prepayment  provision  of  any
outstanding  loan amount before cash would be available for  distribution to the
Partners.  Payments for interest of $34,236 and  principal of $105,811 were made
in December 2002.  Commitment fees of $132,917,  $139,409 and $137,818 were paid
relating to this letter of credit in 2002, 2001, and 2000, respectively.Debt Service Reserve Letter of Credit

            

     On November  22,  1994,  the  Partnership  also entered into a debt service
reserve letter of credit and reimbursement  agreement with BNP Paribas (formerly
known as Banque  Nationale de Paris)  pursuant to which a debt  service  reserve
letter of credit in the amount of  approximately  $60,000,000  was issued.  Such
agreement  has a  rolling  term  of  five  years  subject  to  extension  at the
discretion  of the banks named in the  agreement.  Drawings on the debt  service
reserve  letter of credit are  available  to pay  principal  and interest on the
First  Mortgage  Bonds,  the 1994  Tax-Exempt  Bonds and  interest  on any loans
created by  drawings on such debt  service  reserve  letter of credit.  Cash and
other  investments  held in the debt  service  reserve  account will be drawn on
prior to any drawings on the debt service  reserve letter of credit.  On January
11, 1999,  pursuant to the Disbursement  Agreement,  which outlines the order of
priority that project  funds held by the trustee are to be  disbursed,  the Debt
Service Reserve Letter of Credit was reduced to $29,925,906.

            

     BNP Paribas  notified the  Partnership on May 18, 2001 of its intention not
to extend the term of the  agreement,  which  expires on November 22, 2005.  The
Partnership has been unable to find an issuer to replace BNP Paribas which meets
the  credit  requirements  under  the  Indenture.  Pursuant  to the terms of the
Disbursement  Agreement,  available cash flows are required to be deposited on a
monthly basis beginning on May 22, 2002 into a debt service reserve account or a
tax exempt debt service reserve account,  as the case may be, until the required
balance in the debt service  reserve  account is achieved,  which is $29,858,906
per the Disbursement  Agreement.  No  distributions  are allowed to the partners
until such  balance is funded.  No funds have been  deposited as of December 31,
2002.  Commitment  fees of $409,611,  $409,611,  and $410,733  were paid on this
letter of credit in 2002, 2001, and 2000, respectively.
38
Financial Covenants

            

     In  connection  with  the  various  agreements   discussed  above,  certain
financial  covenants must be met and reported on a quarterly and/or annual basis
as required by debtors.5.   PURCHASE AGREEMENTS:Coal Purchase and Transportation Agreement

            

     The  Partnership  entered into a 30-year  purchase  contract  with Lodestar
(formerly  known as Costain Coal,  Inc.),  commencing  from the first day of the
calendar month following the Commercial  Operation Date, for the purchase of the
Facility's annual coal requirements at a price defined in the agreement, as well
as for the  disposal  of ash  residue.  The  Partnership  has no  obligation  to
purchase a minimum quantity of coal under this agreement.

            

     On June 8, 1998, the Partnership  entered into a three-year  agreement with
Lodestar, which established an arrangement for the Partnership's disposal of ash
at alternative  locations.  The Partnership also entered a three-year agreement,
with similar  terms,  with VFL Technology  Corporation  for the disposal of ash,
which expired in 2002.

            

     Lodestar  Energy,  Inc. and its parent  Lodestar  Holding,  Inc.  filed for
voluntary  Chapter 11  bankruptcy  on April 26,  2001.  On October  16, 2001 the
Partnership  and  Lodestar  agreed to and executed  Amendment  No. 3 to the Coal
Purchase Agreement.  The principal change effected in the Agreement by Amendment
No. 3 is an increase  from $26.632 to $34.00 per ton in the base coal price with
a 2%  additional  increase in the base price  effective  October 16,  2002.  The
Amendment also includes market price reopener provisions,  beginning October 16,
2003,  and a revision to Section 10.2 of the Agreement  whereby the  Partnership
shall  provide to Lodestar  for  disposal no less than fifty (50) percent and no
more than  seventy-five (75) percent of the Ash Residue produced annually at the
Facility.

            

     In  December  2002,  an order  by the  U.S.  Bankruptcy  Court  was  issued
authorizing Lodestar to sell its property at auction,  which occurred on January
30, 2003.  The Coal  Purchase and  Transportation  Agreement was included in the
property  auctioned.  A bid was made for the  property,  including the agreement
with the  Partnership.  At a court  hearing to certify the auction,  the highest
bidder rescinded their bid,  claiming  information was withheld during their due
diligence  before the  auction.  Since most of the  officers  and  directors  of
Lodestar resigned prior to the court hearing,  the judge appointed a trustee for
Lodestar  who will advise the court on the next course of action to pursue.  The
Partnership continues to receive coal shipments from Lodestar.
39
On January 28, 2003, the  Partnership  provided  written notice to Lodestar
that  Lodestar  had failed to comply with certain of its  obligations  under the
Coal Supply  Agreement as it pertains to ash disposal and that unless  remedied,
such failure of Lodestar  would  mature into an event of default  under the Coal
Supply  Agreement  and  allow  the  Partnership  to  terminate  the Coal  Supply
Agreement and seek to enforce the remedies  available to the  Partnership  under
the Coal Supply  Agreement  and  applicable  law.  Lodestar has indicated to the
Partnership that Lodestar believes that it is in compliance with its obligations
under the Coal Supply Agreement.  The Partnership  currently anticipates that if
the Coal Supply  Agreement with Lodestar is terminated for the reasons set forth
in the Partnership's notice to Lodestar or otherwise,  such termination will not
in and of itself have a material and adverse effect on the  Partnership as other
sources of coal supply and ash disposal are  available to the  Partnership.  The
Partnership  has executed a back-up coal supply  agreement  (the  "Back-up  Coal
Agreement")  and an  alternative  ash  disposal  agreement  (the  "Ash  Disposal
Agreement") with other companies. This agreement, when effective,  combined with
other current ash disposal  agreements  will allow the Partnership to dispose of
all of the  Partnership's  ash without  relying on  Lodestar.  The Back-up  Coal
Agreement  and  Ash  Disposal   Agreement  cannot  become  effective  until  the
applicable conditions under the Partnership's financing documents are satisfied.
The Partnership  currently anticipates that all applicable conditions under such
financing  documents  will be completed  in the near future and in any case,  in
advance of any potential termination of the Coal Supply Agreement.

