Ridgewood Electric Power Trust Iv 10-K 2006 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _______

Commission file number:  0-25430

RIDGEWOOD ELECTRIC POWER TRUST IV

 (Exact Name of Registrant as Specified in Its Charter)

Delaware	22-3324608
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

1314 King Street, Wilmington, DE 19801

(Address of Principal Executive Offices, including Zip Code)

(302) 888-7444

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Investor Shares of Beneficial Interest   

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  o    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  o    No  x

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

Indicate by check mark if disclosure of delinquent filers 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.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   o Accelerated filer   o Non-accelerated filer   x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.   Yes  o    No  x

There is no market for the Investor Shares. The number of Investor Shares outstanding at October 31, 2007 was 476.8875.

FORM 10-K

TABLE OF CONTENTS

PART I

Item 1.	Business	1
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Submission of Matters to a Vote of Security Holders	11
PART II
Item 5.	Market for Registrant’s Common Equity, Related Security Holder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	11
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 8.	Financial Statements and Supplementary Data	16
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	16
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	17
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	18
Item 11.	Executive Compensation	19
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	20
Item 13.	Certain Relationships and Related Transactions, and Director Independence	21
Item 14.	Principal Accountant Fees and Services	22
PART IV
Item 15.	Exhibits and Financial Statement Schedules	22
SIGNATURES		24

Forward-Looking Statements

Certain statements discussed in Part I, Item 1. “Business”, Part I, Item 3. “Legal Proceedings”, Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements generally relate to the Trust’s plans, objectives and expectations for future events and include statements about the Trust’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. These statements are based upon management’s opinions and estimates as of the date they are made. Although management believes that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties that may be beyond the Trust’s control, which could cause actual results, performance and achievements to differ materially from results, performance and achievements projected, expected, expressed or implied by the forward-looking statements. Examples of events that could cause actual results to differ materially from historical results or those anticipated include changes in political and economic conditions, federal or state regulatory structures, government mandates, the ability of customers to pay for energy received, supplies and prices of fuels, operational status of generating plants, mechanical breakdowns, volatility in the price for electric energy, natural gas, or renewable energy. Additional information concerning the factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and elsewhere in this Annual Report on Form 10-K. The Trust undertakes no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.

PART I

ITEM 1.  BUSINESS

Overview

The Trust is a Delaware trust formed on September 8, 1994 to primarily make investments in projects and businesses in the energy and infrastructure sectors. Ridgewood Renewable Power LLC (“RRP” or the “Managing Shareholder”), a New Jersey limited liability company, is the Managing Shareholder. As the Managing Shareholder, RRP has direct and exclusive control over the management and operations of the Trust.

The Trust has focused primarily on small-scale electricity generation projects using renewable sources of fuel. These projects allow the Trust to develop secure long-term positions in attractive specialty markets for products and services provided by its projects and companies. As of December 31, 2006, the projects in which the Trust then had investments were located in the United States. As of that date, the Trust had investments in landfill gas-fired electric generating projects with total capacity of 13.8 megawatts (“MW”), in irrigation service engines with total capacity of 2.4MW, in biomass-fueled electricity generating projects with total generating capacity of 49MW, and in hydroelectric generating projects with total capacity of 11.3MW.

The Trust initiated its private placement offering in February 1995 selling whole and fractional investor shares of beneficial interests of $100,000 per share (“Investor Shares”). There is no public market for Investor Shares and one is not likely to develop. In addition, Investor Shares are subject to significant restrictions on transfer and resale and cannot be transferred or resold except in accordance with the Trust’s Declaration of Trust (“Declaration of Trust”) and applicable federal and state securities laws. The offering was concluded in September 1996 and after payment of offering fees, commissions and investment fees, the Trust had $39.5 million available for investments and operating expenses. As of October 31, 2007, the Trust had 476.8875 Investor Shares outstanding, held by 1,048 shareholders.

Managing Shareholder

RRP, via a predecessor corporation, was founded in 1991 by Robert E. Swanson. As the Managing Shareholder, RRP has direct and exclusive control over the management of the Trust’s operations. With respect to project investments, RRP locates potential projects, conducts appropriate due diligence and negotiates and completes the transactions in which the investments are made by the Trust.

In addition, RRP performs (or arranges for the performance of) the operation and maintenance of the projects invested in by the Trust and the management and administrative services required for Trust operations. Among other services, RRP administers the accounts and handles relations with the shareholders, including tax and other financial information. RRP also provides the Trust with office space, equipment and facilities and other services necessary for its operation.

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As compensation for its management services, the Managing Shareholder is entitled to (i) an annual management fee, payable monthly, equal to 3% of the Trust's prior year net asset value (ii) a 20% interest in the cash distributions made by the Trust in excess of certain threshold amounts expressed in terms of shareholder returns. The Managing Shareholder is also entitled to receive reimbursement from the Trust for operating expenses incurred by the Trust, or on behalf of the Trust and paid by RRP, as the Managing Shareholder. RRP has arranged for administrative functions required to be performed for the Trust to be performed by an affiliate, Ridgewood Power Management LLC (“RPM”), and at RPM’s costs, such costs are reimbursed to RPM by the Trust. RRP also serves as the managing shareholder (or managing member as appropriate) of a number of affiliated Trusts and investment vehicles similar to the Trust and, through RPM, provides services to those entities similar to those provided to the Trust.

Affiliates of RRP act on behalf of a number of investment vehicles in the oil and gas and venture capital sectors in a manner similar to that for which RRP serves on behalf of the Trust.

Business Strategy

The Trust’s primary investment objective is to generate cash flow for distribution to shareholders and capital appreciation from one or more of the acquisition, development, ownership and operation of interests in electricity generation and other infrastructure projects and companies. The Trust generally seeks to invest in projects and companies that provide products or services through a number of small facilities and that offer opportunities for expansion either through increasing production at existing sites or through the establishment of additional sites. These projects often involve development, construction and operating risk but, once established, may be able to effectively “lock-in” the customer (or customers) served by the project, which would prevent competitors from dislodging the Trust’s project. The Trust focuses on markets in which projects can be developed and built quickly and can be standardized as to their design, equipment and construction. By following this strategy, the Trust seeks to take advantage of attractive market opportunities while streamlining the development process and diversifying across a number of projects in order to contain the exposure of the Trust to the risks inherent in such projects. As of December 31, 2006, all of the Trust’s projects are owned through investment vehicles that the Trust co-owns with certain affiliated investment trusts or are managed by the Managing Shareholder.

Projects and Properties

The following table is a summary of the Trust’s investment portfolio as of December 31, 2006 detailing the nature of the business, the portion of the investment owned by the Trust and the number of projects in each investment.

Company	No. of Sites	Trust Interest	Leased/ Owned1	Purpose	Structure2
Ridgewood Providence3	1 location	64.3%	Leased	Electricity Generation	Steel building/ concrete slab
Ridgewood Pump Services4	20 locations	100%	Owned	Irrigation Service  Engines	Engines
Indeck Maine5	2 locations	25%	Owned	Electricity  Generation	Industrial compound
Maine Hydro6	14 locations	50%	Owned	Hydroelectric Generation	Integral to river dams

¹ Refers to the locations on which the Trust’s projects are located and not the projects themselves.

² Describes the type of structure in which the projects of the Trust are housed.

³ Co-owned with Ridgewood Electric Power Trust III (“Trust III”). The facility is located in Rhode Island.

⁴ Assets of Ridgewood Pump Services were sold in January 2006. 

⁵ Co-owned with Ridgewood Electric Power Trust V (“Trust V”) (25%) and Indeck Energy Services LLC, an unaffiliated entity (50%). Both plants are located in northeastern Maine.

⁶ Co-owned with Trust V. All sites are located in Maine.

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Ridgewood Providence

Ridgewood Providence Power Partners, L.P. (“Ridgewood Providence”) was formed in February 1996 as a Delaware limited partnership and in April 1996, Ridgewood Providence purchased substantially all of the net assets of Northeastern Landfill Power Joint Venture for $20.4 million including the assumption of debt. The assets acquired included a 13.8MW electrical generating station and associated gas treatment system, located at the Central Landfill in Johnston, Rhode Island. Ridgewood Providence includes nine reciprocating engine/generator sets, which are fueled by methane gas produced by, and collected from, the landfill. Ridgewood Providence has been operating on the site since 1990 and the net electricity generated is sold to New England Power Service Company (“NEP”) under a long-term electricity sales contract. The contract expires in 2020 but becomes a market-rate contract in 2010. The plant is operated and maintained by RPM, on an at-cost basis.

Ridgewood Providence occupies the site and uses the gas from the landfill under the terms of an agreement with the Rhode Island Resource Recovery Corporation (“RIRRC”), a Rhode Island state agency that owns the landfill. Ridgewood Providence subleases a portion of its rights to the landfill gas to Central Gas Limited Partnership (“CGLP”). CGLP operates and maintains a portion of the landfill gas collection system and sells the collected gas to Ridgewood Providence. Ridgewood Providence pays a royalty to RIRRC that is based on its revenue and pays CGLP on a per kilowatt basis. The Ridgewood Providence project qualifies for renewable energy incentives in Massachusetts and Connecticut and a portion of the benefits of these incentives are eligible to be sold to a power marketer under an agreement that continues through 2009.

In December 2002, the Managing Shareholder of the Trust formed Ridgewood Rhode Island Generation LLC (“RRIG”), for the purpose of utilizing the supply of gas from the landfill that is in excess of the quantity that could be used by Ridgewood Providence. The project owned by RRIG reached full operation in October 2005 and has a capacity of 8.5MW. RRIG has rights to gas from the landfill for the purpose of operating the RRIG project. Other than the gas rights granted to RRIG, there is no commercial relationship between RRIG and Ridgewood Providence. The landfill generates significantly more gas than can be utilized by the combined projects of Ridgewood Providence and RRIG.

On August 1, 2003, Ridgewood Providence entered into an Environmental Attribute Agreement with RIRRC and Ridgewood Gas Services, LLC (“RGS”), an affiliate of Ridgewood Providence that provides management services to RIRRC.  Pursuant to the terms of the agreement, Ridgewood Providence is required to pay 15% net revenue royalty to RIRRC and RGS which is derived from the sale of Renewable Portfolio Standards Attributes (“RPS Attributes”) and is the only direct cost of the renewable attribute revenue.  The term of the agreement coincides with the Central Landfill lease agreement, which expires in 2020 and provides for an extension of an additional ten years.

On January 17, 2003, Ridgewood Providence received a “Statement of Qualification” from the Massachusetts Division of Energy Resources (“DOER”) pursuant to the RPS adopted by Massachusetts. Since Ridgewood Providence has now become qualified, it is able to sell to retail electric suppliers the RPS Attributes associated with its electrical energy. Retail electric suppliers need to purchase RPS Attributes associated with renewable energy and not necessarily the energy itself. Thus, electrical energy and RPS Attributes are separable products and need not be sold or purchased as a bundled product. Retail electric suppliers in Massachusetts will then use the purchase of such RPS Attributes to demonstrate compliance with the Restructuring Act and RPS regulations.

During 2004, Ridgewood Providence became qualified to sell RPS Attributes in Connecticut under a similar RPS program, except that the Connecticut program does not have a “vintage” prohibition, which in Massachusetts disqualifies the amount of a facility’s generation of electric energy measured by its average output during the period 1995 through 1997. Thus, Ridgewood Providence can sell the 86,000 megawatt hours (“MWh”) that are ineligible under Massachusetts standards into the Connecticut market. During 2006, 2005 and 2004, Ridgewood Providence sold its “vintage” RPS Attributes pursuant to agreements with various power marketers.

Similar agreements have committed Ridgewood Providence to sell its 2007 “vintage” RPS Attributes to such designated parties at certain fixed quantities and prices. Pursuant to the terms of the agreement, Ridgewood Providence is only required to deliver the specified RPS Attributes it generates and is not obligated to produce, nor is it subject to penalty if it is unable to produce, contracted quantities.

