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, 2001

                         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)

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. [ ]

As of April 1,  2002,  there  were 100  shares  of  common  stock of  Indiantown
Cogeneration Funding Corporation, $1 par value outstanding.Indiantown Cogeneration, L.P.
             Indiantown Cogeneration Funding CorporationPART 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 Stock 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        Qualitative and Quantitative Disclosures About
               Market Risk..................................................16

Item 8         Financial Statements and Supplementary Data..................17

Item 9         Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure.......................39

                                    PART III
                                    --------

Item 10        Directors and Executive Officers.............................40

Item 11        Remuneration of Directors and Officers.......................41

Item 12        Security Ownership of Certain Beneficial Owners
               and Management...............................................41

Item 13        Certain Relationships and Related Transactions...............42


                                    PART IV
                                    -------
Item 14        Exhibits, Financial Statement Schedules and

               Reports on Form 8-K.........................................43

               Signatures..................................................47
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 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 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,
TIFD and IPILP and Thaleia (collectively, the "Partners") based on the following
ownership percentages:
1
Toyan              30.05%
                                         Palm               10%*
                                        IPILP              19.95%
                                         TIFD                --
                                       Thaleia              40%*
*Now beneficially owned by Cogentrix.

          
     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 20, 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.

          


     December 2000, and in January and February 2001,  PG&E  Corporation and
NEG    completed   a   corporate    restructuring    of   NEG,    known   as   a
ringfencing   transaction.  The  ringfencing  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. After
the ringfencing  structure was  implemented,  two independent  rating  agencies,
Standard and Poors and Moodys  Investor  Services issued  investment
grade ratings for NEG and reaffirmed such ratings for certain NEG  subsidiaries.
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.  On September 20,
2001,   the  Utility  and  PG&E   Corporation   jointly   filed  a  plan  of
reorganization   that  entails   separating   the  Utility  into  four  distinct
businesses.  The plan of  reorganization  does not directly affect NEG or any of
its  subsidiaries.  Subsequent to the bankruptcy  filing,  the investment  grade
ratings  of NEG and its rated  subsidiaries  were  reaffirmed  on April 6 and 9,
2001.  NEG'S  mananagement  believes  that  NEG  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

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.Certain Project Contracts

          
     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  provide
approximately 99% of Partnership revenues. 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.
          

     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.  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
two-year  period are not expected to be  sufficient  to cover the  Partnership's
variable costs of electric energy production due to a mismatch of 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.

          

     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).
3
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.

          

     As previously reported,  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 is 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.

          

     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 will
reduce 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.

          

     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.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.
4


Business Strategy and Outlook


          
     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.  The  Facility  commenced  commercial  operation on
December 22, 1995 and  completed  its sixth full  calendar  year of operation on
December 31, 2001.

          
     During 2001, the Facility  produced  2,276,568  MW-hr of energy for sale to
FPL compared to 2,343,677  MW-hr in 2000.  This decrease was due primarily to an
unplanned  extension to the scheduled outage in November 2001 to make repairs to
the generator.


          
     The Facility produced approximately 658 million pounds of steam for sale to
LDC in 2001  compared  to  approximately  649  million  pounds  in 2000  thereby
continuing to exceed the minimum  requirements to maintain  Qualifying  Facility
status.

          

     The Facility ended the year with a twelve-month  rolling  average  Capacity
Billing  Factor of 89.869% in 2001 and  98.636% in 2000.  The  Capacity  Billing
Factor measures the overall  availability  of the Facility,  but gives a heavier
weighting to on-peak  availability.  Cash flows during 2001 were  sufficient  to
fund all operating expenses and debt repayment obligations.

          

     The Facility is planning on ten weeks of scheduled  outages  during 2002 to
perform routine  inspections  and maintenance and make permanent  repairs to the
generator.  The primary  outage is  scheduled  for  September  15, 2002  through
November 9, 2002, which is before or at the beginning of citrus production.


          
     In the  absence  of any major  equipment  failures,  unit  availability  is
expected to be above the 2001 levels. However, capacity bonuses will be lower in
2002 since the  Capacity  Billing  Factor  will  remain low for most of the year
primarily  due to the unplanned  extension to the  scheduled  outage in November
2001 for generator repairs.


          
     The  Partnership  believes  that its current  financial  resources  will be
adequate to cover operating expenses and debt repayment obligations in 2002.

     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.  Certain  of these  letters of credit  have been  issued
pursuant  to  a  Letter  of  Credit  and  Reimbursement  Agreement  with  Credit
Suisse/First  Boston (formerly known as Credit Suisse) and the remaining letters
of credit will be issued when required under the Project  Contracts,  subject to
conditions  contained in such Letter of Credit and Reimbursement  Agreement.  In
September  2001,  Credit  Suisse/First  Boston  notified the  Partnership of its
intention not to extend the term of these agreements, which are due to expire in
the fourth  quarter of 2002.  The  Partnership  expects to obtain a  replacement
letter of credit provider before the current letters of credit expire.
5
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.
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.  Pursuant to the terms of the Disbursement  Agreement,  if
the Partnership is unsuccessful in its continuing  effort to effect an extension
of the agreement or replace the agreement, available cash flows will begin 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 Maximum Balance is achieved.Forward Looking Statements

          

     When used in this  report,  words or  phrases  that are  predictions  of or
indicate  future  events  and  trends  are  subject  to a number  of  risks  and
uncertainties  which could cause actual results to differ  materially from those
projected.  Given such  uncertainties,  readers are cautioned not to place undue
reliance  on such  statements.  The  Partnership  undertakes  no  obligation  to
publicly  update or revise any  forward-looking  statement to reflect current or
future events or circumstances.Governmental Approvals

          

     The  Partnership  has  obtained  all  material  environmental  permits  and
approvals  required,  as of December 31, 2001,  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 DEP 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.  The
remaining modifications remain under review with DEP.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").  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.
6
Item 3  LEGAL    PROCEEDINGSDispute with FPL

          

     On March 19, 1999,  the  Partnership  filed a complaint  against FPL in the
United States  District  Court for the Middle  District of Florida.  The lawsuit
stemmed  from a course  of  action  pursued  by FPL in which  FPL  purported  to
exercise its dispatch and control rights under the Power Purchase Agreement in a
manner  which the  Partnership  believes  violated  the terms of the power sales
agreement.  In its  complaint,  the  Partnership  charged  that such conduct was
deliberately  calculated  to cause  the  Partnership  to be  unable  to meet the
requirements  to maintain the Facility's  status as a Qualifying  Facility under
the Public Utility Regulatory Policies Act of 1978. Since the loss of Qualifying
Facility  status  may  result in an event of  default  under the Power  Purchase
Agreement, the Partnership took action to address this matter.