            

     The Back-up  Coal  Agreement  was  executed on February 5, 2003 between the
Partnership  and Massey  Coal Sales,  Inc.  ("Massey").  Under the Back-up  Coal
Agreement,  Massey will provide coal under  substantially  similar  terms to the
Coal Supply Agreement should Lodestar be unable to perform under the Coal Supply
Agreement or the Coal Supply  Agreement  with Lodestar is otherwise  terminated.
The base coal price is $33.75 per ton and the term is through December 31, 2025.
The agreement also includes market price reopener provisions,  beginning October
16, 2003.

            

     The Ash  Disposal  Agreement  was  executed on February 1, 2003 between the
Partnership and VFL Technology  Corp.  ("VFL") and has a term of four years with
an option for an  additional  two years.  The  agreement  calls for the  nominal
removal of 1,000 to 1,500 tons of dry fly ash per week,  which is  approximately
50% of the fly ash produced each week,  and allows for the removal of up to 100%
of the fly ash produced at Indiantown. The disposal fee is $21.85 per ton and is
adjusted quarterly  beginning on May 1, 2003 in accordance with a Producer Price
Index,  which  includes  labor  to load  trucks,  the  transportation  vehicles,
transportation costs and disposal fee.Lime Purchase Agreement

            

     On May 1, 1992, the Partnership entered into a lime purchase agreement with
Chemical Lime Company of Alabama, Inc. ("Chemlime") for supply of the Facility's
lime requirements for the Facility's dry scrubber sulfur dioxide removal system.
The Partnership  has no obligation to purchase a minimum  quantity of lime under
the agreement. The initial term of the agreement is 15 years from the Commercial
Operation Date and may be extended for a successive 5-year period.  Either party
may cancel the agreement after January 1, 2000, upon proper notice. The price of
lime was renegotiated in 1999 for a three-year period beginning January 1, 2000.
By mutual agreement,  the contract was renegotiated on October 30, 2001, for the
period February 1, 2002 through  February 1, 2004. The base price was $56.25 per
ton to be annually adjusted per an agreed-upon formula.Railcar Lease Agreement

            

     The  Partnership  entered  into a 15 year  Car  Leasing  Agreement  with GE
Capital  Railcar   Services   Corporation  to  furnish  and  lease  72  pressure
differential  hopper railcars to the Partnership for the  transportation  of fly
ash and lime. The cars were delivered  starting in April 1995, at which time the
lease was  recorded as a capital  lease.  The leased  assets of  $5,753,375  and
accumulated  depreciation  of  $2,935,139  and  $2,551,580,   respectively,  are
included in  property,  plant and  equipment  as of December  31, 2002 and 2001.
Amortization  expense  related to the leased assets is included in  depreciation
expense.  Payments of $629,856,  including principal and interest,  were made in
2002, 2001, and 2000.
40
Future minimum payments related to the Car Leasing Agreement as of December
31, 2002 are as follows:2003                                      $629,856
       2004                                       629,856
       2005                                       629,856
       2006                                       629,856
       2007                                       629,856
       Thereafter                               1,485,055
                                                ---------
         Total minimum lease payments           4,634,335

         Interest portion of lease payable     (1,047,247)
                                               -----------
         Present value of future
         minimum lease payments                 3,587,088
         Current portion                         (383,131)
                                               -----------
         Long-term portion                     $3,203,957
                                               ===========
6.   SALES AND SERVICES AGREEMENTS:Power Purchase Agreement

            

     On May 21, 1990, the  Partnership  entered into a Power Purchase  Agreement
("PPA") with FPL for sales of the Facility's  electric output.  As amended,  the
agreement is effective  for a 30-year  period,  commencing  with the  Commercial
Operation  Date.  The pricing  structure  provides for both  capacity and energy
payments.

            

     Capacity  payments remain relatively stable because the amounts do not vary
with dispatch.  Price increases are  contractually  provided.  Capacity payments
include a bonus or penalty  payment if actual  capacity is in excess of or below
specified  levels of  available  capacity.  Energy  payments  are derived from a
contractual  formula  defined  in the  agreement  based  on the  actual  cost of
domestic coal at another FPL plant, St. Johns River Power Park.