Ridgewood Providence and the Trust, along with Trust III and RRIG, are evaluating expanding the generation facilities at the site. If such expansion were to occur, the Trust may make an additional investment in Ridgewood Providence.

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Ridgewood Pump Services

Ridgewood Pump Services IV Partners, L.P. ("Ridgewood Pump Services") was formed in 1995. Ridgewood Pump Services purchased a package of irrigation service engines (the “Pumping Project") located in Ventura County, California. The purchase price was approximately $354,000 and from 1996 to 1998, the Trust bought additional engines from unaffiliated sellers. The Trust's total investment in the Pumping Project was approximately $877,000. RPM operates and manages the Pumping Project. Prior to its acquisition by the Trust, the Pumping Project had been operating since 1992 and had 20 natural-gas-fired reciprocating engines with a maximum rated equivalent capacity of approximately 2.4MW, providing power for irrigation wells furnishing water for citrus orchards. The power was purchased by local farmers and farmers' co-operatives pursuant to electric services contracts. The revenue generated from the Pumping Project was not material to the Trust’s operating results and in January 2006, the engines were sold for $1 to the local operator.

Indeck

On June 11, 1997, the Trust and Trust V (collectively the “Ridgewood Indeck Investors”) purchased, through capital contributions totaling $14.2 million, equal portions in a preferred membership interest in Indeck Maine Energy, L.L.C., an Illinois limited liability company (“Indeck Maine”) that owns two electric power generating stations fueled by clean wood biomass at West Enfield, Maine and Jonesboro, Maine. Indeck, an entity unaffiliated with the Trust, owns the remaining membership interest in Indeck Maine and was the seller in the June, 1997 transaction. Ridgewood Indeck Investors have a preferred membership interest entitling them to receive all net cash flow from operations each year until they receive an 18% annual cumulative return on their capital contributions to Indeck Maine.

From January 1998 to June 2006, Ridgewood Indeck Investors in Indeck Maine loaned an aggregate of approximately $8.2 million to Indeck Maine, in proportion to their ownership interests.

Each of the Indeck Maine projects has a capacity of 24.5MW and each uses a steam turbine to generate electricity. The plants were commissioned in November 1986 and use wood chips, bark, tree limbs and tops and other forest-related biomass as fuel. The Indeck Maine projects are members of the New England Power Pool (“NEPOOL”) and have historically sold their output to the ISO New England (a regional transmission organization serving the New England states). In September 2007, Indeck Maine was awarded a six-month contract to supply electricity to a specified segment of the Maine electricity consumers market. It is anticipated that approximately 50% of the output of the plants during the period of the contract will be sold and delivered pursuant to this award.

Indeck Maine and several of its affiliates have an agreement with a power marketer for which they are committed to sell RPS Attributes derived from their electric generation. The agreement provides such power marketer with six separate annual options to purchase such attributes from 2004 through 2009 at fixed prices, as defined. If Indeck Maine and its affiliates fail to supply the required number of RPS Attributes, penalties may be imposed. In accordance with the terms of the agreement, if the power marketer elects to exercise an annual option and Indeck Maine and its affiliates produce no RPS Attributes for such option year, Indeck Maine and its affiliates face a maximum penalty, which is adjusted annually for the change in the consumer price index, among other things, of approximately $3,283,000, measured using current factors, for that option year and any other year in which an option has been exercised and no RPS Attributes have been produced. Pursuant to the agreement, Indeck Maine is liable for 70% of the total penalty, but may be liable up to 100% in the event of a default of its affiliates.

The plants are operated and maintained by RPM, on an at-cost basis and their output qualifies for section 45 federal tax credits. The federal tax credit eligibility of the projects is expected to continue until the fourth quarter of 2009.

Maine Hydro

In 1996, the Trust and Trust V formed Ridgewood Maine Hydro Partners, L.P. (“Maine Hydro”) for the purpose of acquiring a portfolio of hydroelectric facilities from CHI Energy, Inc. The Trust and Trust V own equal interests in Maine Hydro. On December 23, 1996, Maine Hydro acquired 14 hydroelectric projects located in Maine from CHI Energy, Inc. for $13.4 million. The projects acquired have a combined 11.3MW of generating capacity and are operated under contract by RPM on an at-cost basis. The acquired projects were commissioned between 1980 and 1987.

Since before the time of the acquisition by Maine Hydro, the electricity generated by the Maine Hydro projects has been sold under long-term electricity sales contracts with either Central Maine Power or Bangor Hydro-Electric Company. Eleven of the purchase agreements expire at the end of 2008 and one each expires in 2007, 2014 and 2017. When the contracts expire, it is anticipated that the affected projects will sell their output on the wholesale power market.

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Significant Customers and Supplier

During 2006, 2005 and 2004, the Trust’s two largest customers, NEP and Select Energy, accounted for 80.7%, 79.5% and 77.9%, respectively, of total revenues. During 2006, 2005 and 2004, the Trust purchased 100% of its landfill gas from one supplier, CGLP.

Business Segments

Power generation is the only business segment within which the Trust manages and evaluates its operations.

Project Feedstock/Raw Materials

The Ridgewood Providence and Indeck projects of the Trust each convert a raw material into a finished product and the arrangements for obtaining these raw materials are a key element in the business of the Trust. The landfill facilities consist of reciprocating engine generator sets that use methane-containing landfill gas as fuel. Each project location owns and operates a network of wells, pipes and fans that collect gas from the landfills as produced through natural anaerobic digestion of the waste. Ridgewood Providence does not own or operate the landfill but has arrangements with site owner/operator which give the projects certain rights, including the right to build the projects, occupy the compound, operate the gas collection system and use the gas from the landfill. This agreement is a long-term agreement and includes provisions for royalty payments from the projects to the landfill operator as compensation for the granting of these rights.

The Trust’s hydroelectric projects are all located on, and are integral parts of, dams on river ways. Most of the projects of the Trust are considered run-of-river, meaning that they generate such electricity as the natural flow of the river will produce with little or no ability to alter its flow rate or store water up-river of the dam. Output of these projects (and hence revenue) is characterized by high degrees of variability and seasonality. The projects do not make payments for throughput water.

Competition

Power generated from Ridgewood Providence and Maine Hydro is sold pursuant to long-term contracts. Since Indeck Maine has historically sold output in its wholesale markets, competition is focused on wood supplies as the projects compete mostly with non-power generation businesses like paper and lumber companies for forest material. This competition is based on price, consistency of demand and relationships with suppliers. The Indeck Maine projects also compete for this material, in part, by their ability to use clean biomass that is waste-wood in certain other applications. Also, there are geographic limits to this competition because this clean biomass can only be economically transported over relatively short distances. Beginning in 2006, Indeck Maine has attempted to compete in the market to deliver electricity to final customers through supply auctions. Success in such auctions is based largely on price, reliability and financial strength but success can bring higher prices to the Indeck Maine projects than are available in the wholesale market.

Seasonality/Weather Effects

Ground conditions in the tree harvesting areas that Indeck Maine projects look to for fuel can have a considerable impact on the price, quality and availability of that fuel. During periods of spring and fall rains and during periods of spring thaw, fuel suppliers may not have suitable access to tree-harvesting areas for the purpose of bringing fuel out of those areas. Also, fuel collected during these times tends to have a higher moisture content which reduces its value as a fuel. The prices received by Indeck Maine for its electricity output follow seasonal demand trends so that prices tend to be lower in the moderate spring and fall and higher in the winter and summer as demand for heating and cooling increases.

The output of the Trust’s hydroelectric projects is affected by seasonal weather patterns including rainfall and snowpack runoff. These factors tend to concentrate the output of these projects in the spring and fall with little or no output in the winter and summer months. Management of these sites takes advantage of these patterns to perform maintenance during periods of low output. Because river flows are the dominant factor in determining the output of the hydroelectric projects, output can vary widely from year-to-year based on amounts of rain and snowfall.

Government Incentives and Regulation

Certain of the projects of the Trust qualify for incentives because of their location or their use of renewable fuels.

In 1997, Massachusetts enacted the Electric Restructuring Act of 1997 (the “Restructuring Act”). Among other things, the Restructuring Act requires that all retail electricity suppliers in Massachusetts (i.e., those entities supplying electric energy to retail end-use customers in Massachusetts) purchase a minimum percentage of their electricity supplies from qualified new renewable generation units powered by one of several renewable fuels, such as solar, biomass or landfill. Beginning in 2003, each such retail supplier must obtain at least one (1%) percent of its supply from qualified new renewable generation units. Each year thereafter, the requirement increases one-half of one percentage point until 2009, when the requirement equals four (4%) percent of each retail supplier’s sales in that year. Subsequent to 2009, the increase in the percentage requirement will be determined and set by DOER.

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On January 17, 2003, Ridgewood Providence received a “Statement of Qualification” from the DOER pursuant to the RPS adopted by Massachusetts.  During 2004, Ridgewood Providence also became qualified to sell RPS Attributes in Connecticut under a similar RPS program, except that the Connecticut program does not have a “vintage” prohibition, which in Massachusetts disqualifies the amount of a facility’s generation of electric energy measured by its average output during the period 1995 through 1997. Thus, Ridgewood Providence can sell the 86,000 MWhs that are ineligible under Massachusetts standards into the Connecticut market.

On July 8, 2002, Indeck Maine received a “Statement of Qualification” from the DOER pursuant to the renewable portfolio standards (“RPS”) adopted by Massachusetts.

Since Ridgewood Providence and Indeck Maine have been qualified, they have sold to retail electric suppliers the RPS Attributes associated with their electrical energy. Retail electric suppliers need to purchase RPS Attributes associated with renewable energy and not necessarily the energy itself. Thus, electrical energy and RPS Attributes are separable products and need not be sold or purchased as a bundled product. Retail electric suppliers in Massachusetts and Connecticut will then use the purchase of such RPS Attributes to demonstrate compliance with the Restructuring Act and RPS regulations.

The hydroelectric projects operate under the terms of the Federal Energy Regulatory Commission (“FERC”) licenses issued to them. Even though these projects have no employees, they are affected by general employment regulations in the jurisdictions of its facilities through the RPM operations and maintenance agreements. The Trust considers these regulations to be routine and does not consider the cost of compliance to be material.

Insurance

The Trust has in place, either directly or through investee companies, insurance typical for activities such as those conducted by the Trust. These policies include property and casualty, business interruption and workman’s compensation insurance, which the Trust believes to be appropriate. Certain of the insurance carried by the Trust are required by the lenders of certain investee companies.

Employees

The Trust does not have employees. The activities of the Trust are performed either by employees of the Managing Shareholder, its affiliates or those of the specific investments of the Trust.

Offices

The principal office of the Trust is located at 1314 King Street, Wilmington, Delaware, 19801 and its phone number is 302-888-7444. The Managing Shareholder’s principal office is located at 947 Linwood Avenue, Ridgewood, New Jersey, 07450 and its phone number is 201-447-9000.

Available Information

The Trust’s shares are registered under Section 12(g) of the Exchange Act. The Trust must therefore comply with, among other things, the periodic reporting requirements of Section 13(a) of the Exchange Act. As a result, the Trust prepares and files annual reports with the SEC on Form 10-K, quarterly reports on Form 10-Q and, from time to time, current reports on Form 8-K. Moreover, the Managing Shareholder maintains a website at http://www.ridgewoodpower.com that contains important information about the Managing Shareholder, including biographies of key management personnel, as well as information about the investments made by the Trust and the other investment programs managed by the Managing Shareholder.

Where You Can Get More Information

The Trust files annual, quarterly and current reports and certain other information with the SEC. Persons may read and copy any documents the Trust files at the SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549. You may obtain information on the operation at the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. A copy of any such filings will be provided free of charge to any shareholder upon written request to the Managing Shareholder at its business address - 947 Linwood Avenue, Ridgewood, New Jersey 07450, ATTN: General Counsel.