          

     On May 17, 2001, the Partnership and FPL executed an amendment to the power
purchase  agreement to settle the litigation then pending in federal court.  The
amendment  was filed for  approval  by the  Florida  Public  Service  Commission
("FPSC")  on June 7,  2001.  On  October  11,  2001,  the FPSC  issued  an order
approving  the  amendment.  At that time,  the FPSC's  action was  subject to an
appeal period,  which expired on November 12, 2001. In addition,  the conditions
set forth in the Indenture for the Bonds have been met.

          

     An outline of the business  terms set forth in the amendment  provides that
if the  Facility is  off-line  for any reason,  the  Partnership  shall have the
right,  upon  up to 6  hours  notice  and  subject  only to  safety  and  system
reliability  issues,  to reconnect to FPL's system and produce up to 100 MW. The
amendment  provides that if this occurs when FPL has  decommitted  the Facility,
the  Partnership  will be paid the lesser of the contract  price or FPL's actual
"as  available"  energy rates for the first 360 of such hours each year (in this
context,  "as  available"  energy costs reflect actual energy  production  costs
avoided by FPL  resulting  from the  production  or  purchase of energy from the
Facility and other  sources).  If fewer than 360 hours are used in any year, FPL
may carry the balance forward, not to exceed a total of 1,440 hours in any year.
If the  hours  accumulated  exercising  this  reconnection  right  exceed  FPL's
balance,  the Partnership will be paid for energy produced during those hours at
the energy rates set forth under the power sales agreement.

          

     Management of the Partnership  believes that this  resolution  provides the
Partnership with the flexibility it requires to maintain its Qualifying Facility
status without materially adversely affecting the Project.

          

     On December 12, 2000, FPL filed a complaint  against the Partnership in the
Circuit Court of the 19th Judicial  District in and for Martin County,  Florida.
In its  complaint,  FPL alleged  that the  Partnership  breached the power sales
agreement by failing to include certain  payments from its coal supplier and its
coal transporter in the Partnership's  calculation of its fuel costs,  which are
included in the  calculation  of the actual  energy  costs under the power sales
agreement.  FPL sought  unspecified  damages and declaratory  relief including a
finding that the Partnership breached the power sales agreement. The Partnership
made a one-time payment of $1,289,579 to FPL in November 2001, which constituted
a settlement of all issues and claims with respect to, and  permanently  closes,
FPL's audits for calendar years 1996, 1997, 1998, 1999, and 2000.
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 2001.
8
PART II
Item 5    MARKET FOR THE REGISTRANT'S COMMON STOCK 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 selected  financial data of the Partnership  presented below, which consists
primarily of certain  summary  consolidated  balance  sheet  information  of the
Partnership as of December 31, 2001, 2000, 1999, 1998, and 1997,  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 Partnership, which was in the development stage through December 21,
1995, began construction of the Facility in October 1992 and declared commercial
operation of the Facility on December 22, 1995.  The  financial  statements  and
supplementary data required by this item are presented under Item 8.2001                   2000                 1999                1998                 1997
                                       ----                   ----                 ----                ----                 ----
Total Assets                       $675,194,455           $680,669,565       $694,852,029        $708,139,691          $735,468,011
Long-Term Debt                      560,702,525            572,521,507        583,994,031         595,835,699           606,119,747
Total Liabilities                   586,320,011            595,689,890        606,607,479         616,339,161           629,342,447
Capital Distributions                12,400,000             25,400,000         25,970,000          35,680,000            28,080,382
Total Partners' Capital              88,874,444             84,979,675         88,244,550          91,800,530           106,125,564
Property, Plant &
Equipment, Net                      615,144,286            628,354,758        641,449,055         654,188,458           668,464,373
Operating Revenues                  175,432,091            177,790,391        163,270,119         159,183,399           162,517,435
Net Income                           16,294,769             22,135,125         22,414,020          21,354,967            18,008,777
9

The  following is a summary
of the quarterly results of operations  (unaudited) for the years ended December
31, 2001 and 2000.Quarter Ended
                                                                             --------------
                                   March 31           June 30          September 30        December 31           Total
                                   --------           -------          ------------        -----------           -----
                                                                       (in thousands)

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


2000
----
Operating revenues                $44,106             $42,589            $47,318            $43,777            $177,790
Gross profit                       22,611              20,965             22,977             20,813              87,367
Net income before
cumulative change in
accounting principle
                                    5,794               4,529              6,466              4,426              21,215
Net income                          6,714               4,529              6,466              4,426              22,135

Item 7     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                
CONDITION AND RESULTS OF OPERATIONSResults of OperationsYear 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.  This
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 89.87% and 98.64%  respectively.
This decrease was primarily attributable to decreased availability due to boiler
tube leaks and  repairs  to the  generator.  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  Capacity  Billing  Factor  relating to decreased
availability  due to boiler  tube  leaks and the  generator  repairs.  The lower
energy  revenues are due  primarily to an increase in forced  outages for boiler
tube leaks and the extension of the scheduled outage for the generator  repairs.
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.

10

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.

          

     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 a $3.3 million increase in operating costs, a 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 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.Year ended December 31, 2000 Compared to the Year Ended December 31, 1999

          

     For the years ended December 31, 2000 and 1999, the  Partnership  had total
operating  revenues of $177.8  million and $163.3  million,  respectively.  This
increase in 2000 was  attributable  primarily  to increased  energy  revenues of
$14.2  million and by increased  capacity  bonus and  capacity  revenues of $0.3
million.  For the years ending December 31, 2000 and 1999, the Facility achieved
an average  Capacity  Billing  Factor of 98.64% and 100.64%  respectively.  This
decrease was primarily  attributable to minor  mechanical  problems with turbine
control  valves.  This  resulted  in  earning  full  monthly  capacity  payments
aggregating  $112.8 million for the year in 2000 and $112.5 million for the year
in 1999.  Bonuses  aggregated  $11.2 million for the year in both 2000 and 1999.
The  increased  revenues  from  capacity  are  due  primarily  to the  quarterly
escalations  on the fixed  operating& maintenance  component  of the  capacity
charge.  The higher energy revenues are due primarily to greater dispatch levels
by FPL.  During 2000 and 1999,  the Facility was dispatched by FPL and generated
2,343,677 megawatt-hours and 1,745,760 megawatt-hours, respectively. The monthly
average dispatch rate requested by FPL was 87.6% and 65.4% for the twelve months
ended December 31, 2000 and 1999, respectively.