            

Energy Services Agreement

            

     On September  30, 1992,  the  Partnership  entered into an energy  services
agreement with Caulkins  Indiantown  Citrus Company  ("Caulkins").  In September
2001,  Caulkins sold its processing plant to Louis Dreyfus Citrus, Inc. ("LDC").
Commencing  on the  Commercial  Operation  Date and  continuing  throughout  the
15-year  term of the  agreement,  LDC is required to purchase  the lesser of 525
million  pounds  of steam  per year or the  minimum  quantity  of steam per year
necessary for the Facility to maintain its status as a Qualifying Facility under
PURPA. The Facility declared Commercial Operation with LDC on March 1, 1996.
41
7.   RELATED PARTY TRANSACTIONS:Management Services Agreement

            

     The  Partnership  has a  Management  Services  Agreement  with NEG, for the
day-to-day management and administration of the Partnership's  business relating
to the Facility. The agreement commenced on September 30, 1992 and will continue
through  August 31, 2026.  Compensation  to NEG under the agreement  includes an
annual  base fee of  $650,000  (adjusted  annually  and is  subordinate  to debt
service and certain  other costs),  wages and benefits for employees  performing
work on behalf  of the  Partnership  and other  costs  directly  related  to the
Partnership.  Base fees of $578,468  were  subordinated  in 2002 pursuant to the
Disbursement Agreement.  Payments of $3,122,371,  $4,167,428, and $4,324,042, in
2002, 2001, and 2000 were made to NEG, respectively. As of December 31, 2002 and
2001, the Partnership  owed NEG $774,260 and $315,730,  respectively,  which are
included  in  accounts  payable  and  accrued  liabilities  in the  accompanying
consolidated balance sheets.Operations and Maintenance Agreement

     The Partnership  has an Operation and  Maintenance  Agreement with PG&E
OSC, for the operations and maintenance of the Facility for a period of 30 years
(starting September 30, 1992).  Thereafter,  the agreement will be automatically
renewed for periods of 5 years until  terminated  by either party with 12 months
notice.  If  targeted  plant  performance  is not  reached  on a monthly  basis,
PG&E OSC will pay liquidated  damages to the  Partnership.  Compensation  to
PG&E OSC under the agreement  includes an annual base fee of which a portion
is subordinate to debt service and certain other costs,  certain earned fees and
bonuses based on the Facility's  performance and reimbursement for certain costs
including payroll,  supplies,  spare parts, equipment,  certain taxes, licensing
fees,  insurance  and indirect  costs  expressed as a percentage  of payroll and
personnel  costs.  The fees are adjusted  quarterly by a measure of inflation as
defined in the  agreement.  Base fees of $1,038,136  and earned fees of $343,421
were  subordinated in 2002 pursuant to the Disbursement  Agreement.  Payments of
$7,106,438,  $9,326,634, and $9,921,638 were made to PG&E OSC in 2002, 2001,
and 2000,  respectively.  As of December 31, 2002 and 2001, the Partnership owed
PG&E  OSC  $2,067,724  and  $683,897,  respectively,  which is  included  in
accounts  payable  and  accrued  liabilities  in the  accompanying  consolidated
balance sheets.Distribution to Partners

            

     There were no  distributions  made to the  Partners in 2002.  Distributions
totaling $12,400,000 and $25,400,000 were made to the Partners in 2001 and 2000,
respectively.
42
8.   FAIR VALUE OF FINANCIAL INSTRUMENTS
        -----------------------------------

        The following table presents the carrying amounts and estimated fair values of certain of the
Partnership's financial instruments as of December 31, 2002 and 2001.

                                    December 31, 2002
------------------------------------------------------------------------------------------------------
          Financial Liabilities                     Carrying Amount                    Fair Value
          ---------------------                     ---------------                    ----------

        Tax Exempt Bonds                             $125,010,000                     $161,523,856
        First Mortgage Bonds                         $432,107,562                     $564,928,712


                                    December 31, 2001
------------------------------------------------------------------------------------------------------
          Financial Liabilities                     Carrying Amount                    Fair Value
          ---------------------                     ---------------                    ----------

        Tax Exempt Bonds                             $125,010,000                     $130,409,212
        First Mortgage Bonds                         $443,567,970                     $447,410,766
For the Tax Exempt Bonds and First Mortgage  Bonds,  the fair values of the
Partnership's  bonds payable are based on the current  market  interest rates to
estimate market values for the Tax Exempt Bonds and the First Mortgage Bonds.

            

     The  carrying  amounts  of the  Partnership's  cash and  cash  equivalents,
accounts receivable,  deposits,  prepaid expenses,  investments held by trustee,
accounts payable and accrued  liabilities and accrued interest  approximate fair
value, due to their short-term nature.9.   FOURTH QUARTER ADJUSTMENTS (UNAUDITED)

            

     In the  three-months  ended  December 31, 2002,  the  Partnership  recorded
additional  electric  energy revenue of $1,514,174  for additional  2002 payment
estimated to be due from FPL in conjunction with the annual fuel audit conducted
in the fourth quarter and performed under the PPA. The Partnership also recorded
additional  electric  energy revenue of $1,218,890  for additional  payments due
from FPL  related to the  reconciliation  of the  quarterly  unit  energy  costs
calculations in 2002 under the PPA.Item 9   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          
ACCOUNTING AND FINANCIAL DISCLOSURE

            


        None.
43
PART III
Item 10   DIRECTORS AND EXECUTIVE OFFICERS

Indiantown Cogeneration, L.P. Board of Control

     The following table sets forth the names, ages and positions of the members
of the Board of Control of the Partnership.  Members of the Board of Control are
selected from time to time by, and serve at the pleasure of, the Partners of the
Partnership.