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Reports to Shareholders

The Trust does not anticipate providing annual reports to shareholders but will make available upon request copies of the Trust’s periodic reports to the SEC on Form 10-K and on Form 10-Q.

ITEM 1A. RISK FACTORS

In addition to the other information set forth elsewhere in this report, you should carefully consider the following factors when evaluating the Trust:

RISKS INHERENT IN THE BUSINESSES OF THE TRUST

The Trust has material weaknesses in its disclosure controls and procedures.

Material weaknesses in disclosure controls and procedures have been identified by management of the Trust. These weaknesses primarily relate to the Trust’s inability to complete its reporting obligations on a timely basis as a result of deficient disclosure controls and procedures. See Item 9A. “Controls and Procedures” in this report. The inability of the Trust to timely report its results could impact the ability of an investor to adequately understand its investment, restrict the Trust’s ability to conduct its activities and subject the Trust to fines and penalties. Upon further review, the Trust may also determine that it has material weaknesses in its internal control over financial reporting.

The Trust’s landfill methane business depends on the production of landfill methane from the landfill sites on which they operate and access to that gas production.

The electricity production of the Ridgewood Providence project is typically limited by the available amount of landfill methane gas used as fuel by the project. A number of factors influence the amount of landfill methane gas produced by a landfill site including the quantity and makeup of the waste deposited into the site by the landfill operator, the manner and sequence of the waste deposition, the non-waste materials used to support the landfill structure and the amount of liquid in the landfill. A number of factors also influence the ability of the Trust’s personnel to gain access to gas that is being produced by a landfill including the land filling strategy and practices of the landfill site operator. To the extent that these factors limit the production of landfill methane gas or the ability of the project to collect and use that gas, Ridgewood Providence may not achieve profitable output levels.

The Trust’s Ridgewood Providence business is subject to interruption of its business operations.

The electric generating plant owned by Ridgewood Providence is located on property owned by the landfill from which Ridgewood Providence derives the methane gas to power its plant. If the landfill expands in the direction of the electric generating plant it is possible that the site on which the electric generating plant is located may be included in such expansion. If such an expansion occurs, Ridgewood Providence might have to relocate or abandon the electricity generating plant.  Were this to occur, Ridgewood Providence could face a temporary or permanent loss of the revenues from this plant.

The Trust’s biomass business can be affected by factors including weather and business conditions in other industries.

Greater than normal amounts of rain or snowfall, while benefiting hydroelectric projects of the Trust, could adversely affect the ability of suppliers to provide wood fuel to the Indeck Maine projects, which could result in increased supply costs. Conversely, moderate weather could adversely affect the prices Indeck Maine receives for its electricity generation. As a result, the projects could have to reduce production, or alternatively, suspend its operations. Changes in conditions of the paper, lumber or other wood-products industries in the area of the plants could increase competition for the material used by the Indeck Maine projects for fuel. Such a circumstance could adversely impact operations of the projects by reducing availability of fuel to the plants or by increasing the cost of fuel.

The Trust’s hydroelectric business can be affected by adverse weather conditions.

The Trust’s hydroelectric generation projects rely on rainfall and snowfall to provide water flow for electricity production. Rainfall and snowfall vary from year-to-year and an extended period of below-normal rainfall and/or snowfall would significantly reduce electricity revenue. Each project is entirely dependent on the water flow through where it is located.

Certain of the Trust’s projects sell all or a portion of their electricity output at open market prices and could be adversely affected should prices fall substantially.

Portions of the Trust’s revenues come from open market pricing and the reliance on this pricing will be increasing over the next few years. Should the price of electricity fall substantially, the Trust would be adversely affected and it is possible that the projects affected could not be operated profitably.

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The operations of the Trust have limited capital, limited access to new capital and have obligations to third parties for borrowed money.

The Trust’s investments, but not the Trust itself, have in the past utilized debt financing. Debt financing could increase the variability of results and could increase the financial risk of the Trust. In such cases, the rights of the Trust to the cash flow of the projects would typically be subordinated to the obligations of the projects under the debt facilities, which could limit the Trust’s ability to receive cash distributions from its investments.

The operations of the Trust may experience competitive price pressure and competition for project development opportunities.

Competition for new project opportunities is based largely on price, service and reliability. While it is difficult to displace the existing projects of the Trust from their customers, competition exists for new projects and this competition may, in some circumstances, drive down the prices of the products and services offered by the Trust’s projects or drive up the costs of its feedstock resources.

The projects of the Trust depend on the near-continuous operation of their equipment. Should the productivity of some or all of this equipment be compromised or should the equipment fail altogether, the Trust would be adversely affected. The Trust may also experience difficulty in hiring qualified operating personnel.

The primary equipment of the Trust includes mechanical fuel handling systems, circulating fluidized bed boilers, turbine generator sets, reciprocating engine generator sets and hydroelectric generating equipment. This equipment is subject to mechanical failure that the Trust may not be able to predict and that can render specific projects inoperable for considerable periods of time. This risk also extends to failures of the electricity grid near the Trust’s projects that could prevent the affected project or projects from delivering its electricity. In addition, the Trust may experience price increases for, or difficulty in obtaining, spare parts for its projects and in identifying and hiring personnel qualified to operate, maintain and repair the specialized equipment that make up parts of its projects.

The projects of the Trust are subject to regulatory changes (including changes in environmental regulations) that could significantly reduce revenues or increase expenses of the Trust.

This area of risk is inherently difficult to predict but could include matters such as the owners of dams or hydroelectric generators to provide for fish passages either upstream or downstream of the dams that affect Maine Hydro. Such changes could increase costs at affected projects or prevent certain projects from operating.

The Indeck Maine and Ridgewood Providence projects derive a significant portion of their income from renewable energy incentive programs sponsored by state governments. Should states reduce, eliminate or change the compliance requirements for these programs such changes could have a materially adverse impact on the financial performance of the Trust’s investment in the Ridgewood Providence and the Indeck Maine projects.

The Trust may become involved in litigation.

The Trust faces an inherent business risk of exposure to various types of claims and lawsuits that may arise in the ordinary course of business. Although it is not possible to predict the timing, nature or outcome of such claims or lawsuits should they arise, we believe the chances that any claims or lawsuits arising and resulting, individually or in the aggregate, in a material impact on the Trust to be remote. However, the Trust could in the future incur judgments or enter into settlements of lawsuits and claims that could have a material adverse effect on the results of the Trust. In addition, while the Trust maintains insurance coverage with respect to certain claims, the Trust may not be able to obtain such insurance on acceptable terms in the future, if at all, and any such insurance may not provide adequate coverage against any such claims.

RISKS RELATED TO THE NATURE OF THE TRUST’S SHARES

The Trust’s shares have severe restrictions on transferability and liquidity and shareholders are required to hold the shares indefinitely.

The Trust’s shares are illiquid investments. There is currently no market for these shares and one is not likely to develop. Because there may be only a limited number of persons who purchase shares and because there are significant restrictions on the transferability of such shares under the Trust’s Declaration of Trust and under applicable federal and state securities laws, it is expected that no public market will develop. Moreover, neither the Trust nor the Managing Shareholder will provide any market for the shares. Shareholders are generally prohibited from selling or transferring their shares except in the circumstances permitted under the Declaration of Trust and applicable law, and all such sales or transfers require the Trust’s consent, which it may withhold at its sole discretion. Accordingly, shareholders have no assurance that an investment can be transferred and must be prepared to bear the economic risk of the investment indefinitely.

8

Shareholders are not permitted to participate in the Trust’s management or operations and must rely exclusively on the Managing Shareholder.

Shareholders have no right, power or authority to participate in the Trust’s management or decision making or in the management of the Trust’s projects. The Managing Shareholder has the exclusive right to manage, control and operate the Trust’s affairs and business and to make all decisions relating to its operation.

The Trust’s assets are generally illiquid and any disposition of Trust assets is at the discretion of the Managing Shareholder.

The Trust’s interest in projects is illiquid. However, if the Trust were to attempt to sell any such interest, a successful sale would depend upon, among other things, the operating history and prospects for the project or interest being sold, the number of potential purchasers and the economics of any bids made by them. The Managing Shareholder has full discretion to determine whether any project, or any partial interest, should be sold and the terms and conditions under which such project would be sold. Consequently, shareholders will depend on the Managing Shareholder for the decision to sell all or a portion of an asset, or retain it, for the benefit of the shareholders and for negotiating and completing the sale transaction.

The Trust indemnifies its officers, as well as the Managing Shareholder and its employees, for certain actions taken on its behalf. Therefore, the Trust has limited recourse relative to these actions.

The Declaration of Trust provides that the Trust’s officers and agents, the Managing Shareholder, the affiliates of the Managing Shareholder and their respective directors, officers and agents when acting on behalf of the Managing Shareholder or its affiliates on the Trust’s behalf, will be indemnified and held harmless by the Trust from any and all claims rising out of the Trust’s management, except for claims arising out of bad faith, gross negligence or willful misconduct or a breach of the Declaration of Trust. Therefore, the Trust may have difficulty sustaining an action against the Managing Shareholder, or its affiliates and their officers based on breach of fiduciary responsibility or other obligations to the shareholders.

The Managing Shareholder is entitled to receive a management fee regardless of the Trust’s profitability and also receives cash distributions.

The Managing Shareholder is entitled to receive an annual management fee from the Trust regardless of whether the Trust is profitable in that year. The annual fee, payable monthly, is equal to 3% of the Trust's prior year net asset value. In addition to its annual management fee, the Managing Shareholder, as compensation for its management services, will receive 20% of the Trust’s cash distributions to shareholders upon the shareholders having received a certain minimum level of distributions as set out in the Declaration of Trust, even though the Managing Shareholder has not contributed any cash to the Trust. Accordingly, shareholders contribute all of the cash utilized for the Trust’s investments and activities. If the Trust’s projects are unsuccessful, the shareholders may lose 100% of their investment while the Managing Shareholder will not suffer any investment losses because it did not contribute any capital. None of the compensation to be received by the Managing Shareholder has been derived as a result of arm’s length negotiations.

Cash distributions are not guaranteed and may be less than anticipated or estimated.

Distributions depend primarily on available cash from project operations. At times, distributions have been delayed to repay the principal and interest on project or Trust borrowings, if any, or to the Trust’s other costs. The Trust’s taxable income will be taxable to the shareholders in the year earned, even if cash is not distributed.

Because the Managing Shareholder manages other electricity generation and infrastructure trusts, it may have conflicts of interest in its management of the Trust’s operations.

Shareholders will not be involved in the management of the Trust’s operations. Accordingly, they must rely on the Managing Shareholder’s judgment in such matters. Inherent with the exercise of its judgment, the Managing Shareholder will be faced with conflicts of interest. While neither the Trust nor the Managing Shareholder have specific procedures in place in the event of any such conflicting responsibilities, the Managing Shareholder recognizes that it has fiduciary duties to the Trust in connection with its position and responsibilities as Managing Shareholder and it intends to abide by such fiduciary responsibilities in performing its duties. Therefore, the Managing Shareholder and its affiliates will attempt, in good faith, to resolve all conflicts of interest in a fair and equitable manner with respect to all parties affected by any such conflicts of interest. However, the Managing Shareholder is not liable to the Trust for how conflicts of interest are resolved unless it has acted in bad faith, or engaged in gross negligence or willful misconduct.

9

TAX RISKS ASSOCIATED WITH AN INVESTMENT IN SHARES

The Trust is organized as a Delaware trust and the Managing Shareholder has qualified the Trust as a partnership for federal tax purposes. The principal tax risks to shareholders are that:

· The Trust may recognize income taxable to the shareholders but may not distribute enough cash to cover the income taxes owed by shareholders on the Trust’s taxable income.