          

     Total  operating  costs were $102.1 million and $85.5 million for the years
ended December 31, 2000 and 1999, respectively.  This increase was due primarily
to an  increase  of $16.1  million in fuel and ash costs,  both  resulting  from
higher  dispatch  by  FPL,  and an  increase  of $0.7  million  in  general  and
administrative  expenses  relating to the FPL  litigation  costs.  For the years
ended  December  31,  2000  and  1999,  the  total  net  interest   expense  was
approximately  $54.5 million and $55.4 million,  respectively.  The decrease was
primarily  due to a $0.8  million  reduction  in bond  interest  expense  due to
installment payments of the Series A-9 First Mortgage Bonds on June 15, 2000 and
on December 15, 2000,  an increase in interest  income of $0.3  million,  and an
increase in letter of credit fees of $0.2 million.

11

Net income was $22.1  million and $22.4 million for the twelve months ended
December  31,  2000 and 1999,  respectively.  This  $0.3  million  decrease  was
primarily  attributable to a $16.6 million increase in operating costs offset by
the increased  revenues of $14.5 million,  the effect of a cumulative  change in
accounting  principle for major  maintenance of $0.9 million,  and a decrease in
net interest expense of $0.9 million.

          

     As of December 31, 2000 and 1999 the Partnership had  approximately  $628.4
million and $641.4  million,  respectively,  of  property,  plant and  equipment
consisting  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 $15.0 million,  offset by $2.1 million of capital
improvements.Liquidity and Capital Resources

          

     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 9.05% 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.

12

`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**`

**As of December 31, 2001, the  Partnership  has made  semi-annual  installments
totaling  $22,674,031  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,  2001  and  2000,   was  9.197%  and  9.204%,
respectively.

          

     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.  Certain  of these  letters of credit  have been  issued
pursuant  to  a  Letter  of  Credit  and  Reimbursement  Agreement  with  Credit
Suisse/First  Boston (formerly known as Credit Suisse) and the remaining letters
of credit will be issued when required under the Project  Contracts,  subject to
conditions contained in such Letter of Credit and Reimbursement Agreement. As of
December 31, 2001, no drawings have been made on any of these letters of credit.
The  Letter of Credit  and  Reimbursement  Agreement  has 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 are due to expire in the fourth
quarter  of 2002.  The  Partnership  expects to obtain a  replacement  letter of
credit provider before the current letters of credit expire.

          

     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. As of December 31, 2001, no drawings have
been made 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.
Pursuant  to the terms of the  Disbursement  Agreement,  if the  Partnership  is
unsuccessful in its continuing effort to effect an extension of the agreement or
replace the  agreement,  available  cash flows will begin 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 Maximum Balance is achieved.

13

In order to  provide  for the  Partnership's  working  capital  needs,  the
Partnership  entered into a Revolving Credit Agreement with Credit  Suisse/First
Boston dated as of November 1, 1994.  In  September  2001,  Credit  Suisse/First
Boston  notified the  Partnership of its intention not to extend the term of the
agreement,  which  expired on November 22,  2001.  The  Partnership  is actively
engaging in  discussions  with other  financial  institutions  to obtain another
working capital facility. The Partnership believes that it has adequate cashflow
from  operations  to fund all of its  working  capital  requirements  even if no
replacement working capital facility is obtained.

          

     For 2002, we have identified possible capital improvements of approximately
$2.0  million  that will  enhance the  reliability  of the  facility and will be
funded  through cash  normally  available for partner  distributions.  This list
includes  combustion  tuning,  additional upper aquifer wells, and rotating vane
classifiers for the pulverizers.Derivative Financial Instruments

          

     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.

          

     In  December  2001,  the FASB  approved  an  interpretation  issued  by the
Derivatives  Implementation  Group ("DIG") that changes the definition of normal
purchases  and sales for certain  power  contracts.  Based on the  Partnership's
current analysis, the power contract with FPL is a derivative,  but qualifies as
a normal purchase and sales  exemption,  thus is exempt from the requirements of
SFAS No. 133 and is not reflected on the balance  sheet at fair value.  The FASB
has also approved another DIG interpretation that disallows normal purchases and
sales  treatment  for  commodity  contracts  (other than power  contracts)  that
contain  volumetric  variability  or  optionality.  Certain  of  our  derivative
commodity  contracts may no longer be exempt from the  requirements  of SFAS No.
133.  We are  evaluating  the  impact  of  the  implementation  guidance  on our
financial statements,  and will implement this guidance, as appropriate,  by the
effective date of April 1, 2002.

14

New Accounting Pronouncements

In  October  2001,  the FASB  issued  SFAS  No.  144,  Accounting  for the
Impairment or Disposal of Long-Lived  Assets  (SFAS No.  144).
SFAS No. 144  supercedes  FSAS No. 121,  Accounting  for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, but retains
its  fundamental   provisions  for  recognizing  and  measuring   impairment  of
long-lived  assets to be held and used.  This  Statement  also requires that all
long-lived assets to be disposed of by sale are carried at the lower of carrying
amount or fair value less cost to sell, and that depreciation should cease to be
recorded  on  such  assets.   SFAS  No.  144  standardizes  the  accounting  and
presentation  requirements for all long-lived  assets to be disposed of by sale,
superceding previous guidance for discontinued  operations of business segments.
This Standard is effective for fiscal years  beginning  after December 15, 2001.
The Partnership  anticipates that  implementation  of this standard will have no
impact on its financial  statements.  The  Partnership  will apply this guidance
prospectively.Item   7A   
Qualitative and Quantitative 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)           2002           2003         2004         2005         2006        Thereafter        Total       Fair Value
                                ----           ----         ----         ----         ----        ----------        -----       ----------
Tax Exempt Bonds:
Principal                        $0.0          $0.0         $0.0         $0.0         $0.0         $125,010      $125,010      $130,409
Interest                       $9,865        $9,865       $9,865       $9,865       $9,865         $165,818      $215,143
Average Interest Rate           7.89%         7.89%        7.89%        7.89%        7.89%            7.89%

First Mortgage Bonds:
Principal                     $11,460       $14,566      $16,785      $16,257      $18,224         $366,275      $443,567      $447,411
Interest                      $42,178       $41,045      $39,645      $38,102      $36,552         $246,030      $443,552
Average Interest Rate           9.57%         9.58%         9.59%        9.61%        9.63%          9.73%
------------------------------------------------------------------------------------------------------------------------------------------`

15

Item 8    
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

`Index to Financial Statements                                                               Page
        -----------------------------                                                               ----

        Report of Independent Public Accountants                                                     18
        Consolidated Balance Sheets                                                                  19
        Consolidated Statements of Operations                                                        21
        Consolidated Statements of Changes in Partners' Capital                                      22
        Consolidated Statements of Cash Flows                                                        23
        Notes to Consolidated Financial Statements                                                   24`