                        Name                  Age                Position
                        ----                  ---                --------
     Scot A. Garner.................          33          Palm Representative and
                                                          Thaleia Representative
     Thomas F. Schwartz ............          41          Palm Representative and
                                                          Thaleia Representative
     P. Chrisman Iribe..............          52          IPILP Representative
     Sanford L. Hartman.............          49          IPILP Representative

Scot A. Garner is Vice President - Asset  Management for Cogentrix  Energy,
Inc. and has been with Cogentrix since 1999. Prior to joining  Cogentrix Energy,
Inc.,  Mr. Garner spent two years as a financial  analyst at an electric and gas
utility company. Mr. Garner holds a B.S. degree in mathematical economics and an
M.B.A. from Wake Forest University.

            

     Thomas F. Schwartz is Senior Vice President and Chief Financial  Officer of
Cogentrix Energy,  Inc. He is responsible for the areas of corporate finance and
tax planning.  Mr. Schwartz joined Cogentrix Energy,  Inc. in 1991, and has held
various positions in accounting and finance.  Prior to joining Cogentrix Energy,
Inc., Mr.  Schwartz was Audit Manager with Arthur  Andersen,  LLP. Mr.  Schwartz
holds a B.A.  degree in  accounting  from the  University  of North  Carolina  -
Charlotte.

            

     P. Chrisman  Iribe has been  Executive  Vice  President of NEG, Inc.  since
December  2002.  Prior to that he was  President  and Chief  Operating  Officer,
Eastern  Region since July 2000. He has also served as Senior Vice  President of
PG&E  Corporation  since December 16, 1998. Mr. Iribe  previously  served as
President and Chief Operating  Officer of PG&E  Generating  Company,  one of
NEG, Inc. subsidiaries,  from November 1998 to January 2000. From September 1997
to November  1998,  Mr.  Iribe  served as  Executive  Vice  President  and Chief
Executive  Officer  of  PG&E  Generating  Company  (formerly  known  as U.S.
Generating  Company).  Mr. Iribe held various other executive  positions  within
U.S.  Generating  Company  from 1989 to  September  1997.  Prior to Mr.  Iribe's
joining  U.S.  Generating  Company in 1989,  he was senior  vice  president  for
planning,  state relations and public affairs at ANR Pipeline Company, a natural
gas pipeline  company.  Mr. Iribe holds a B.A.  degree in Economics  from George
Washington University.

            

     Sanford L. Hartman has been Vice  President  and Chief Counsel of NEG, Inc.
since  December  2002.  From March of 1999 until  December 2002, Mr. Hartman was
Vice President and General Counsel of PG&E  Generating,  now a subsidiary of
NEG, Inc. From March 1999 until December 2002, he was NEG, Inc.'s Vice President
and Associate  General  Counsel.  Mr. Hartman has been employed by NEG, Inc. and
its  predecessors  and  subsidiaries  since 1990.  Prior to joining  NEG,  Inc.,
Hartman  was  counsel to Long Lake  Energy  Corporation,  an  independent  power
producer  with  headquarters  in New York City and was an attorney  with Bishop,
Cook, Purcell & Reynolds, a Washington,  D.C., law firm. Mr. Hartman has a BA in
Political Science from Drew University and a JD from Temple University.44
ICL Funding Corporation Board of Directors

            

     The  following  table  sets  forth the  names,  ages and  positions  of the
directors and executive officers of ICL Funding.  Directors are elected annually
and each elected  director  holds office until a successor is elected.  Officers
are elected from time to time by vote of the Board of Directors.Name                     Age         Position
           -----                  ------        ---------
        P. Chrisman Iribe           52          Director, President
        Sanford L. Hartman          49          Director
        Thomas E. Legro             51          Vice President, Controller and
                                                Chief Accounting Officer
Item 11   REMUNERATION OF DIRECTORS AND OFFICERS

     No cash compensation or non-cash compensation was paid in any prior year or
is currently  proposed to be paid in the current calendar year by ICL Funding or
the Partnership to any of the officers and directors listed above.  Accordingly,
the Summary  Compensation  Table and other tables required under Item 402 of the
Securities  and  Exchange  Commission's  Regulation  S-K have been  omitted,  as
presentation of such tables would not be meaningful.

            

     Management  services for the  Partnership  are being  performed by NEG on a
cost-plus  basis  in  addition  to the  payment  of a base  fee.  Operation  and
maintenance  services for the Partnership will be performed by PG&E OSC on a
cost-plus  basis.  In  addition  to a base fee,  PG&E  OSC may earn  certain
additional fees and bonuses based on specified performance criteria.Item 12   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
        
               AND MANAGEMENT

            

     Partnership interests in the Partnership, as of December 31, 2002, are held
as follows:
Toyan                30.05% L.P.
                      IPILP                19.95% G.P.
                      Palm                 10.00% G.P.
                      Thaleia              40.00% L.P.
All of the  outstanding  shares of common stock of ICL Funding are owned by
the Partnership.
45
Item 13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            

     The Partnership has several  material  contracts with affiliated  entities.
These  contracts,  which  include  the  Construction  Contract,  the  Management
Services Agreement and the Operations and Maintenance  Agreement,  are described
elsewhere  in  this  report,  most  notably  in  Note  7  to  the  Partnership's
consolidated financial statements.Item 14        CONTROLS AND PROCEDURES

            

     Based  on an  evaluation  of  the  Partnership's  disclosure  controls  and
procedures  conducted on February 6, 2003, the principal  executive  officer and
principal  financial  officer of Indiantown  Cogeneration,  L.P. and  Indiantown
Cogeneration   Funding   Corporation  have  concluded  that  such  controls  and
procedures  effectively ensure that information  required to be disclosed by the
Partnership in reports the Partnership files or submits under the Securities and
Exchange Act of 1934 is recorded,  processed,  summarized,  and reported, within
the time periods specified in the SEC's rules and forms.