· The allocation of Trust items of income, gain, loss, and deduction may not be recognized for federal income tax purposes.

· All or a portion of the Trust’s expenses could be considered either investment expenses (which would be deductible by a shareholder only to the extent the aggregate of such expenses exceeded 2% of such shareholder’s adjusted gross income) or as nondeductible items that must be capitalized.

· All or a substantial portion of the Trust’s income could be deemed to constitute unrelated business taxable income, such that tax-exempt shareholders could be subject to tax on their respective portions of such income.

· If any Trust income is deemed to be unrelated business taxable income, a shareholder that is a charitable remainder trust could have all of its income from any source deemed to be taxable.

· All or a portion of the losses, if any, allocated to the shareholders will be passive losses and thus deductible by the shareholder only to the extent of passive income.

· The shareholders could have capital losses in excess of the amount that is allowable as a deduction in a particular year.

Although the Trust has obtained an opinion of counsel regarding the matters described in the preceding paragraph, it will not obtain a ruling from the IRS as to any aspect of the Trust’s tax status. The tax consequences of investing in the Trust could be altered at any time by legislative, judicial, or administrative action.

If the IRS audits the Trust, it could require investors to amend or adjust their tax returns or result in an audit of their tax.

The IRS may audit the Trust’s tax returns. Any audit issues will be resolved at the Trust level by the Managing Shareholder.

If adjustments are made by the IRS, corresponding adjustments will be required to be made to the federal income tax returns of the shareholders, which may require payment of additional taxes, interest, and penalties. An audit of the Trust’s tax return may result in the examination and audit of a shareholder’s return that otherwise might not have occurred, and such audit may result in adjustments to items in the shareholder’s return that are unrelated to the Trust’s operations. Each shareholder bears the expenses associated with an audit of that shareholder’s return.

In the event that an audit of the Trust by the IRS results in adjustments to the tax liability of a shareholder, such shareholder will be subject to interest on the underpayment and may be subject to substantial penalties.

The tax treatment of the Trust cannot be guaranteed for the life of the Trust. Changes in laws or regulations may adversely affect any such tax treatment.

Deductions, credits or other tax consequences may not be available to shareholders. Legislative or administrative changes or court decisions could be forthcoming which would significantly change the statements herein. In some instances, these changes could have substantial effect on the tax aspects of the Trust. Any future legislative changes may or may not be retroactive with respect to transactions prior to the effective date of such changes. Bills have been introduced in Congress in the past and may be introduced in the future which, if enacted, would adversely affect some of the tax consequences of the Trust.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2.  PROPERTIES

Information regarding the Trust’s properties is contained in Item 1. “Business”, under the heading “Projects and Properties”.

ITEM 3.  LEGAL PROCEEDINGS

On August 16, 2006, the Trust and several affiliated entities, including the Managing Shareholder, filed a lawsuit against the former independent registered public accounting firm for the Trust and several affiliated entities, Perelson Weiner LLP (“Perelson Weiner”), in New Jersey Superior Court. The suit alleged professional malpractice and breach of contract in connection with audit and accounting services performed for the Trust and the other plaintiffs by Perelson Weiner. On October 20, 2006, Perelson Weiner filed a counterclaim against the Trust and the other plaintiffs, alleging breach of contract due to unpaid invoices in the total amount of approximately $1,188,000. Discovery is ongoing and no trial date has been set.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SECURITY HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There has never been an established public trading market for the Trust’s Investor Shares.

Holders

As of October 31, 2007 and December 31, 2006, there were 1,047 and 1,051 holders of Investor Shares, respectively.

Dividends

Trust distributions for the years ended December 31, 2006 and 2005 were as follows (in thousands, except per share data):

	2006		2005
Distributions to Investors	$	3,734	$	1,307
Distributions per Investor Share		8,000		2,500
Distributions to Managing Shareholder		38		13

ITEM 6.  SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with the Trust’s consolidated financial statements and related notes and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

The consolidated statement of operations data for the years ended December 31, 2006, 2005 and 2004 and the consolidated balance sheet data as of December 31, 2006 and 2005, are derived from audited financial statements included in this Form 10-K. The consolidated statement of operations data for the years ended December 31, 2003 and 2002 and the consolidated balance sheet data as of December 31, 2004, 2003 and 2002 are derived from audited consolidated financial statements not included in this Form 10-K.  The consolidated statement of operations and the consolidated balance sheet data for the year ended December 31, 2002 are derived from audited consolidated financial statements that have not been restated, and as a result, may not be comparable to subsequent periods.

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	December 31,
(in thousands, except per share data)	2006		2005		2004		2003			2002
Consolidated Statement of Operations Data (1):
Revenues	$	12,037	$	12,261	$	12,727	$	9,105		$	8,028
Net income (loss)		3,147		4,216		448		(1,314	)		(1,374	)
Net income (loss) per Investor Share		6,533		8,752		677		(2,728	)		(2,853	)
Consolidated Balance Sheet Data:
Plant and equipment, net		8,561		9,351		10,234		11,029			11,305
Total assets		23,668		24,404		22,054		24,554			27,633
Long-term debt (less current portion)		-		-		-		-			867
Minority interest		4,566		4,632		5,070		5,489			5,717
Shareholders' equity		17,934		17,838		14,887		15,853			18,960

(1) Increase in 2004 revenues was a result of Ridgewood Providence becoming qualified to sell to retail electric suppliers the RPS Attributes associated with its electrical energy in the states of Massachusetts and Connecticut.

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Trust’s Consolidated Financial Statements and Notes which appear elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. The Trust’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Overview

The Trust is a Delaware trust formed on September 8, 1994 to primarily make investments in projects and businesses in the energy and infrastructure sectors. RRP, a New Jersey limited liability company, is the Managing Shareholder. As the Managing Shareholder, RRP has direct and exclusive control over the management and operations of the Trust.

The Trust has focused primarily on small-scale electricity generation projects using renewable sources of fuel. These projects allow the Trust to develop secure long-term positions in attractive specialty markets for products and services provided by its projects and companies. As of December 31, 2006, the projects in which the Trust had investments were located in the United States. As of that date, the Trust had investments in landfill gas-fired electric generating projects with total capacity of 13.8MW, in biomass-fueled electricity generating projects with total generating capacity of 49MW and in hydroelectric generating projects with total capacity of 11.3MW.

The Trust’s accompanying consolidated financial statements include the financial statements of Ridgewood Providence and Ridgewood Pump Services. The Trust’s consolidated financial statements also include the Trust’s 25% interest in Indeck Maine and its 50% interest in Maine Hydro which are accounted for under the equity method of accounting as the Trust has the ability to exercise significant influence but does not control the operating and financial policies of these investments.

The Trust owns a 64.3% interest in Ridgewood Providence and the remaining 35.7% minority interest is owned by Trust III. The interests of Trust III are presented as minority interest in the consolidated financial statements of the Trust.

Critical Accounting Policies and Estimates

The discussion and analysis of the Trust’s financial condition and results of operations are based upon the Trust’s consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. In preparing these financial statements, the Trust is required to make certain estimates, judgments and assumptions. These estimates, judgments and assumptions affect the reported amounts of the Trust’s assets and liabilities, including the disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of the Trust’s revenues and expenses during the periods presented. The Trust evaluates these estimates and assumptions on an ongoing basis. The Trust bases its estimates and assumptions on historical experience and on various other factors that the Trust believes to be reasonable at the time the estimates and assumptions are made. However, future events and their effects cannot be predicted with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results may differ from these estimates and assumptions under different circumstances or conditions, and such differences may be material to the financial statements. The Trust believes the following critical accounting policies affect the more significant estimates and judgments in the preparation of the Trust’s consolidated financial statements.

12

Revenue Recognition

Power generation revenue is recorded in the month of delivery, based on the estimated volumes sold to customers at rates stipulated in the electric power sales contract. Adjustments are made to reflect actual volumes delivered when the actual volumetric information subsequently becomes available. Billings to customers for power generation generally occurs during the month following delivery. Final billings do not vary significantly from estimates.

Renewable attribute revenue is derived from the sale of the RPS Attributes. Qualified renewable electric generation facilities produce RPS Attributes when they generate electricity. Renewable attribute revenue is recorded in the month in which the RPS Attributes are produced as Ridgewood Providence has substantially completed its obligations for entitled benefits, represented by the underlying generation of power within specific environmental requirements.

Sublease revenue is recorded monthly in accordance with the terms of the sublease agreement.

Accounts Receivable

Accounts receivable are recorded at invoice price in the period the related revenues are earned, and do not bear interest. No allowance for bad debt expense was provided based upon historical write-off experience, evaluation of customer credit condition and the general economic status of the customers.

Plant and Equipment

Plant and equipment, consisting principally of electrical generating equipment, is stated at cost less accumulated depreciation. Renewals and betterments that increase the useful lives of the assets are capitalized. Repair and maintenance expenditures are expensed as incurred. Upon retirement or disposal of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheets. The difference, if any, between the net asset value and any proceeds from such retirement or disposal is recorded as a gain or loss in the statement of operations.

Depreciation is recorded using the straight-line method over the useful lives of the assets, which ranges from 5 to 20 years.

Impairment of Intangibles and Long-Lived Assets

The Trust evaluates intangible assets and long-lived assets, such as plant and equipment, when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The determination of whether impairment has occurred is made by comparing the carrying value of an asset to the estimated undiscounted cash flows attributable to that asset. If impairment has occurred, the impairment loss recognized is the amount by which the carrying value exceeds the estimated fair value of the asset, which is based on the estimated future cash flows discounted at the estimated cost of capital. The analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary.

Management Fee

The Trust is charged management fees from its Managing Shareholder. Unpaid management fees accrue interest at 10% per annum. The Managing Shareholder has periodically waived its right to receive a portion of the fees and related interest. Any waived management fees and interest are deemed capital contributions at the time of waiver.

Income Taxes

No provision is made for income taxes in the Trust’s consolidated financial statements as the income or losses of the Trust are passed through and included in the income tax returns of the individual shareholders of the Trust.

13

Results of Operations

Year ended December 31, 2006 compared to the year ended December 31, 2005

Revenues decreased by approximately $0.3 million, or 1.8%, from $12.3 million in 2005 to $12 million in 2006. The decrease in power generation revenue of $0.4 million was due to the sale of Ridgewood Pump Service operations in January 2006, partially offset by an increase of $0.1 million in revenues from Ridgewood Providence resulting from slightly higher production in 2006 compared to 2005.

Cost of revenues decreased by approximately $0.2 million, or 1.9%, from $9.4 million for 2005 to $9.2 million in 2006. This was primarily attributable to a decrease in cost of revenues of Ridgewood Pump Services by $0.4 million, partially offset by higher royalty expense of $0.2 million driven by increased revenue at Ridgewood Providence.

Gross profit of $2.8 million for 2006 decreased $0.1 million, or 1.5%,  from 2005 gross profit of $2.9 million. This decrease was primarily due to decreased revenues.

General and administrative expenses decreased by approximately $0.1 million from $0.3 million in 2005 to $0.2 million in 2006. The decrease was primarily attributable to lower professional fees.

The management fee due to the Managing Shareholder for 2006 was $0.5 million compared to $0.4 million for 2005. The management fee was paid to the Managing Shareholder for certain management, administrative and advisory services, office space and other facilities provided to the Trust. In 2006, the Managing Shareholder waived its right to receive $0.7 million of 2006 and prior years unpaid accrued management fees and interest.

In 2006, the Trust recorded equity income of $1 million from its investment in Maine Hydro compared to $0.6 million in 2005. The increase in equity income of approximately $0.4 million was primarily the result of the increase in revenues resulting from higher production and decrease in impairment expenses of property, plant and equipment and electricity sales agreements in 2006.