16

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

17

Indiantown Cogeneration, L.P. and Subsidiary
                         Consolidated Balance SheetsAs of December 31, 2001 and 2000

`ASSETS                                             2001                       2000
------------------------------------------------------------------------     ------------------        --------------------

CURRENT ASSETS:
     Cash and cash equivalents                                                 $        331,956         $           821,955

     Accounts receivable-trade                                                       14,443,374                  13,853,485
     Inventories                                                                        259,282                   2,116,636
     Prepaid expenses                                                                   981,571                     800,238
     Deposits                                                                            44,450                      44,450
     Investments held by Trustee, including restricted funds
         of  $2,666,539 and $2,694,068, respectively                                  9,572,996                   2,980,292
                                                                              -----------------         -------------------
               Total current assets                                                  25,633,629                  20,617,056

INVESTMENTS HELD BY TRUSTEE,
     restricted funds                                                                15,502,121                  15,108,428

DEPOSITS                                                                                171,737                     159,365

PROPERTY, PLANT&EQUIPMENT:
     Land                                                                             8,582,363                   8,582,363
     Electric and steam generating facilities                                       702,175,087                 700,310,050
     Less - accumulated depreciation                                               (95,613,164)                (80,537,655)
                                                                             ------------------         -------------------
               Net property, plant&equipment                                      615,144,286                 628,354,758

FUEL RESERVE                                                                          4,059,534                     922,254

DEFERRED FINANCING COSTS, net of accumulated
amortization of $45,503,768 and $44,679,212, respectively                            14,683,148                  15,507,704
                                                                             ------------------        --------------------

               Total assets                                                   $     675,194,455        $        680,669,565
                                                                             ==================        ====================


                          The accompanying notes are an integral part of these consolidated financial statements.`

18

Indiantown Cogeneration, L.P. and Subsidiary
                           Consolidated Balance SheetsAs of December 31, 2001 and 2000

`LIABILITIES AND PARTNERS' CAPITAL                                                2001                      2000
------------------------------------------------------------------        -----------------         -----------------

CURRENT LIABILITIES:
     Accounts payable and accrued liabilities                             $      11,474,326        $        9,325,173
     Accrued interest                                                             2,324,178                 2,370,686
     Current portion - First Mortgage Bonds                                      11,460,407                11,140,896
     Current portion of lease payable - railcars                                    358,575                   331,628
                                                                          -----------------         -----------------
               Total current liabilities                                         25,617,486                23,168,383
                                                                          -----------------         -----------------

LONG TERM DEBT:
     First Mortgage Bonds                                                       432,107,562               443,567,969
     Tax Exempt Facility Revenue Bonds                                          125,010,000               125,010,000
     Lease payable - railcars                                                     3,584,963                 3,943,538
                                                                          -----------------         -----------------
               Total long term debt                                             560,702,525               572,521,507

                                                                          -----------------         -----------------

               Total liabilities                                                586,320,011               595,689,890
                                                                          -----------------         -----------------

COMMITMENTS AND CONTINGENCIES (NOTE 7)

PARTNERS' CAPITAL:
    Toyan Enterprises                                                            26,706,773                25,536,395
    Palm Power Corporation                                                        8,887,444                 8,497,967
    Indiantown Project Investment, L.P. Partnership                              17,730,450                16,953,444
    Thaleia, LLC                                                                 35,549,777                33,991,869
                                                                          -----------------         -----------------
               Total partners' capital                                           88,874,444                84,979,675
                                                                          -----------------         -----------------

               Total liabilities and partners' capital                    $     675,194,455         $     680,669,565
                                                                          =================         =================



                          The accompanying notes are an integral part of these consolidated financial statements.`

19

Indiantown Cogeneration, L.P. and Subsidiary
                    Consolidated Statements of OperationsFor the Years Ended December 31, 2001, 2000 and 19992001                    2000                  1999
                                                            ----------------------- --------------------- ---------------------
                                                            ----------------------- --------------------- ---------------------
Operating Revenues:
     Electric capacity and capacity bonus                         $122,202,351           $124,029,498          $123,682,957
     Electric energy revenue                                         52,901,962             53,652,475            39,461,349
     Steam                                                              327,778                108,418               125,813
                                                            -------------------     ------------------    ------------------
         Total operating revenues                                   175,432,091            177,790,391           163,270,119
                                                            -------------------     ------------------    ------------------

Cost of Sales:
     Fuel and ash                                                    56,320,761             55,910,214            39,794,007
     Operating and maintenance                                       21,654,029             19,353,798            19,767,743
     Depreciation                                                    15,187,033             15,003,258            15,227,631
     Loss on disposal of assets                                         609,097                155,780                    --
                                                            -------------------     ------------------    ------------------
         Total cost of sales                                         93,770,920             90,423,050            74,789,381
                                                            -------------------     ------------------    ------------------

Gross Profit                                                         81,661,171             87,367,341            88,480,738
                                                            -------------------     ------------------    ------------------

Other Operating Expenses:
     General and administrative                                       4,450,258              5,179,313             4,501,136
     Insurance and taxes                                              7,155,260              6,475,006             6,212,453
                                                            -------------------     ------------------    ------------------
         Total other operating expenses                              11,605,518             11,654,319            10,713,589
                                                            -------------------     ------------------    ------------------
Operating Income                                                     70,055,653             75,713,022            77,767,149
                                                            -------------------     ------------------    ------------------

Non-Operating Income (Expense):
     Interest expense                                              (55,528,078)           (56,905,787)          (57,475,271)
     Interest income                                                  1,767,194              2,407,354             2,122,142
                                                            -------------------     ------------------    ------------------
         Net non-operating expense                                 (53,760,884)           (54,498,433)          (55,353,129)
                                                            -------------------     ------------------    ------------------

Income before cumulative effect of a change in accounting
principles                                                           16,294,769             21,214,589            22,414,020


Cumulative effect of a change in accounting
for scheduled major overhaul costs (Note 2)                                  --                920,536                    --
                                                            -------------------     ------------------    ------------------
Net Income                                                       $   16,294,769        $    22,135,125         $  22,414,020
                                                            ===================     ==================    ==================