            

     There were no significant  changes in internal controls or in other factors
that could  significantly  affect these controls subsequent to the date of their
evaluation.
46
PART IV

Item 15  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
         ----------------------------------------------------------------

   a) Documents filed as of this Report                                   Page
                                                                          ----
         (1)    Consolidated financial statements:

                Report of Independent Auditors..........................   23

                Consolidated Balance Sheets as of
                December 31, 2002 and 2001 ............................    25

                Consolidated Statements of Operations for the years
                ended December 31, 2002, 2001 and 2000.................    27

                Consolidated Statements of Changes
                in Partners' Capital for the years ended
                December 31, 2002, 2001 and 2000......................     28

                Consolidated Statements of Cash Flows for the
                years ended December 31, 2002, 2001 and 2000..........     29

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

               (2)    Consolidated Financial Statement
                      Schedules........................................  None

        b) Reports on Form 8-K:


The  Partnership  filed a Report  on Form 8-K on March 3,  2003  announcing  the
execution  of a back-up  coal supply  agreement  and an  alternate  ash disposal
agreement.


c) Exhibits:

      Exhibit
        No.                                Description
        ---                                -----------
        3.1       Certificate of Incorporation of Indiantown Cogeneration Funding Corporation.*

        3.2       By-laws of Indiantown Cogeneration Funding Corporation.*

        3.3       Certificate of Limited Partnership of Indiantown Cogeneration, L.P.*

        3.4       Amended and Restated Limited Partnership  Agreement of Indiantown  Cogeneration,  L.P., among
                  Palm Power Corporation, Toyan Enterprises and TIFD III-Y Inc.*

        3.5       Form of First Amendment to Amended and Restated Limited  Partnership  Agreement of Indiantown
                  Cogeneration, L.P.*
47
3.6       Dana Amendment to Amended and Restated  Limited  Partnership  Agreement of Indiantown  Cogeneration,
                    L.P.*****

          3.7       Cogentrix   Amendment  to  Amended  and  Restated  Limited   Partnership   Agreement  of  Indiantown
                    Cogeneration, L.P.*****

          3.8       Third Amendment to Amended and Restated Limited  Partnership  Agreement of Indiantown  Cogeneration,
                    L.P.*****

          4.1       Trust Indenture,  dated as of November 1, 1994, among Indiantown  Cogeneration  Funding Corporation,
                    Indiantown Cogeneration,  L.P., and NationsBank of Florida, N.A., as Trustee, and First Supplemental
                    Indenture thereto.**

          4.2       Amended and  Restated  Mortgage,  Assignment  of Leases,  Rents,  Issues and  Profits  and  Security
                    Agreement and Fixture Filing among Indiantown  Cogeneration,  L.P., as Mortgagor,  and Bankers Trust
                    Company as Mortgagee,  and NationsBank of Florida,  N.A., as Disbursement  Agent and, as when and to
                    the extent set forth  therein,  as Mortgagee  with respect to the Accounts,  dated as of November 1,
                    1994.**

          4.3       Assignment and Security  Agreement between  Indiantown  Cogeneration,  L.P., as Debtor,  and Bankers
                    Trust Company as Secured Party,  and  NationsBank of Florida,  N.A., as  Disbursement  Agent and, as
                    when, and to the extent set forth therein, a Secured Party with respect to the Accounts, dated as of
                    November 1, 1994.**

          10.1.1    Amended and Restated Indenture of Trust between Martin County Industrial Development  Authority,  as
                    Issuer, and NationsBank of Florida, N.A., as Trustee, dated as of November 1, 1994.**

          10.1.2    Amended and Restated  Authority Loan Agreement by and between Martin County  Industrial  Development
                    Authority and Indiantown Cogeneration, L.P., dated as of November 1, 1994.**

          10.1.3    Letter of Credit and Reimbursement Agreement among Indiantown  Cogeneration,  L.P., as Borrower, and
                    the Banks Named Therein, and Credit Suisse, as Agent, dated as of November 1, 1994.**

          10.1.4    Disbursement  Agreement,  dated  as of  November  1,  1994,  among  Indiantown  Cogeneration,  L.P.,
                    Indiantown  Cogeneration Funding Corporation,  NationsBank of Florida,  N.A., as Tax-Exempt Trustee,
                    NationsBank  of Florida,  N.A., as Trustee,  Credit  Suisse,  as Letter of Credit  Provider,  Credit
                    Suisse,  as Working Capital  Provider,  Banque Nationale de Paris, as Debt Service Reserve Letter of
                    Credit Provider,  Bankers Trust Company, as Collateral Agent,  Martin County Industrial  Development
                    Authority, and NationsBank of Florida, N.A., as Disbursement Agent.**