In 2006, the Trust recorded equity income of $0.6 million from its investment in Indeck Maine compared to $2.2 million in 2005. The decrease in equity income of approximately $1.6 million was primarily due to an increase in cost of revenues resulting from higher fuel expenses in 2006 compared to 2005.

Net income for the 2006 period was $3.1 million, a decrease of approximately $1.1 million from net income of $4.2 million for the comparable period in 2005. The decrease in net income was primarily due to a decrease in equity income from Indeck Maine, partially offset by an increase in equity income from Maine Hydro.

Year ended December 31, 2005 compared to the year ended December 31, 2004

Revenues decreased by approximately $0.4 million, or 3.7%, from $12.7 million in 2004 to $12.3 million in 2005. This decrease was primarily due to decreases of $0.3 million in power generation revenue and $0.1 million in renewable attribute revenue. Production output decreased by 3,078 MWh, or 3%, to 99,577 MWh in 2005 as compared to 2004.

Cost of revenues of $9.4 million for 2005 was comparable to cost of revenues in 2004.

Gross profit decreased by approximately $0.3 million, or 11.2%, from $3.2 million in 2004 to $2.9 million in 2005. Gross profit margin in 2005 decreased to 23.5% from 25.5% in 2004 primarily due to the decrease in revenues.

General and administrative expenses increased by approximately $0.1 million from $0.2 million in 2004 to $0.3 million in 2005. The increase was primarily attributable to higher professional fees.

The management fee due to the Managing Shareholder of $0.4 million for 2005 was comparable to the 2004 management fee. The management fee was paid to the Managing Shareholder for certain management, administrative and advisory services, office space and other facilities provided to the Trust.

Interest income increased by approximately $0.2 million, from $0.2 million in 2004 to $0.4 million in 2005, reflecting interest earned on a higher note receivable balance in the 2005 period.

In 2005, the Trust recorded equity income of $0.6 million from its investment in Maine Hydro compared to $0.5 million in 2004. The increase in equity income of $87,000 was primarily due to an increase in revenue resulting from higher production in 2005 compared to 2004, partially offset by an increase in cost of revenues. In addition, 2004 equity income included settlement of a legal complaint with the prior manager of the Maine Hydro projects which resulted in the receipt of $0.5 million in damages and the waiver of $0.4 million in fees as settlement of past due invoices, allocated equally between the Trust and Trust V.

14

In 2005, the Trust recorded equity income of $2.2 million from its investment in Indeck Maine compared to an equity loss of $1.6 million in 2004. The increase in equity income of $3.8 million was primarily due to an increase in gross profit in 2005 as compared to 2004 as a result of Indeck Maine experiencing increased revenues from the resumption of one of its operations (“Eastport Project”) in May 2004. This increase was partially offset by an increase in interest expense payable on member loans and increased general and administrative expenses.

Minority interest in the earnings of subsidiaries decreased $0.2 million, from earnings of $1.2 million in 2004 to $1 million in 2005. This was due to a decrease in the net earnings of Ridgewood Providence in 2005 as compared to 2004.

Net income for the 2005 period was $4.2 million, an increase of approximately $3.8 million from the net income of $0.4 million for the comparable period in 2004. The increase in net income was primarily due to an increase in equity income from Indeck Maine.

Liquidity and Capital Resources

Year ended December 31, 2006 compared to the year ended December 31, 2005

At December 31, 2006, the Trust had cash of $0.8 million, an increase of approximately $0.2 million from December 31, 2005. The cash flows for the year 2006 were $4.3 million provided by operating activities, $0.7 million provided by investing activities and $4.8 million used in financing activities.

In 2006, the Trust’s operating activities generated cash of $4.3 million compared to $3.9 million in 2005, an increase of approximately $0.4 million, primarily due to a decrease in accounts receivable resulting from improved collection efforts.

In 2006, investing activities provided cash of $0.7 million compared to cash used of $1.2 million in 2005, an increase of cash inflow of approximately $1.9 million. This increase in cash provided in 2006 was due to loans in 2005 made to Indeck Maine and Ridgewood Power B Fund/Providence Expansion (“B Fund”) of $1 million and $0.2 million, respectively.  In addition, the increase in cash inflow in 2006 was also due to the repayment of $0.2 million in notes receivable from the B Fund and $0.5 million in interest received on the Indeck Maine loan.

In 2006, the Trust used cash of $4.8 million in financing activities, primarily as a result of $1.1 million and $3.8 million used for cash distributions to minority interest and shareholders, respectively.  In 2005, the Trust used cash of $2.8 million, which includes $1.5 million and $1.3 million of cash distributions to minority interest and shareholders, respectively.

Year ended December 31, 2005 compared to the year ended December 31, 2004

At December 31, 2005, the Trust had cash of $0.6 million, a decrease of $93,000 from December 31, 2004. The cash flows for the year 2005 were $3.9 million provided by operating activities, $1.2 million used in investing activities and $2.8 million used in financing activities.

In 2005, the Trust’s operating activities generated cash of $3.9 million compared to $4.1 million in 2004, a decrease of approximately $0.2 million, primarily due to an increase in accounts receivable partially offset by an increase in net income.

In 2005, investing activities used $1.2 million compared to $1 million in 2004. The increase was primarily due to the $207,000 loan to B Fund.

In 2005, the Trust used cash of $2.8 million in financing activities, primarily as a result of $1.5 million used for cash distributions to minority interest holders and $1.3 million for cash distributions to shareholders. In 2004, the Trust used $3.1 million of cash in financing activities primarily as a result of $1.5 million used for cash distributions to shareholders, $1.6 million in cash distributions to minority interest holders and $0.8 million for term loan repayments. In addition, in 2004, the restricted cash balance of $0.8 million was applied to the outstanding term loan in accordance with the loan agreement.

Future Liquidity and Capital Resource Requirements

The Trust expects cash flows from operating activities, along with existing cash, will be sufficient to provide working capital and fund capital expenditures for the next 12 months.

15

Off-Balance Sheet Arrangements

The Trust has not entered into any off-balance sheet arrangements that either have, or are reasonable likely to have, a material adverse current or future effect on the Trust’s financial condition, revenues or expenses, result of operations, liquidity, capital expenditures or capital resources that are material to the Trust.

Contractual Obligations and Commitments

The Trust has no contractual obligations and commitments at December 31, 2006.

Recent Accounting Pronouncements

FIN 48 

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 will be effective for the Trust beginning January 1, 2007. The Trust does not believe that the adoption of FIN 48 will have a material impact on its consolidated financial statements.

SFAS 157

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting principles (GAAP) and expand disclosures about fair value measurements. SFAS 157 requires quantitative disclosures using a tabular format in all periods (interim and annual) and qualitative disclosures about the valuation techniques used to measure fair value in all annual periods. SFAS 157 will be effective for the Trust beginning January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 157.

SAB 108

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB 108 is effective for fiscal years ending on or after November 15, 2006. The adoption of this standard did not have a material impact on the Trust’s consolidated financial statements.

SFAS 159

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 will be effective for the Trust on January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 159 on its consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The disclosure required by this Item is omitted pursuant to Item 305(e) of Regulation S-K.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Trust, including the notes thereto and the report thereon, are presented beginning at page F-1 of this Form 10-K.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

16

ITEM 9A.  CONTROLS AND PROCEDURES

In accordance with Rule 13a-15(b) under the Exchange Act, the Trust’s Chief Executive Officer and Chief Financial Officer, evaluate the effectiveness of the Trust’s disclosure controls and procedures. A system of disclosure controls and procedures is designed to ensure that information required to be disclosed by a registrant in reports filed with the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms. This includes disclosure controls and procedures designed to ensure that information required to be disclosed by a registrant is accumulated and communicated to senior management so as to allow timely decisions regarding required disclosure. A review of these controls and procedures was done by the Trust as of December 31, 2006, which revealed that the following material weaknesses previously identified continue to exist:

(i) a lack of sufficient personnel with relevant experience to develop, administer and monitor disclosure controls and procedures to enable the Trust to comply efficiently, or on a timely basis, with its financial reporting obligations,

(ii) inadequate disclosure controls and procedures, including inadequate record retention and review policies, over both foreign and US operations, that would enable the Trust to meet its financial reporting and disclosure obligations in an efficient and timely manner.

As a result of these weaknesses, the Trust has not timely met its reporting obligations under the Exchange Act.

The Trust’s Chief Executive Officer and Chief Financial Officer have concluded that there was no change in the Trust's internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act, as amended) that occurred during the quarter ended December 31, 2006 that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

Since December 31, 2006, the Trust has implemented the following to address the above weaknesses:  

· Increased the number of degreed accountants. Additional staff expansion is underway.

· In May 2007, the Trust appointed a new Chief Financial Officer who is a Certified Public Accountant with approximately 29 years of professional accounting experience, including prior experiences as a financial officer of publicly traded companies.

The Trust believes that the completion of the expansion of the accounting and financial reporting staff and implementation of recommended procedures will mitigate the above weaknesses. However, due to the Trust’s delinquencies in meeting its filing deadlines under the Exchange Act, the Trust expects these deficiencies to continue to be material weaknesses at least until such time as the Trust is no longer delinquent in its Exchange Act filings.

The Trust’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Trust’s disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Exchange Act and concluded that, as of the end of the period covered by this report, because of the material weaknesses noted above, the Trust’s disclosure controls and procedures were not effective.   

Because the Trust is not an “Accelerated Filer” as defined in Rule 12b-2 of the Exchange Act, the Trust is not presently required to file Management’s annual report on internal control over financial reporting and the Attestation report of the registered public accounting firm required by Item 308(a) and (b) of Regulation S-K promulgated under the Securities Act of 1933, as amended.  Under current rules, because the Trust is neither a “large accelerated filer” nor an “accelerated filer”, the Trust is not required to provide management’s report on internal control over financial reporting until the Trust files its annual report for 2007 and compliance with the auditor’s attestation report requirement is not required until the Trust files its annual report for 2008.  The Trust currently expects to comply with these requirements at such time as the Trust is required to do so.

ITEM 9B.  OTHER INFORMATION

None.

17

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Trust’s Managing Shareholder, RRP, was originally founded in 1991. The Managing Shareholder has very broad authority, including the authority to elect executive officers of the Trust.

Each of the executive officers of the Trust also serves as an executive officer of the Managing Shareholder. The executive officers of the Trust are as follows:

Name, Age and Position with Registrant	Officer Since
Randall D. Holmes, 60
President and Chief Executive Officer	2004
Robert E. Swanson, 60
Chairman	1997
Jeffrey H. Strasberg, 50
Executive Vice President and Chief Financial Officer (1)	2007
Daniel V. Gulino, 47
Senior Vice President, General Counsel and Secretary	2000
Douglas R. Wilson, 48
Executive Vice President and Chief Financial Officer (1)	2005

(1) Mr. Strasberg replaced Mr. Wilson as Executive Vice President and Chief Financial Officer on May 2, 2007.

Set forth below is the name of and certain biographical information regarding the executive officers of the Trust:

Randall D. Holmes has served as President and Chief Executive Officer of the Trust since January 2006 and served as Chief Operating Officer of the Trust from January 2004 until January 2006. Mr. Holmes has also served as the President and Chief Operating Officer of the Managing Shareholder, and affiliated Power Trusts and LLCs since January 2004. Prior to such time, Mr. Holmes served as the primary outside counsel to and has represented the Managing Shareholder and its affiliates since 1991. Immediately prior to being appointed Chief Operating Officer, Mr. Holmes was counsel to Downs Rachlin Martin PLLC (“DRM”). DRM is one of the primary outside counsel to the Trust, the Managing Shareholder and its affiliates. He has maintained a minor consulting relationship with DRM in which he may act as a paid advisor to DRM on certain matters that are unrelated to Ridgewood. Such relationship will not require a significant amount of Mr. Holmes’ time and it is expected that such relationship will not adversely affect his duties as President and Chief Executive Officer. Mr. Holmes is a graduate of Texas Tech University and the University of Michigan Law School. He is a member of the New York State bar.