               The accompanying notes are an integral part of these consolidated financial statements.
20
Indiantown Cogeneration, L. P. and Subsidiary
                                                          Consolidated Statements of Changes in Partners' Capital
          For the Years Ended December 31, 2001, 2000 and 1999Toyan        Palm Power                                                     Total Partners'
                                                 Enterprises     Corporation  TIFD III-Y, Inc.      IPILP       Thaleia, LLC       Capital
                                              ---------------  ------------   ---------------  -------------  -----------      -------------
Partners' capital, December 31, 1998              $27,586,061    $9,180,053       $36,720,211    $18,314,205  $       --         $91,800,530
Net Income (1/1/99 through 6/4/99)                  3,139,325     1,044,700         4,178,802      2,084,177          --          10,447,004
                                              ---------------  ------------   ---------------  -------------  -----------      -------------
Partners' capital, June 4, 1999                   $30,725,386   $10,224,753       $40,899,013    $20,398,382  $       --        $102,247,534
Transfer TIFD III-Y, Inc. 19.90% interest to
Thaleia, LLC                                               --            --      (20,347,259)             --   20,347,259                 --
Net Income (6/5/99 through 9/20/99)                 1,915,912       637,575         1,281,525      1,271,961    1,268,773          6,375,746
Capital distributions (6/5/99
                 through 9/20/99)                 (5,039,385)   (1,677,000)       (3,370,770)    (3,345,615)   (3,337,230)       (16,770,000)
                                              ---------------  ------------   ---------------  -------------  -----------      -------------
Partners' capital, September 20, 1999             $27,601,913    $9,185,328       $18,462,509    $18,324,728  $18,278,802        $91,853,280
Transfer TIFD III-Y, Inc. 20.00% interest to
Thaleia, LLC                                               --            --       (18,370,656)            --   18,370,656                 --
Net Income (9/21/99 through 11/24/99)               1,175,664       391,236             3,912        780,517    1,561,032          3,912,361
                                              ---------------  ------------   ---------------  -------------  -----------      --------------
Partners' capital, November 24, 1999              $28,777,577    $9,576,564     $      95,765    $19,105,245  $38,210,490        $95,765,641
Transfer TIFD III-Y, Inc. 0.10% interest to
Thaleia, LLC                                               --            --          (95,765)             --       95,765                 --
Net Income (11/25/99 through 12/31/99)                504,512       167,891                --        334,942      671,564           1,678,909
Capital distributions (11/25/99 through
12/31/99)                                         (2,764,600)     (920,000)                --    (1,835,400)  (3,680,000)          (9,200,000)
                                              ---------------  ------------    --------------  -------------  -----------         ------------

Partners' capital, December 31, 1999              $26,517,489    $8,824,455   $            --    $17,604,787  $35,297,819        $88,244,550
                                              ===============  ============   ===============  =============  ===========        ===========
Net Income                                          6,651,606     2,213,512                --      4,415,957    8,854,050         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                                          4,896,578     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
                                              ===============  ============   ===============  =============  ===========       ==============

                          The accompanying notes are an integral part of these consolidated financial statements.
21

Indiantown Cogeneration, L.P. and Subsidiary
                                                         Consolidated Statements of Cash FlowsFor the Years Ended December 31, 2001, 2000, and 19992001                2000                1999
                                                                               ------------------------------------------------------------
  CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                                                      $16,294,769         $22,135,125         $22,414,020
           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                                              16,011,589          15,827,822          15,681,507
             Loss on disposal of assets                                                    609,097             155,780                  --
      Effect of changes in assets and liabilities:
             Increase in accounts receivable-trade                                       (589,889)           (381,500)         (1,102,391)
             (Increase)  decrease in inventories and fuel reserve                      (1,279,926)           (574,774)           1,904,412
             Increase in deposits and prepaid expenses                                   (193,705)            (72,231)            (76,122)
             Increase in accounts payable and accrued
                liabilities and accrued interest                                        2,102,645           1,844,616             552,186
                                                                                      -----------         -----------          ----------
                         Net cash provided by operating activities                     32,954,580          38,014,302          39,373,612
                                                                                      -----------         -----------          ----------

  CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of property, plant&equipment, net of disposals                    (2,585,658)         (2,064,741)         (2,108,071)
          Increase in investments held by Trustee                                      (6,986,397)           (302,934)         (1,013,585)
                                                                                       -----------           ---------         -----------
                        Net cash used in investing activities                          (9,572,055)         (2,367,675)         (3,121,656)
                                                                                       -----------         -----------         -----------

  CASH FLOWS FROM FINANCING ACTIVITIES:
          Payment on capital lease obligation - railcars                                 (331,628)           (308,534)           (287,048)
          Borrowings under revolving credit agreement                                   3,697,173          12,835,436          14,568,378
          Repayments under revolving credit agreement                                  (3,697,173)        (12,835,436)        (14,568,378)
          Payment on First Mortgage Bonds                                             (11,140,896)        (11,533,135)         (9,997,000)
          Capital distributions                                                       (12,400,000)        (25,400,000)        (25,970,000)
                                                                                      ------------        ------------        ------------
                 Net cash used in financing activities                                (23,872,524)        (37,241,669)        (36,254,048)
                                                                                      ------------        ------------        ------------

  CHANGE IN CASH AND CASH EQUIVALENTS                                                    (489,999)         (1,595,042)             (2,092)

  Cash and cash equivalents, beginning of year                                            821,955           2,416,997           2,419,089
                                                                                      ------------        ------------        ------------
  Cash and cash equivalents, end of year                                              $   331,956         $   821,955         $ 2,416,997
                                                                                      ============        ===========         ============


  SUPPLEMENTAL DISCLOSURE OF CASH FLOW
         INFORMATION:
                Cash paid for interest                                                $53,082,539         $54,141,427         $55,039,501
                                                                                      ===========         ===========         ===========

                               The accompanying notes are an integral part of these consolidated financial statements.
22
Indiantown Cogeneration, L.P. and Subsidiary
                 Notes to Consolidated Financial Statements
                  As of December 31, 2001 and 20001.   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.
23

The net income of the  Partnership  is allocated to Toyan,  Palm,  TIFD and
IPILP  and  Thaleia  (collectively,  the  "Partners")  based  on  the  following
ownership percentages:
Toyan                                                      30.05%
Palm                                                      10.00%*
IPILP                                                      19.95%**
Thaleia                                                    40.00%

* Now beneficially owned by Cogentrix.
       ** PFTs beneficial ownership in the Partnership through IPILP was
          equal to 10% as of August 21, 1998, and 15% as of November 23, 1998. 

          

     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").

          

     NEG, Inc. is a wholly-owned  indirect  subsidiary of PG&E  Corporation.
Because  the   California   energy  markets   situation  has  caused   financial
difficulties for Pacific Gas and Electric Company,  a wholly owned subsidiary of
PG&E Corporation,  PG&E  Corporation's credit ratings were downgraded to
below  investment  grade in January 2001,  which caused PG&E  Corporation to
default on outstanding  commercial paper and bank  borrowings.  In January 2001,
certain  corporate  actions  were  taken to  insulate  the assets of NEG and its
direct and indirect  subsidiaries  from an effort to  substantively  consolidate
those assets in any insolvency or bankruptcy proceeding of PG&E Corporation.
In March 2001, PG&E Corporation refinanced all of its outstanding commercial
paper and bank borrowings,  and Standard&Poor's subsequently removed its below
investment  grade credit rating since  PG&E  Corporation no longer had rated
securities  outstanding.  Management of NEG believes that NEG 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.
24

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:Presentation

          

     The  Partnership's  consolidated  financial  statements are prepared on the
accrual basis of accounting in accordance with accounting  principles  generally
accepted in the United  States.  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.