          10.1.5    Revolving  Credit Agreement among Indiantown  Cogeneration,  L.P., as Borrower,  and the Banks Named
                    Therein, and Credit Suisse, as Agent, dated as of November 1, 1994.**
48
10.1.6    Collateral  Agency and Intercreditor  Agreement,  dated as of November 1, 1994, among NationsBank of
                    Florida,  N.A., as Trustee under the Trust Indenture,  dated as of November 1, 1994,  NationsBank of
                    Florida,  N.A., as Tax-Exempt Trustee under the Tax Exempt Indenture,  dated as of November 1, 1994,
                    Credit Suisse,  as letter of Credit Provider,  Credit Suisse,  as Working Capital  Provider,  Banque
                    Nationale de Paris,  as Debt Service  Reserve Letter of Credit  Provider,  Indiantown  Cogeneration,
                    L.P., Indiantown  Cogeneration Funding Corporation,  Martin County Industrial Development Authority,
                    NationsBank of Florida,  N.A., as Disbursement  Agent under the  Disbursement  Agreement dated as of
                    November 1, 1994, and Bankers Trust Company, as Collateral Agent.**

          10.1.7    Amended  and  Restated  Equity Loan  Agreement  dated as of  November  1, 1994,  between  Indiantown
                    Cogeneration, L.P., as the Borrower, and TIFD III-Y Inc., as the Equity Lender.**

          10.1.8    Equity Contribution Agreement, dated as of November 1, 1994, between TIFD III-Y Inc. and NationsBank
                    of Florida, N.A., as Disbursement Agent.**

          10.1.9    GE Capital  Guaranty  Agreement,  dated as of November 1, 1994,  between  General  Electric  Capital
                    Corporation, as Guarantor, and NationsBank of Florida, N.A., as Disbursement Agent.**

          10.1.11   Debt Service Reserve Letter of Credit and  Reimbursement  Agreement among  Indiantown  Cogeneration,
                    L.P., as Borrower, and the Banks Named Therein, and Banque Nationale de Paris, as Agent, dated as of
                    November 1, 1994.**

          10.2.18   Amendment No. 2 to Coal Purchase Agreement, dated as of April 19, 1995.***

          10.2.19   Fourth Amendment to Energy Services Agreement, dated as of January 30, 1996.****

          10.2.20   Third  Amendment to the Agreement for the Purchase of Firm Capacity and Energy,  dated as of May 17,
                    2001.******

          10.2.21   Third Amendment to Coal Purchase Agreement, dated as of November 2, 2001.*******

          10.2.22   Dry Scrubber Ash Service Agreement, dated as of February 1, 2003.

          10.2.23   Back-up Coal Purchase and Sale Agreement, dated as of February 5, 2003.

          21        Subsidiaries of Registrant*

          99        Copy of Registrants' press release dated January 3, 1996.****

          99.1      Certification of P. Chrisman Iribe pursuant to 18 U.S.C. Section 1350 dated March 31, 2003

          99.2      Certification of Thomas E. Legro pursuant to 18 U.S.C. Section 1350 dated March 31, 2003
49
99.3      Certification of P. Chrisman Iribe pursuant to 18 U.S.C. Section 1350 dated March 31, 2003

        99.4      Certification of Thomas E. Legro pursuant to 18 U.S.C. Section 1350 dated March 31, 2003



______________________________

*  Incorporated  by  reference  from the  Registrant  Statement  on Form S-1, as
amended,  file no. 33-82034 filed by the Registrants  with the SEC in July 1994.
**  Incorporated  by reference from the quarterly  report on Form 10-Q, file no.
33-82034 filed by the Registrants with the SEC in December 1994.

***  Incorporated by reference from the quarterly  report on Form 10-Q, file no.
33-82034 filed by the Registrants with the SEC in May 1995. **** Incorporated by
reference  from the current  report on Form 8-K, file no.  33-82034 filed by the
Registrants with the SEC in January 1996.

*****  Incorporated by reference from the quarterly report on Form 10-Q file no.
33-82034  filed  by  the  Registrants  with  the  SEC  in  August  1999.  ******
Incorporated  by reference from the current report on Form 8-K file no. 33-82034
filed by the Registrants with the SEC in January 2001.

*******  Incorporated  by reference from the current report on Form 8-K file no.
33-82034 filed by the Registrants with the SEC in November 2001.
50
SIGNATURE

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  co-registrant  has duly caused this Form 10-K to be signed on its behalf by
the undersigned,  thereunto duly authorized,  in the city of Bethesda,  state of
Maryland, on March 31, 2003.

                                         INDIANTOWN COGENERATION, L.P.


Date:  March 31, 2003                     /s/ Thomas E. Legro
                                          -----------------------------------
                                          Name: Thomas E. Legro
                                          Title: Vice President, Controller and
                                          Principal Accounting Officer

          Pursuant to the  requirements of the Securities Act of 1933, this Form
10-K has been signed by the following persons in the capacities and on the dates
indicated.