Robert E. Swanson has served as Chairman of the Trust, the Managing Shareholder and affiliated Power Trusts and LLCs since their inception. From their inception until January 2006, Mr. Swanson also served as their Chief Executive Officer. Mr. Swanson is the controlling member of the Managing Shareholder, as well as Ridgewood Energy and Ridgewood Capital, affiliates of the Trust. Mr. Swanson has been President and registered principal of Ridgewood Securities since its formation in 1982, has served as the Chairman of the Board of Ridgewood Capital since its organization in 1998 and has served as President and Chief Executive Officer of Ridgewood Energy since its inception in 1982. Mr. Swanson is a member of the New York State and New Jersey State Bars, the Association of the Bar of the City of New York and the New York State Bar Association. He is a graduate of Amherst College and Fordham University Law School.

Jeffrey H. Strasberg has served as Executive Vice President of the Trust, the Managing Shareholder, and affiliated Power Trusts and LLCs since May 2007. Mr. Strasberg also serves as Senior Vice President and Chief Financial Officer of Ridgewood Capital and affiliated LLCs and Ridgewood Securities and has done so since April 2005. Mr. Strasberg joined Ridgewood Capital in 1998 where his initial responsibilities were to serve as interim Chief Financial Officer of various portfolio companies in which Ridgewood Capital Trusts had interests. Mr. Strasberg is a Certified Public Accountant and a graduate of the University of Florida.

Daniel V. Gulino has served as Senior Vice President and General Counsel of the Trust, the Managing Shareholder and affiliated Power Trusts and LLCs since 2000 and was appointed Secretary in February 2007. Mr. Gulino also serves as Senior Vice President and General Counsel of Ridgewood Energy, Ridgewood Capital, Ridgewood Securities and affiliated Trusts and LLCs and has done so since 2000. Mr. Gulino is a member of the New Jersey State and Pennsylvania State Bars. He is a graduate of Fairleigh Dickinson University and Rutgers University School of Law.

Douglas R. Wilson served as Executive Vice President and Chief Financial Officer of the Trust, the Managing Shareholder and affiliated Power Trusts and LLCs from April 2005 until May 2007. Mr. Wilson continues to serve the Managing Shareholder as Executive Vice President and Chief Development Officer. Mr. Wilson has been associated with the Ridgewood group of companies as a consultant and advisor since 1996 performing investment evaluation, structuring and execution services for the trusts and entities managed by Ridgewood Capital LLC. From May of 2002, until its sale in 2007, Mr. Wilson has served as a Director, CEO and Finance Director for CLPE Holdings. Mr. Wilson is a graduate of the University of Texas at Arlington and has an MBA from the Wharton School at the University of Pennsylvania.

18

Board of Directors and Board Committees

The Trust does not have its own board of directors or any board committees. The Trust relies upon the Managing Shareholder to perform the function that a board of directors or its committees would otherwise perform. Officers of the Trust are not directly compensated by the Trust, and all compensation matters are addressed by the Managing Shareholder, as described in Item 11. “Executive Compensation”. Because the Trust does not maintain a board of directors and because officers of the Trust are compensated by the Managing Shareholder, the Managing Shareholder believes that it is appropriate for the Trust not to have a nominating or compensation committee.

Managing Shareholder

The Trust’s management agreement with the Managing Shareholder details how the Managing Shareholder is to render management, administrative and investment advisory services to the Trust. Specifically, the Managing Shareholder performs (or may arrange for the performance of) the management and administrative services required for the operation of the Trust. Among other services, the Managing Shareholder administers the accounts and handles relations with shareholders, provides the Trust with office space, equipment and facilities and other services necessary for its operation, and conducts the Trust’s relations with custodians, depositories, accountants, attorneys, brokers and dealers, corporate fiduciaries, insurers, banks and others, as required.

The Managing Shareholder is also responsible for making investment and divestment decisions, subject to the provisions of the Declaration of Trust. The Managing Shareholder is obligated to pay the compensation of the personnel and administrative and service expenses necessary to perform the foregoing obligations. The Trust pays all other expenses of the Trust, including transaction expenses, valuation costs, expenses of preparing and printing periodic reports for shareholders and the SEC, postage for Trust mailings, SEC fees, interest, taxes, legal, accounting and consulting fees, litigation expenses and other expenses properly payable by the Trust. The Trust reimburses the Managing Shareholder for all such Trust expenses paid by the Managing Shareholder.

As compensation for the Managing Shareholder’s performance under the Management Agreement, the Trust is obligated to pay the Managing Shareholder an annual management fee described below in Item 13. “Certain Relationships and Related Transactions, and Director Independence”.

Each investor in the Trust consented to the terms and conditions of the Management Agreement by subscribing to acquire Investor Shares in the Trust. The Management Agreement is subject to termination at any time on 60 days prior notice by a majority in interest of the shareholders or the Managing Shareholder. The Management Agreement is subject to amendment by the parties upon the approval of a majority in interest of the investors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Trust’s executive officers and directors, and persons who own more than 10% of a registered class of the Trust’s equity securities, to file reports of ownership and changes in ownership with the SEC. Based on a review of the copies of reports furnished or otherwise available to the Trust, the Trust believes that the filing requirements were not met by Robert E. Swanson during the year ended December 31, 2006 as he failed to timely file a Form 4. This report has since been filed with the SEC.

Code of Ethics

In March 2004, the Managing Shareholder, for itself and for the Trust and its affiliates adopted a Code of Ethics applicable to the principal executive officer, principal financial officer, principal accounting officer or controller (or any persons performing similar functions), of each such entity. A copy of the Code of Ethics is filed as Exhibit 14 to this Annual Report on Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION

The executive officers of the Trust do not receive compensation directly from the Trust or any of its subsidiaries. They provide managerial services to the Trust in accordance with the terms of the Trust’s Declaration of Trust. The Managing Shareholder, or affiliated management companies, determines and pays the compensation of these officers. Each of the executive officers of the Trust also serves as an executive officer of the Managing Shareholder and other trusts managed by the Managing Shareholder and its affiliates.

19

Compensation Discussion and Analysis

The executive officers of the Trust, Mr. Holmes, Mr. Swanson, Mr. Strasberg, Mr. Gulino and Mr. Wilson, are employed by, and are executive officers of, the Managing Shareholder and provide managerial services to the Trust in accordance with the terms of the Trust’s Declaration of Trust. The Trust does not have any other executive officers. The Managing Shareholder determines and pays the compensation of these officers. Each of the executive officers of the Trust also serves as an executive officer of each of the other investment trust managed by the Managing Shareholder. Messrs. Swanson, Strasberg and Gulino also serve in similar capacities for trusts managed by affiliates of the Managing Shareholder. Because the executive officers are not employees of the Trust and provide managerial services to all of the trusts managed by the Managing Shareholder and its affiliates in the course of such employment, they do not receive additional compensation for providing managerial services to the Trust.

The Managing Shareholder is fully responsible for the payment of compensation to the executive officers, and the Trust does not pay any compensation to its executive officers and does not reimburse the Managing Shareholder for the compensation paid to executive officers. The Trust does, however, pay the Managing Shareholder a management fee and the Managing Shareholder may determine to use a portion of the proceeds from the management fee to pay compensation to executive officers of the Trust. See Item 13. “Certain Relationships and Related Transactions, and Director Independence” for more information regarding Managing Shareholder compensation and payments to affiliated entities.

Report of the Managing Shareholder

Because the Trust is managed by the Managing Shareholder and does not have a Board of Directors or a Compensation Committee, the Managing Shareholder reviewed and discussed with management the Compensation Discussion and Analysis included in this Annual Report on Form 10-K. Based on such review and discussion, the Managing Shareholder determined that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

Submitted by the Managing Shareholder

Robert E. Swanson, Chairman

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information with respect to the beneficial ownership of the Trust’s Investor Shares as of December 31, 2006 (no person owns more than 5%) by:

· each executive officer of the Trust (there are no directors); and

· all of the executive officers of the Trust as a group.

Beneficial ownership is determined in accordance with SEC rules and includes voting or investment power with respect to the securities. Except as indicated by footnote, and subject to applicable community property laws, the persons named in the table below have sole voting and investment power with respect to all Investor Shares shown as beneficially owned by them. Percentage of beneficial ownership is based on 476.8875 Investor Shares outstanding at December 31, 2006. Other than as set forth below, no officer of the Trust owns any shares of the Trust.

Name of beneficial owner	Number of shares (1)	Percent
Ridgewood Renewable Power LLC (Managing Shareholder)        Robert E. Swanson,  controlling member	2.0331	*
Executive officers as a group	2.0331	*

*  Represents less than one percent.

(1) Does not include a Management Share in the Trust representing the beneficial interests and management rights of the Managing Shareholder in its capacity as the Managing Shareholder. The management share owned by the Managing Shareholder is the only issued and outstanding management share of the Trust. The management rights of the Managing Shareholder are described in further detail in Item 1. “Business”. Its beneficial interest in cash distributions of the Trust and its allocable share of the Trust’s net profits and net losses and other items attributable to the Management Share are described in further detail below at Item 13. “Certain Relationships and Related Transactions, and Director Independence”.

20

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Under the terms of the Management Agreement, the Managing Shareholder provides certain management, administrative and advisory services, and office space to the Trust. In return, the Trust is obligated to pay the Managing Shareholder an annual management fee equal to 3% of the Trusts’ prior year net asset value, which equals $535,000 for the year ended December 31, 2006, as compensation for such services. The management fee is to be paid in monthly installments and, to the extent that the Trust does not pay the management fee on a timely basis, the Trust accrues interest at an annual rate of 10% on the unpaid balance.

For the year ended December 31, 2006, the Trust accrued interest expense of $62,000 on accrued but unpaid management fees. The interest accrued has been waived by the Managing Shareholder and recorded as capital contribution in the period waived.

The shareholders of the Trust other than the Managing Shareholder were allocated 99% of each contribution and the Managing Shareholder was allocated 1% so that the amount of the contribution allocated offset the amount of the expense initially accrued. For the year ended December 31, 2006, the Trust made management fee payments to the Managing Shareholder of $257,000.  In the fourth quarter of 2006, the Managing Shareholder forgave $278,000 of 2006 unpaid accrued management fees and $381,000 of prior years unpaid accrued management fees, which were recorded as deemed capital contributions.

Under the Management Agreement with the Managing Shareholder, RPM, an entity related to the Managing Shareholder through common ownership, provides management, purchasing, engineering, planning and administrative services to the projects operated by the Trust. RPM charges the projects at its cost for these services and for the allocable amount of certain overhead items. Allocations of costs are on the basis of identifiable direct costs or in proportion to amounts invested in projects managed by RPM. For the year ended December 31, 2006, RPM charged the projects $1,533,000 for overhead items allocated in proportion to the amount invested in projects managed. In addition, RPM charged the projects $6,447,000 for all of the direct operating and non-operating expenses incurred during 2006.

Under the Declaration of Trust, the Managing Shareholder is entitled to receive, concurrently with the shareholders of the Trust other than the Managing Shareholder, 1% of all distributions from operations made by the Trust in a year until the shareholders have received distributions in that year equal to 14% of their equity contribution. Thereafter, the Managing Shareholder is entitled to receive 20% of the distributions for the remainder of the year. The Managing Shareholder is entitled to receive 1% of the proceeds from dispositions of Trust property until the shareholders other than the Managing Shareholder, have received cumulative distributions equal to their original investment (“Payout”). After Payout, the Managing Shareholder is entitled to receive 20% of all remaining distributions of the Trust. Distributions to the Managing Shareholder were $38,000 for the year ended December 31, 2006. The Trust has not yet reached Payout.