          

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

          

     For  the  purposes  of  reporting  cash  flows,  cash  equivalents  include
short-term investments with original maturities of three months or less.Inventories

          

     Coal and lime  inventories  are stated at the lower of cost or market using
the average cost method.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. The Partnership  maintains restricted  investments covering a portion of
debt  principal and interest  payable,  as required by the financing  documents.
These   investments  are  classified  as  current  assets  in  the  accompanying
consolidated  balance sheets. A qualifying facility ("QF") reserve of $3,000,000
is also held as a non-current asset (see Note 4).
25
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.

          

     The Financial  Accounting  Standards  Board  ("FASB")  issued  Statement of
Financial  Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS No. 121").
SFAS No. 121  establishes  criteria for  recognizing  and  measuring  impairment
losses when recovery of recorded  long-lived  asset values is uncertain.  During
2001,  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  (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 2001.Fuel Reserve

          

     The fuel reserve,  carried at cost,  represents an approximate  twenty-five
day supply of coal held for emergency purposes.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.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.
26

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.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"("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.

          

     In  December  2001,  the FASB  approved  an  interpretation  issued  by the
Derivatives  Implementation  Group ("DIG") that changes the definition of normal
purchases  and sales for certain  power  contracts.  Based on the  Partnership's
current analysis, the power contract with FPL is a derivative,  but qualifies as
a normal purchase and sales  exemption,  thus is exempt from the requirements of
SFAS No. 133 and is not reflected on the balance  sheet at fair value.  The FASB
has also approved another DIG interpretation that disallows normal purchases and
sales  treatment  for  commodity  contracts  (other than power  contracts)  that
contain  volumetric  variability  or  optionality.  Certain  of  our  derivative
commodity  contracts may no longer be exempt from the  requirements  of SFAS No.
133.  We are  evaluating  the  impact  of  the  implementation  guidance  on our
financial statements,  and will implement this guidance, as appropriate,  by the
effective date of April 1, 2002.New Accounting Pronouncements

          

     In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of  Long-Lived  Assets"  ("SFAS No.  144").  SFAS No. 144
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of", but retains its fundamental provisions
for  recognizing  and measuring  impairment of long-lived  assets to be held and
used. This Statement also requires that all long-lived  assets to be disposed of
by sale are carried at the lower of  carrying  amount or fair value less cost to
sell, and that depreciation should cease to be recorded on such assets. SFAS No.
144 standardizes the accounting and presentation requirements for all long-lived
assets to be disposed of by sale, superceding previous guidance for discontinued
operations  of business  segments.  This  Standard is effective for fiscal years
beginning   after  December  15,  2001.   The   Partnership   anticipates   that
implementation of this standard will have no impact on its financial statements.
The Partnership will apply this guidance prospectively.
27
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,  2001 and 2000,
estimated present values of this deposit of $171,737 and $159,365, 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.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 percent and with maturities ranging from 1996 to 2020.
Interest  is  payable  semi-annually  on June 15 and  December  15 of each year.
Interest   expense  related  to  the  First  Mortgage  Bonds  was   $43,176,476,
$44,275,872, and $45,138,915, in 2001, 2000, and 1999 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 percent and 8.05 percent 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, 2001, 2000,
and  1999.  The Tax  Exempt  Bonds  and the  First  Mortgage  Bonds are equal in
seniority.
28
Future minimum  payments  related to  outstanding  First Mortgage Bonds and
1994 Tax Exempt Bonds as of December 31, 2001 are as follows:
2002                                          $   11,460,407
2003                                              14,566,086
2004                                              16,785,152
2005                                              16,257,206
2006                                              18,224,203
Thereafter                                       491,284,915
                                           --------------------
                 Total                          $568,577,969
                                           ====================
Equity Contribution Agreement

          

     Pursuant to an Equity Contribution Agreement, dated as of November 1, 1994,
between TIFD and NationsBank of Florida, N.A. (succeeded by The Bank of New York
Trust  Company  of  Florida,  N.A.),  the  Partners  contributed   approximately
$140,000,000  of equity on December  26, 1995.  Proceeds  were used to repay the
$139,000,000   outstanding  under  the  Equity  Loan  Agreement.  The  remaining
$1,000,000  was  deposited  with  the  Trustee  according  to  the  disbursement
agreement  among the  Partnership,  the  Trustee  and the other  lenders  to the
Partnership.  On June  15,  1998,  the  funds  were  released  and  subsequently
distributed in accordance with the Disbursement Agreement.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 rate for the borrowings were approximately  5.52%,
7.98% and 6.58% during 2001,  2000 and 1999,  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,  $52,919  and  $52,836  in  commitment  fees in 2001,  2000  and  1999,
respectively.  All borrowings  made under this agreement were repaid in the year
borrowed.  As  of  December  31,  2001,  2000,  and  1999,  no  borrowings  were
outstanding.  The Partnership incurred interest expense of $17,148,  $84,574 and
$78,343 in 2001,  2000 and 1999,  respectively,  related  to the  aforementioned
borrowings.
29
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 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.  During 2001,  2000, and 1999 no draws were made on
this letter of credit. Commitment fees of $697,049,  $689,092, and $704,555 were
paid on this letter of credit in 2001, 2000, and 1999, 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, 2001 and 2000, was $3,000,000 and $2,500,000,  respectively, and is
included in  noncurrent,  restricted  funds held by trustee in the  accompanying
consolidated balance sheets.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. As of December 31, 2001, 2000,
and 1999,  no draws had been made on this letter of credit.  Commitment  fees of
$139,409,  $137,818 and $143,011  were paid relating to this letter of credit in
2001, 2000, and 1999, respectively.
30
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 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  party  thereto.
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.  As of December 31, 2001,  2000,  and 1999,  no draws had been
made on this  letter of  credit.  Commitment  fees of  $409,611,  $410,733,  and
$488,281  were  paid  on  this  letter  of  credit  in  2001,  2000,  and  1999,
respectively.  On January 11, 1999, pursuant to the Disbursement Agreement,  the
Debt  Service  Reserve  Letter  of  Credit  was  reduced  to  $29,925,906.   The
Partnership  is  currently  working  with BNP  Paribas to extend  this letter of
credit.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 VFL  Technology  Corporation  for the disposal of ash with  similar  terms,
which terminated 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 the
Amendment  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.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.
Chemlime  notified the  Partnership  of its  intention  to cancel the  agreement
effective in the first quarter of 2002. The Partnership  renegotiated  the price
of lime with Chemlime beginning February 1, 2002.
31
6.      SALES AND SERVICES AGREEMENTS:Power Purchase Agreement