Signature                                Title                              Date
---------                                -----                              ----


/s/ P. Chrisman Iribe               Member of Board of Control,        March 31, 2003
----------------------              President and Secretary
P. Chrisman Iribe

/s/ Thomas E. Legro                 Vice President, Controller         March 31, 2003
-------------------                 and Principal Accounting
Thomas E. Legro                     Officer

/s/ Scot A. Garner                  Member of Board of Control         March 31, 2003
----------------------
Scot A. Garner

/s/ Thomas F. Schwartz              Member of Board of Control         March 31, 2003
----------------------
Thomas F. Schwartz

/s/ Sanford L. Hartman              Member of Board of Control         March 31, 2003
----------------------              and Senior Vice President
Sanford L. Hartman
51
SIGNATURE

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  co-registrant  has duly caused this Form 10-K to be signed on its behalf by
the undersigned,  thereunto duly authorized,  in the city of Bethesda,  state of
Maryland, on March 31, 2003.

                                             INDIANTOWN COGENERATION
                                             FUNDING CORPORATION

Date:  March 31, 2003                        /s/ Thomas E. Legro
                                             -----------------------------------
                                             Name: Thomas E. Legro
                                             Title: Vice President, Controller and Chief
                                             Accounting Officer


          Pursuant to the  requirements of the Securities Act of 1933, this Form
10-K has been signed by the following persons in the capacities and on the dates
indicated.

Signature                                  Title                                     Date
---------                                  -----                                     ----

/s/ P. Chrisman Iribe               Director and President                    March 31, 2003
----------------------
P. Chrisman Iribe

/s/ Thomas E. Legro                 Vice President, Controller                March 31, 2003
----------------------              and Chief Accounting Officer
Thomas E. Legro
52
CERTIFICATION OF P. CHRISMAN IRIBE, PRINCIPAL EXECUTIVE OFFICER,
                          PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, P. Chrisman Iribe, certify that:

1.   I have reviewed this annual report on Form 10-K of Indiantown Cogeneration,
     L.P.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures  within 90 days prior to the filing date of this annual
          report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: March 31, 2003



                                               /s/ P. CHRISMAN IRIBE
                                               ----------------------
                                               P. Chrisman Iribe
                                               President
                                               Indiantown Cogeneration, L.P.
53
CERTIFICATION OF THOMAS E. LEGRO, PRINCIPAL FINANCIAL OFFICER,
           PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, Thomas E. Legro, certify that:

1.   I have reviewed this annual report on Form 10-K of Indiantown Cogeneration,
     L.P.;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures  within 90 days prior to the filing date of this annual
          report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):


     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: March 31, 2003

                                         /s/ THOMAS E. LEGRO
                                         -------------------------------------
                                         Thomas E. Legro
                                         Vice President, Controller and Principal Accounting
                                         Officer
                                         Indiantown Cogeneration, L.P.

                                       54
CERTIFICATION OF P. CHRISMAN IRIBE, PRINCIPAL EXECUTIVE OFFICER,
           PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002


I, P. Chrisman Iribe, certify that:

1.   I have reviewed this annual report on Form 10-K of Indiantown  Cogeneration
     Funding Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures  within 90 days prior to the filing date of this annual
          report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: March 31, 2003

                                             /s/ P. CHRISMAN IRIBE
                                             ---------------------------------
                                             P. Chrisman Iribe
                                             President
                                             Indiantown Cogeneration Funding Corporation
55

CERTIFICATION OF THOMAS E. LEGRO, PRINCIPAL FINANCIAL OFFICER,
         PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, Thomas E. Legro, certify that:

1.   I have reviewed this annual report on Form 10-K of Indiantown  Cogeneration
     Funding Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures  within 90 days prior to the filing date of this annual
          report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: March 31, 2003



                                                /s/ THOMAS E. LEGRO
                                                --------------------------------
                                                Thomas E. Legro
                                                Vice President, Controller and Chief Accounting
                                                Officer
                                                Indiantown Cogeneration Funding Corporation
56
EXHIBIT INDEX

Exhibit No.  Description
---          -----------

3.1       Certificate  of  Incorporation  of  Indiantown   Cogeneration  Funding
          Corporation.*

3.2       By-laws of Indiantown Cogeneration Funding Corporation.*

3.3       Certificate of Limited Partnership of Indiantown Cogeneration, L.P.*

3.4       Amended and  Restated  Limited  Partnership  Agreement  of  Indiantown
          Cogeneration,  L.P., among Palm Power  Corporation,  Toyan Enterprises
          and TIFD III-Y Inc.*

3.5       Form of First  Amendment to Amended and Restated  Limited  Partnership
          Agreement of Indiantown Cogeneration, L.P.*

3.9       Dana Amendment to Amended and Restated Limited  Partnership  Agreement
          of Indiantown Cogeneration, L.P.*****

3.10      Cogentrix  Amendment  to  Amended  and  Restated  Limited  Partnership
          Agreement of Indiantown Cogeneration, L.P.*****

3.11      Third Amendment to Amended and Restated Limited Partnership  Agreement
          of Indiantown Cogeneration, L.P.*****

4.1       Trust  Indenture,  dated as of  November  1,  1994,  among  Indiantown
          Cogeneration Funding Corporation,  Indiantown Cogeneration,  L.P., and
          NationsBank  of  Florida,  N.A.,  as Trustee,  and First  Supplemental
          Indenture thereto.**

4.2       Amended and Restated Mortgage, Assignment of Leases, Rents, Issues and
          Profits and Security  Agreement  and Fixture  Filing among  Indiantown
          Cogeneration,  L.P.,  as  Mortgagor,  and  Bankers  Trust  Company  as
          Mortgagee,  and NationsBank of Florida,  N.A., as  Disbursement  Agent
          and, as when and to the extent set forth  therein,  as Mortgagee  with
          respect to the Accounts, dated as of November 1, 1994.**