Income is allocated to the Managing Shareholder until the profits so allocated equal distributions to the Managing Shareholder. Thereafter, income is allocated among the shareholders other than the Managing Shareholder in proportion to their ownership of Investor Shares. If the Trust has net losses for a fiscal period, the losses are allocated 99% to the shareholders other than the Managing Shareholder and 1% to the Managing Shareholder, subject to certain limitations as set forth in the Declaration of Trust. Amounts allocated to shareholders other than the Managing Shareholder are apportioned among them in proportion to their capital contributions.

Under the terms of the Declaration of Trust, if the Adjusted Capital Account (as defined in the Declaration of Trust) of a shareholder other than the Managing Shareholder would become negative using General Allocations (as defined in the Declaration of Trust), losses and expenses will be allocated to the Managing Shareholder. Should the Managing Shareholder’s Adjusted Capital Account become negative and items of income or gain occur, then such items of income or gain will be allocated entirely to the Managing Shareholder until such time as the Managing Shareholder’s Adjusted Capital Account becomes positive. This mechanism does not change the allocation of cash, as discussed above.

On June 26, 2003, the Managing Shareholder entered into a Revolving Credit and Security Agreement with Wachovia Bank, National Association. The agreement, as amended, allows the Managing Shareholder to obtain loans and letters of credit of up to $6,000,000 for the benefit of the Trust and other trusts and funds that it manages. As part of the agreement, the Trust agreed to limitations on its ability to incur indebtedness, liens and to provide guarantees.

Related Persons Transactions

The Trust relies upon the Managing Shareholder to review and approve all transactions with related persons required to be reported under the rules of the SEC (“related person transactions”). Prior to approving a related person transaction, the Managing Shareholder considers the relevant facts and circumstances, including, to the extent applicable, the relationships between all parties that would qualify as “related persons” under the rules of the SEC and such person’s or entity’s relationship to the Trust, such person’s or entity’s interest in the transaction, and the material facts and terms of the transaction. The Managing Shareholder approves those transactions that it determines are entered into in good faith and on fair and reasonable terms for, and in the best interests of, the Trust. The Trust does not maintain a written policy in connection with this process. Instead, the Managing Shareholder’s determinations regarding which related person transactions to enter into on behalf of the Trust are evidenced in the business records of the Trust and the Managing Shareholder.

21

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees and services rendered by Grant Thornton LLP, the Trust’s principal accountant, for the years ended December 31, 2006 and 2005 (in thousands).

	2006		2005
Audit Fees*	$	317	$	173
Audit-Related Fees		-		-
Tax Fees		53		-
All Other Fees		-		-
Total	$	370	$	173
* The fees for 2005 were borne by the Managing Shareholder.

Audit Committee Pre-Approval Policy

The Managing Shareholder pre-approves on an annual basis all audit and permitted non-audit services that may be performed by the Trust’s independent registered public accounting firm, including the audit engagement terms and fees, and also pre-approves any detailed types of audit-related and permitted tax services to be performed during the year. The Managing Shareholder pre-approves permitted non-audit services on an engagement-by-engagement basis.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)           Financial Statements

See the Index to Financial Statements on page F-1 of this report.

(b)           Exhibits

Exhibits required by Section 601 of Regulation S-K:

Exhibit No.		Description
3	(i)(A)	Certificate of Trust of the Registrant (incorporated by reference to the Registrant’s Registration Statement filed with the SEC on or about January 24, 1995).
3	(i)(B)	Certificate of Amendment to the Certificate of Trust of the Registrant filed with Delaware Secretary of State on December 18, 2003 (incorporated by reference to the Registrant’s Annual Report on Form 10-K filed with the SEC on October 30, 2007).
3	(ii)(A)	Declaration of Trust of the Registrant (incorporated by reference to the Registrant’s Registration Statement filed with the SEC on or about January 24, 1995).
3	(ii)(B)	Amendment No. 1 to Amended and Restated Declaration of Trust of the Registrant (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1996; SEC File No. 000-25430).
3	(ii)(C)	Amendment No. 2 to the Amended and Restated Declaration of Trust (incorporated by reference to the Registrant’s Proxy Statement filed with the SEC on November 5, 2001; SEC File No. 000-25430).

22

Exhibit No.			Description
3	(ii)(D)		Amendment to the Amended Declaration of Trust of the Registrant effective January 1, 2005 (incorporated by reference to the Registrant’s Annual Report on Form 10-K filed with the SEC on October 30, 2007).
10.1		#	Management Agreement between the Trust and Managing Shareholder, dated January 3, 1995 (incorporated by reference to the Registrant’s Annual Report on Form 10-K or the year ended December 31, 1996; SEC File No. 000-25430).
10.2		*	Power Purchase Agreement between New England Power Company and Ridgewood Providence Power Partners, as successor in interest, dated November 1987 (as amended).
14			Code of Ethics, adopted on March 1, 2004 (incorporated by reference to Exhibit 14 of the Annual Report on Form 10-K filed by The Ridgewood Power Growth Fund with the SEC on March 1, 2006).
21		*	Subsidiaries of the Registrant.
31.1		*	Certification of Randall D. Holmes, Chief Executive Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a).
31.2		*	Certification of Jeffrey H. Strasberg, Chief Financial Officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a).
32		*	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Randall D. Holmes, Chief Executive Officer of the Registrant, and Jeffrey H. Strasberg, Chief Financial Officer of the Registrant.
99.1		*	Financial statements of Indeck Maine Energy, LLC.
99.2		*	Financial statements of Ridgewood Maine Hydro Partners, LP.

____________________

* Filed herewith. 

# A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.

(c)           Financial Statement Schedules

See Financial Statements and accompanying notes included in this report.

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RIDGEWOOD ELECTRIC POWER TRUST IV
Date:  December 14, 2007	By:	/s/ Randall D. Holmes
		Randall D. Holmes
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Capacity	Date
/s/ Randall D. Holmes	Chief Executive Officer	December 14, 2007
Randall D. Holmes	(Principal Executive Officer)
/s/ Jeffrey H. Strasberg	Executive Vice President and Chief Financial Officer	December 14, 2007
Jeffrey H. Strasberg	(Principal Financial and Accounting Officer)
RIDGEWOOD RENEWABLE POWER LLC
(Managing Shareholder)
By: /s/ Randall D. Holmes	Chief Executive Officer of Managing Shareholder	December 14, 2007
Randall D. Holmes

24

RIDGEWOOD ELECTRIC POWER TRUST IV

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at December 31, 2006 and 2005	F-3
Consolidated Statements of Operations for the three years ended December 31, 2006	F-4
Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the three years ended December 31, 2006	F-5
Consolidated Statements of Cash Flows for the three years ended December 31, 2006	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Managing Shareholder and Shareholders

Ridgewood Electric Power Trust IV

We have audited the accompanying consolidated balance sheets of Ridgewood Electric Power Trust IV (a Delaware trust) and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of operations, changes in shareholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2006. These consolidated financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ridgewood Electric Power Trust IV as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Edison, New Jersey

December 14, 2007

F-2

RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
	December 31,
	2006			2005
ASSETS
Current assets:
Cash	$	819		$	639
Accounts receivable		2,252			2,045
Notes receivable, affiliates – current portion		-			207
Due from affiliates		59			95
Prepaid expenses and other current assets		80			102
Total current assets		3,210			3,088
Notes receivable, affiliates – noncurrent portion		4,859			4,926
Investments		4,776			4,174
Plant and equipment, net		8,561			9,351
Intangibles, net		1,857			2,460
Other assets		405			405
Total assets	$	23,668		$	24,404
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	432		$	582
Accrued royalty expense		451			409
Due to affiliates		285			943
Total current liabilities		1,168			1,934
Minority interest		4,566			4,632
Total  liabilities		5,734			6,566
Commitments and contingencies
Shareholders’ equity (deficit):
Shareholders’ equity (476.8875 Investor Shares           issued and outstanding)		18,024			17,928
Managing Shareholder’s accumulated deficit          (1 management share issued and outstanding)		(90	)		(90	)
Total shareholders’ equity		17,934			17,838
Total liabilities and shareholders’ equity	$	23,668		$	24,404

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

F-3

RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
	Years Ended December 31,
	2006			2005			2004
Power generation revenue	$	7,503		$	7,676		$	7,979
Renewable attribute revenue		3,957			4,014			4,177
Sublease revenue		577			571			571
Total revenues		12,037			12,261			12,727
Cost of revenues		9,199			9,379			9,483
Gross profit		2,838			2,882			3,244
Operating expenses:
General and administrative expenses		163			316			174
Management fee to the Managing Shareholder		535			447			476
Total operating expenses		698			763			650
Income from operations		2,140			2,119			2,594
Other income (expense):
Interest income		435			354			172
Interest expense		(74	)		(67	)		(67	)
Equity in income of Maine Hydro		1,027			616			529
Equity in income (loss) of Indeck Maine		624			2,215			(1,630	)
Total other income (expense), net		2,012			3,118			(996	)
Income before minority interest		4,152			5,237			1,598
Minority interest in the earnings of subsidiaries		(1,005	)		(1,021	)		(1,150	)
Net income	$	3,147		$	4,216		$	448
Managing Shareholder – Net income	$	31		$	42		$	125
Shareholders – Net income		3,116			4,174			323
Net income per Investor Share		6,533			8,752			677

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

F-4

RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 2004, 2005 AND 2006
(in thousands)
	Shareholders' Equity			Managing Shareholder Deficit			Total Shareholders' Equity
Balance at January 1, 2004	$	16,083		$	(230	)	$	15,853
Net income		323			125			448
Cash distributions		(1,452	)		(14	)		(1,466	)
Capital contribution		52			-			52
Balance at December 31, 2004		15,006			(119	)		14,887
Net income		4,174			42			4,216
Cash distributions		(1,307	)		(13	)		(1,320	)
Capital contribution		55			-			55
Balance at December 31, 2005		17,928			(90	)		17,838
Net income		3,116			31			3,147
Cash distributions		(3,734	)		(38	)		(3,772	)
Capital contribution		714			7			721
Balance at December 31, 2006	$	18,024		$	(90	)	$	17,934

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

F-5

RIDGEWOOD ELECTRIC POWER TRUST IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Years Ended December 31,
	2006			2005			2004
Cash flows from operating activities:
Net Income	$	3,147		$	4,216		$	448
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		1,399			1,389			1,407
Change in rotable spare parts		(6	)		97			28
Forgiveness of unpaid and accrued interest on management fees		721			55			52
Interest income on notes receivable		(404	)		(339	)		(172	)
Minority interest in the earnings of subsidiaries		1,005			1,021			1,150
Equity interest in (income) loss of:
Maine Hydro		(1,027	)		(616	)		(529	)
Indeck Maine Hydro		(624	)		(2,215	)		1,630
Cash distributions from Maine Hydro		1,050			842			877
Changes in operating assets and liabilities
Accounts receivable		(207	)		(630	)		(443	)
Prepaid expenses and other current assets		22			13			(38	)
Accounts payable		(150	)		331			7
Accrued royalty expense		41			52			135
Due to/from affiliates, net		(622	)		(219	)		(111	)
Other assets		-			(105	)		(300	)
Total adjustments		1,198			(324	)		3,693
Net cash provided by operating activities		4,345			3,892			4,141
Cash flows from investing activities:
Repayment of notes receivable, affiliates		207			-			-
Loans to Indeck Maine		-			(1,000	)		(1,000	)
Loans to Ridgewood Power B Fund/ Providence Expansion		-			(207	)		-
Interest received on Indeck Maine loan		471			-			-
Captial expenditures		-			-			(35	)
Net cash provided by (used in) investing activities		678			(1,207	)		(1,035	)
Cash flows from financing activities:
Cash distributions to minority interest		(1,071	)		(1,458	)		(1,569	)
Cash distributions to shareholders		(3,772	)		(1,320	)		(1,466	)
Repayments of term loan		-			-			(867	)
Change in restricted cash		-			-			757
Net cash used in financing activities		(4,843	)		(2,778	)		(3,145	)
Net increase (decrease) in cash		180			(93	)		(39	)
Cash, beginning of year		639			732			771
Cash, end of year	$	819		$	639		$	732
Supplemental disclosure of cash flow information:
Interest paid	$	-		$	-		$	14

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

F-6

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

1.        DESCRIPTION OF BUSINESS

Ridgewood Electric Power Trust IV (the “Trust”) is a Delaware trust formed in September 1994. The Trust began offering shares on February 6, 1995 and concluded its offering on September 30, 1996. The objective of the Trust is to provide benefits to its shareholders through a combination of distributions of operating cash flow and capital appreciation. The Managing Shareholder of the Trust is Ridgewood Renewable Power LLC (“RRP” or the “Managing Shareholder”).