          

     On May 21, 1990, the  Partnership  entered into a Power Purchase  Agreement
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, 1996.7.    COMMITMENTS AND CONTINGENCIES

          

     On March 19, 1999,  the  Partnership  filed a complaint  against FPL in the
United States  District  Court for the Middle  District of Florida.  The lawsuit
stemmed from a course of action  pursued by FPL beginning in the Spring of 1997,
in which FPL  purported to exercise  its  dispatch and control  rights under the
Power Purchase Agreement in a manner which the Partnership believes violated the
terms of the power purchase agreement. In its complaint, the Partnership charged
that such conduct was  deliberately  calculated to cause the  Partnership  to be
unable  to  meet  the  requirements  to  maintain  the  Facility's  status  as a
Qualifying Facility under the Public Utility Regulatory Policies Act of 1978.

          

     On December 19, 2000, FPL and the  Partnership  participated in a mediation
conference with respect to the pending litigations described herein. As a result
of this conference,  FPL and the Partnership executed two Settlement  Agreements
intended to resolve all pending  litigation.  Only the Settlement  Agreement for
the pending  federal  court  litigation  requires  amendment  of the power sales
agreement.  The  amendment  must  be  approved  by the  Florida  Public  Service
Commission,  and certain  conditions  set forth in the  Indenture for the Bonds,
including confirmation of the Bonds' investment grade rating, must be met for it
to become effective.
32
An  outline of the  business  terms set forth in the  Settlement  Agreement
provides that if the Facility is off-line for any reason,  the Partnership shall
have the right,  upon up to 6 hours notice and subject only to safety and system
reliability  issues,  to reconnect to FPL's system and produce up to 100 MW. The
Settlement  Agreement  provides that if this occurs when FPL has decommitted the
Facility,  the Partnership will be paid FPL's actual "as available" energy rates
for the  first 360 of such  hours  each year (in this  context,  "as  available"
energy costs  reflect  actual energy  production  costs avoided by FPL resulting
from the production or purchase of energy from the Facility and other  sources).
If fewer than 360 hours are used in any year, FPL may carry the balance forward,
not to  exceed  a total of 1440  hours in any  year.  If the  hours  accumulated
exercising this reconnection right exceed FPL's balance, the Partnership will be
paid for energy  produced during those hours at the energy rates set forth under
the power sales agreement.

          

     Management of the Partnership  believes that this  resolution  provides the
Partnership with the flexibility it requires to maintain its Qualifying Facility
status without materially adversely affecting the Project.

          

     On May 17, 2001, the Partnership and FPL executed an amendment to the power
purchase  agreement  to  implement  the  Settlement  Agreement  relating  to the
litigation pending in federal court. The amendment was filed for approval by the
Florida Public Service Commission  ("FPSC") on June 7, 2001. At a public meeting
on July 24, 2001,  the FPSC voted to approve the  amendment.  On August 8, 2001,
the FPSC issued its order on Proposed Agency Plan ("PAA"),  in which it proposed
to approve the  amendment.  The PAA order  provided a 21-day  period in which an
affected party could have protested the proposed approval. No protest was filed;
however,  on October 11, 2001,  the FPSC issued an amended order  clarifying the
PAA.  At that time,  the FPSC's  action was subject to an appeal  period,  which
expired on November 12, 2001,  without appeal.  In addition,  the conditions set
forth in the Indenture for the Bonds have been met.

          

     On December 12, 2000, FPL filed a complaint  against the Partnership in the
Circuit Court of the 19th Judicial  District in and for Martin County,  Florida.
In its  complaint,  FPL alleged  that the  Partnership  breached the power sales
agreement by failing to include certain  payments from its coal supplier and its
coal  transporter in the  Partnership's  calculation of its fuel costs which are
included in the  calculation  of the actual  energy  costs under the power sales
agreement.  The power sales agreement  requires a sharing of actual energy costs
between FPL and the  Partnership  to the extent the actual costs differ  (either
upward or  downward)  from a formula  contained  in the  agreement.  FPL  sought
unspecified  damages  and  declaratory  relief  including  a  finding  that  the
Partnership  breached  the power sales  agreement.  A Settlement  Agreement  was
executed on October 17, 2001,  and provides that the  Partnership  will include,
among other things, in future calculations of its actual energy costs all costs,
credits, rebates,  discounts, and allowances/concessions  from all past, current
or future vendors of fuel, fuel  transportation,  ash, and lime. The Partnership
made a one-time payment of $1,289,579 to FPL in November 2001, which constituted
a settlement of all issues and claims with respect to, and  permanently  closes,
FPL's audits for calendar years 1996, 1997, 1998, 1999, and 2000.
33
8.   RELATED PARTY TRANSACTIONS:Management Services Agreement

          

     The Partnership has a Management  Services Agreement with NEG, a California
general partnership and a wholly owned indirect subsidiary of NEG, Inc., 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),  wages  and  benefits  for
employees  performing work on behalf of the Partnership and other costs directly
related to the Partnership. Payments of $4,167,428,  $4,324,042, and $4,120,468,
in 2001, 2000, and 1999 were made to NEG, respectively.  As of December 31, 2001
and 2000, the Partnership  owed NEG $315,730 and $437,925,  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, a California general  partnership and a wholly owned indirect subsidiary of
NEG, Inc., 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 $1.5 million
($900,000  of which 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.  Payments of $9,326,634,
$9,921,638,  and $9,790,473  were made to PG&E OSC in 2001,  2000, and 1999,
respectively.  As of December 31, 2001 and 2000, the  Partnership  owed PG&E
OSC $320,402 and $201,840,  respectively,  which is included in accounts payable
and accrued liabilities in the accompanying consolidated balance sheets.Railcar Lease

          

     The  Partnership  entered  into a 15 year  Car  Leasing  Agreement  with GE
Capital Railcar Services Corporation, an affiliate of GECC, 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 asset
of  $5,753,375  and  accumulated  depreciation  of  $2,551,580  and  $2,168,022,
respectively  is included in  property,  plant and  equipment as of December 31,
2001 and 2000. Payments of $629,856, including principal and interest, were made
in 2001, 2000, and 1999.
34
Future minimum payments related to the Car Leasing Agreement as of December
31, 2001 are as follows:
2002                                                   $629,856
       2003                                                    629,856
       2004                                                    629,856
       2005                                                    629,856
       2006                                                    629,856
                                                           -----------
       Thereafter                                            2,114,911
                                                           -----------
             Total minimum lease payments                    5,264,191