4.3       Assignment and Security  Agreement  between  Indiantown  Cogeneration,
          L.P.,  as Debtor,  and Bankers  Trust  Company as Secured  Party,  and
          NationsBank of Florida,  N.A., as Disbursement Agent and, as when, and
          to the extent set forth  therein,  a Secured Party with respect to the
          Accounts, dated as of November 1, 1994.**

10.1.1    Amended  and  Restated   Indenture  of  Trust  between  Martin  County
          Industrial  Development  Authority,  as  Issuer,  and  NationsBank  of
          Florida, N.A., as Trustee, dated as of November 1, 1994.**

10.1.2    Amended and Restated  Authority  Loan  Agreement by and between Martin
          County Industrial  Development Authority and Indiantown  Cogeneration,
          L.P., dated as of November 1, 1994.**
57
10.1.3    Letter  of  Credit  and   Reimbursement   Agreement  among  Indiantown
          Cogeneration,  L.P.,  as Borrower,  and the Banks Named  Therein,  and
          Credit Suisse, as Agent, dated as of November 1, 1994.**

10.1.4    Disbursement Agreement, dated as of November 1, 1994, among Indiantown
          Cogeneration,   L.P.,  Indiantown  Cogeneration  Funding  Corporation,
          NationsBank of Florida,  N.A., as Tax-Exempt  Trustee,  NationsBank of
          Florida,  N.A.,  as  Trustee,  Credit  Suisse,  as  Letter  of  Credit
          Provider, Credit Suisse, as Working Capital Provider, Banque Nationale
          de Paris, as Debt Service Reserve Letter of Credit  Provider,  Bankers
          Trust  Company,   as  Collateral   Agent,   Martin  County  Industrial
          Development   Authority,   and   NationsBank  of  Florida,   N.A.,  as
          Disbursement Agent.**

10.1.5    Revolving  Credit Agreement among  Indiantown  Cogeneration,  L.P., as
          Borrower,  and the Banks Named Therein,  and Credit Suisse,  as Agent,
          dated as of November 1, 1994.**

10.1.6    Collateral Agency and Intercreditor Agreement, dated as of November 1,
          1994, among  NationsBank of Florida,  N.A., as Trustee under the Trust
          Indenture, dated as of November 1, 1994, NationsBank of Florida, N.A.,
          as  Tax-Exempt  Trustee  under the Tax Exempt  Indenture,  dated as of
          November 1, 1994, Credit Suisse, as letter of Credit Provider,  Credit
          Suisse,  as Working Capital  Provider,  Banque  Nationale de Paris, as
          Debt   Service   Reserve   Letter  of  Credit   Provider,   Indiantown
          Cogeneration,   L.P.,  Indiantown  Cogeneration  Funding  Corporation,
          Martin  County  Industrial  Development   Authority,   NationsBank  of
          Florida,  N.A., as Disbursement Agent under the Disbursement Agreement
          dated as of November 1, 1994, and Bankers Trust Company, as Collateral
          Agent.**

10.1.7    Amended and  Restated  Equity Loan  Agreement  dated as of November 1,
          1994, between Indiantown Cogeneration, L.P., as the Borrower, and TIFD
          III-Y Inc., as the Equity Lender.**

10.1.8    Equity Contribution  Agreement,  dated as of November 1, 1994, between
          TIFD III-Y Inc. and  NationsBank  of Florida,  N.A.,  as  Disbursement
          Agent.**

10.1.9    GE Capital Guaranty  Agreement,  dated as of November 1, 1994, between
          General Electric Capital Corporation, as Guarantor, and NationsBank of
          Florida, N.A., as Disbursement Agent.**

10.1.11   Debt  Service  Reserve  Letter of Credit and  Reimbursement  Agreement
          among Indiantown Cogeneration,  L.P., as Borrower, and the Banks Named
          Therein, and Banque Nationale de Paris, as Agent, dated as of November
          1, 1994.**

10.2.18   Amendment  No. 2 to Coal  Purchase  Agreement,  dated as of April  19,
          1995.***

10.2.19   Fourth Amendment to Energy Services Agreement, dated as of January 30,
          1996.****

10.2.20   Third Amendment to the Agreement for the Purchase of Firm Capacity and
          Energy, dated as of May 17, 2001.******
58
10.2.21   Third  Amendment to Coal Purchase  Agreement,  dated as of November 2,
          2001.*******

10.2.22   Dry Scrubber Ash Service Agreement, dated as of February 1, 2003.

10.2.23   Back-up  Coal  Purchase  and Sale  Agreement,  dated as of February 5,
          2003.

21        Subsidiaries of Registrant*

99        Copy of Registrants' press release dated January 3, 1996.****

99.1      Certification of P. Chrisman Iribe pursuant to 18 U.S.C.  Section 1350
          dated March 31, 2003

99.2      Certification  of Thomas E. Legro  pursuant to 18 U.S.C.  Section 1350
          dated March 31, 2003

99.3      Certification of P. Chrisman Iribe pursuant to 18 U.S.C.  Section 1350
          dated March 31, 2003

99.4      Certification  of Thomas E. Legro  pursuant to 18 U.S.C.  Section 1350
          dated March 31, 2003