             Interest portion of lease payable             (1,320,653)
                                                           -----------
             Present value of future
             minimum lease payments                          3,943,538
             Current portion                                 (358,575)
                                                           -----------
             Long-term portion                              $3,584,963
                                                           ===========

Distribution to Partners

          

     On June 15, 2001, as provided in the Partnership Agreement, the Partnership
distributed approximately $12.4 million to the Partners.9.    DISCLOSURE ABOUT 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, 2001
and 2000.
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


                                    December 31, 2000
-------------------------------------------------------------------------------------------------
          Financial Liabilities                     Carrying Amount                    Fair Value
          ---------------------                     ---------------                    ----------

        Tax Exempt Bonds                             $125,010,000                     $127,510,200
        First Mortgage Bonds                         $454,708,865                     $492,483,915

For the Tax Exempt Bonds and First Mortgage  Bonds,  the fair values of the
Partnership's  bonds  payable  are based on the  stated  rates of the Tax Exempt
Bonds and First  Mortgage  Bonds and current  market  interest rates to estimate
market values for the Tax Exempt Bonds and the First Mortgage Bonds.
35
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.
36
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTSAs independent public accountants, we hereby consent to the incorporation of our
report  dated  January  23,  2002 in this Form  10-K  included  in  Registration
Statement  File No.  33-82034.  It should be noted that we have not  audited any
financial statements of the company subsequent to December 31, 2001 or performed
any audit procedures subsequent to the date of our report./S/  ARTHUR ANDERSEN LLP


Vienna, VA
April 1, 2002Item 9   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             
ACCOUNTING AND FINANCIAL DISCLOSURE

          

        None.

37

PART III

Item 10   DIRECTORS AND EXECUTIVE OFFICERSIndiantown 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
                        ----                          ---                        --------
     Thomas J. Bonner.................                 47                Palm Representative and
                                                                         Thaleia Representative
     Thomas F. Schwartz ..............                 40                Palm Representative and
                                                                         Thaleia Representative
     P. Chrisman Iribe................                 50                IPILP Representative
     Sanford L. Hartman...............                 48                IPILP Representative`

Thomas J. Bonner is Vice President - Asset Management for Cogentrix Energy,
Inc. and has been with Cogentrix since 1987. Prior to joining  Cogentrix Energy,
Inc., Mr. Bonner spent five years as a utilities  manager in an integrated fiber
and chemical  production  facility.  Mr. Bonner holds a B.S. from the U.S. Naval
Academy, and an M.B.A. from Old Dominion 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 is  President of NEG and has been with NEG since it was
formed in 1989.  Prior to joining NEG, Mr. Iribe was senior vice  president  for
planning,  state  relations  and public  affairs  with ANR Pipeline  Company,  a
natural gas pipeline  company and a subsidiary of the Coastal  Corporation.  Mr.
Iribe holds a B.A. degree in Economics from George Washington University.

          

     Sanford L. Hartman  joined NEG's legal group in 1990 and became its General
Counsel in April 1999.  Prior to joining  NEG,  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.

38

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           50                   Director, President
        Sanford L. Hartman          48                   Director
        John R. Cooper              54                   Vice President, Chief
                                                         Financial Officer and
                                                         Principal 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, 2001, 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.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,  the Operations and  Maintenance  Agreement and the Railcar
Lease,  are  described  elsewhere in this report,  most notably in Note 8 to the
Partnership's consolidated financial statements.

39

PART IV

Item 14   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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

                      Report of Independent Public Accountants...............       18

                      Consolidated Balance Sheets as of
                      December 31, 2001 and 2000 ............................       19

                      Consolidated Statements of Operations for the years
                      ended December 31, 2001, 2000 and 1999................        21

                      Consolidated Statements of Changes
                      in Partners' Capital for the years ended
                      December 31, 2001, 2000 and 1999......................        22

                      Consolidated Statements of Cash Flows for the
                      years ended December 31, 2001, 2000 and 1999.........         23

                      Notes to Consolidated Financial
                      Statements...........................................         24

               (2)    Consolidated Financial Statement
                      Schedules............................................`

None
        
        

        b) Reports on Form 8-K:
None

| | The Partnership filed a Report on Form 8-K on October 9, 2001 announcing
Lodestars decision to reject the coal purchase agreement. This report was
amended by a report on form 8-K/A, filed on October 12, 2001.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Partnership filed a Report on Form 8-K on October 22, 2001 announcing the
deferral of a hearing on Lodestar Energy, Inc.s motion filed with the
Bankruptcy Court seeking to reject the Coal Purchase Agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Partnership filed a Report on Form 8-K on November 9, 2001 announcing the
Amendment No. 3 to the Coal Purchase 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.*

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

40

`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.**`

41

`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.*******

21      Subsidiaries of Registrant*

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

99.1    Confirmation of Receipt of Assurances from Arthur Andersen LLP dated
        April 1, 2002.

___________________________

* 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.`

42

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 April 1, 2002.

`INDIANTOWN COGENERATION, L.P.


Date:  April 1, 2002                    /s/ John R. Cooper
                                        -----------------------------------
                                        Name: John R. Cooper
                                        Title: Chief Financial Officer,
                                        Principal Accounting Officer
                                        and Senior Vice President`

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,        April 1, 2002
----------------------              President and Secretary
P. Chrisman Iribe

/s/ John R. Cooper                  Chief Financial Officer,           April 1, 2002
----------------------              Principal Accounting
John R. Cooper                      Officer and Senior
                                    Vice President

/s/ Thomas J. Bonner                Member of Board of Control         April 1, 2002
--------------------
Thomas J. Bonner

/s/ Thomas F. Schwartz              Member of Board of Control         April 1, 2002
----------------------
Thomas F. Schwartz

/s/ Sanford L. Hartman              Member of Board of Control         April 1, 2002
----------------------              and Senior Vice President
Sanford L. Hartman`

43

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 April 1, 2002.

`INDIANTOWN COGENERATION
                                            FUNDING CORPORATION

Date:  April 1, 2002                        /s/ John R. Cooper
                                           -----------------------------------
                                            Name: John R. Cooper
                                            Title: Chief Financial Officer,
                                            Principal Accounting Officer
                                            and Vice President`

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         April 1, 2002
----------------------
P. Chrisman Iribe

/s/ John R. Cooper                  Chief Financial Officer,       April 1, 2002
----------------------              Principal Accounting
John R. Cooper                      Officer and Vice President`

44
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.**

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.**
45
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.***

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

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

10.2.24      Third Amendment to Coal Purchase Agreement, dated as of November 2,
             2001.*******
46