The Trust has been organized to invest primarily in independent power generation facilities, water desalinization plants and other infrastructure projects in the US. The projects owned by the Trust have characteristics that qualify the projects for government incentives. Among the incentives are ancillary revenue opportunities related to the fuel used by the power plants.

The Trust’s accompanying consolidated financial statements include its wholly-owned subsidiaries and the financial statements of Ridgewood Providence Power Partners, L.P. (“Ridgewood Providence”). The Trust’s consolidated financial statements also include the Trust’s 50% interest in Ridgewood Maine Hydro Partners, L.P. (“Maine Hydro”) and its 25% interest in Ridgewood Indeck Maine Energy, LLC (“Indeck Maine”) which are accounted for under the equity method of accounting as the Trust has the ability to exercise significant influence but does not control the operating and financial policies of these entities.

The revenues generated from Ridgewood Pump Services IV Partners, L.P. ("Pump Services"), a wholly-owned subsidiary of Trust IV, were not material to the Trust’s operating results for the periods presented, and in January 2006, the engines were sold for $1 to the local operator.  The Trust did not record any gain or loss on the sale as the assets of Pump Services were fully impaired in 2003.

The Trust owns 64.3% interest in Ridgewood Providence and the remaining 35.7% minority interest is owned by Ridgewood Electric Power Trust III (“Trust III”). The interest of Trust III is presented as minority interest in the consolidated balance sheets and statements of operations. Ridgewood Providence and the Trust, along with Trust III and RRIG, are evaluating expanding the generation facilities at the site. If such expansion were to occur, the Trust may make an additional investment in Ridgewood Providence.

The Managing Shareholder performs (or arranges for the performance of) the operation and maintenance of the projects invested in by the Trust and the management and administrative services required for Trust operations. Among other services, the Managing Shareholder administers the accounts and handles relations with the shareholders, including tax and other financial information. The Managing Shareholder also provides the Trust with office space, equipment and facilities and other services necessary for its operation.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Principles of Consolidation

The consolidated financial statements include the accounts of the Trust and its majority-owned subsidiaries. Minority interests of majority-owned subsidiaries are calculated based upon the respective minority interest ownership percentages. All material intercompany transactions have been eliminated in consolidation.

The Trust uses the equity method of accounting for its investments in affiliates which are 50% or less owned as the Trust has the ability to exercise significant influence over the operating and financial policies of the affiliates but does not control the affiliate. The Trust’s share of the earnings or losses of the affiliates is included in the consolidated financial statements.

F-7

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

b) Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires the Trust to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Trust evaluates its estimates, including accounts receivable, investments, recoverable value of plant and equipment, intangibles and recordable liabilities for litigation and other contingencies. The Trust bases its estimates on historical experience, current and expected conditions and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

c) Revenue Recognition

Power generation revenue is recorded in the month of delivery, based on the estimated volumes sold to customers at rates stipulated in the electric power sales contract. Adjustments are made to reflect actual volumes delivered when the actual volumetric information subsequently becomes available. Billings to customers for power generation generally occurs during the month following delivery. Final billings do not vary significantly from estimates.

Renewable attribute revenue is derived from the sale of the renewable portfolio standard attributes (“RPS Attributes”). As discussed in Note 8, qualified renewable electric generation facilities produce RPS Attributes when they generate electricity. Renewable attribute revenue is recorded in the month in which the RPS Attributes are produced as Ridgewood Providence has substantially completed its obligations for entitled benefits, represented by the underlying generation of power within specific environmental requirements.

Sublease revenue is recorded monthly in accordance with the terms of the sublease agreement.

d) Cash

Cash balances with banks as of December 31, 2006 and 2005 exceeded insured limits by $619 and $507, respectively.

e) Accounts Receivable

Accounts receivable are recorded at invoice price in the period in which the related revenues are earned, and do not bear interest. No allowance for bad debt expense was provided based upon historical write-off experience, evaluation of customer credit condition and the general economic status of the customers.

f) Plant and Equipment

Plant and equipment, consisting principally of a power generating facility, is stated at cost less accumulated depreciation. Renewals and betterments that increase the useful lives of the assets are capitalized. Repair and maintenance expenditures are expensed as incurred. Upon retirement or disposal of assets, the cost and the related accumulated depreciation are removed from the balance sheets. The difference, if any, between the net asset value and any proceeds from such retirement or disposal is recorded as a gain or loss in the statement of operations.

The Trust uses the straight-line method of depreciation over the estimated useful life of the assets:

Power generation facility	20 years
Equipment	5-20 years
Vehicles	5 years

Rotable spare parts inventory primarily consists of parts and materials that are infrequently used in the Trust’s operation.  An allowance is established for obsolescence on the basis of management’s review and assessment.

F-8

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

g) Impairment of Long-Lived Assets and Intangibles

The Trust evaluates intangible assets and long-lived assets, such as plant and equipment, when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. The determination of whether impairment has occurred is made by comparing the carrying value of an asset to the estimated undiscounted cash flows attributable to that asset. If impairment has occurred, the impairment loss recognized is the amount by which the carrying value exceeds the estimated fair value of the asset, which is based on the estimated future cash flows discounted at the estimated cost of capital. The analysis requires estimates of the amount and timing of projected cash flows and, where applicable, judgments associated with, among other factors, the appropriate discount rate. Such estimates are critical in determining whether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary.

h) Fair Value of Financial Instruments

At December 31, 2006 and 2005, the carrying value of the Trust’s cash, accounts receivable, accounts payable and accrued expenses approximates their fair value.

i) Comprehensive Income

The Trust's comprehensive income consists only of net income.

j) Significant Customers

During 2006, 2005 and 2004, the Trust’s two largest customers accounted for 80.7%, 79.5% and 77.9%, respectively, of total revenues. During 2006, 2005 and 2004, the Trust purchased 100% of its gas from one supplier.

k) Income Taxes

No provision is made for income taxes in the accompanying consolidated financial statements as the income or loss of the Trust is passed through and included in the income tax returns of the individual shareholders of the Trust.

l) Recent Accounting Pronouncements

FIN 48

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”) an interpretation of Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 will be effective for the Trust beginning January 1, 2007. The Trust does not believe that the adoption of FIN 48 will have a material impact on its consolidated financial statements.

SFAS 157

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS 157"), to define fair value, establish a framework for measuring fair value in accordance with generally accepted accounting principles (GAAP) and expand disclosures about fair value measurements. SFAS 157 requires quantitative disclosures using a tabular format in all periods (interim and annual) and qualitative disclosures about the valuation techniques used to measure fair value in all annual periods. SFAS 157 will be effective for the Trust beginning January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 157.

F-9

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

SAB 108

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements ("SAB 108"). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB 108 is effective for fiscal years ending on or after November 15, 2006. The adoption of this standard did not have a material impact on the Trust's consolidated financial statements.

SFAS 159

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 will be effective for the Trust on January 1, 2008. The Trust is currently evaluating the impact of adopting SFAS 159 on its consolidated financial statements.

3.         NOTES RECEIVABLE, AFFILIATES

In September 2005, the Trust loaned $207 to Ridgewood Power B Fund/Providence Expansion (“B Fund”), an affiliate of the Trust.  The note receivable was paid off by the B Fund during the first quarter of 2006.

At December 31, 2006, the Trust loan balance to Indeck Maine was $4,075. During 2005 and 2004, the Trust loaned $1,000 each year to Indeck Maine which bears interest at 18% and 12% per annum, respectively. The interest income accrued on the notes receivable for the years ended December 31, 2006, 2005 and 2004 was $404, $339 and $171, respectively, which is included in notes receivable affiliates in the consolidated balance sheets. Ridgewood Electric Power Trust V (“Trust V”) made identical loans to Indeck Maine.

The notes and the related accrued interest, which are payable on demand are subordinate to the $6 million mortgage loan agreement with Commerce Bank/North (“Commerce”) entered into by Indeck Maine on August 6, 2004. As a part of the subordination agreement, the Trust and Trust V (collectively  the “Ridgewood Indeck Investors”) have agreed that prior to the payment in full of the Commerce loan and termination of all obligations of Commerce, the Ridgewood Indeck Investors shall not, without prior written consent of Commerce, accelerate the maturity of all or any portion of the subordinated debt and related interest, or take any action towards collection of all or any portion of the subordinated debt or enforcement of any rights, powers or remedies under the subordinated debt documents.

On August 28, 2006, Indeck Maine and Commerce amended the mortgage loan note and subordination agreement, whereby, Indeck Maine was permitted to make payments of up to $2,500 to Ridgewood Indeck Investors and Indeck Energy Services LLC, an unaffiliated entity in 2006 towards outstanding obligations.  On December 18, 2006, Trust received $471of interest on the subordinated notes.

4.         PLANT AND EQUIPMENT

At December 31, 2006 and 2005, plant and equipment at cost and accumulated depreciation were:

	2006		2005
Power generation facility	$	15,914	$	16,924
Rotable spare parts		705		699
Equipment		24		24
Vehicles		33		33

		16,676			17,680
Less: accumulated depreciation		(8,115	)		(8,329	)
	$	8,561		$	9,351

F-10

 

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

For the years ended December 31, 2006, 2005 and 2004, depreciation expense was $796, $786 and $804, respectively, which is included in cost of revenues.

5.         INTANGIBLE ASSETS

Ridgewood Providence is committed to sell all of the electricity it produces to New England Power (“NEP”) for prices as specified in the power purchase agreement. The agreement with NEP expires in the year 2020 and can be terminated by NEP under certain conditions in 2010. As defined, the prices are adjusted annually for changes in the consumer price index through 2010, and become market prices thereafter.

A portion of the purchase price of Ridgewood Providence was assigned to the electricity sales contracts and is being amortized through its early termination date of 2010 (a period of approximately 14 years) on a straight-line basis. At December 31, 2006 and 2005, the gross and net carrying amounts of the electric sales contracts were:

	2006			2005
Electricity sales contracts - gross	$	8,338		$	8,338
Less: accumulated amortization		(6,481	)		(5,878	)
Intangibles, net	$	1,857		$	2,460

For each of the years ended December 31, 2006, 2005 and 2004, amortization expense was $603, which is included in cost of revenues. The Trust expects to record amortization expense during the next four years as follows:

Year ended December 31,
2007	$	603
2008		603
2009		603
2010		48
Total	$	1,857

6.         INVESTMENTS

The Trust’s investments include a 50% interest in Maine Hydro and a 25% interest in Indeck Maine.

Maine Hydro

On August 15, 1996, Maine Hydro was formed as a Delaware limited partnership. Ridgewood Maine Hydro Corporation, a Delaware corporation (“RMHCorp”), is the sole general partner of Maine Hydro and is owned equally by the Trust and Trust V, both Delaware trusts (collectively, the “Trusts”). The Trusts are equal limited partners in Maine Hydro and have RRP as a common Managing Shareholder. Maine Hydro operations shall continue to exist until December 31, 2046 unless terminated sooner by certain provisions of the partnership agreement.

On December 23, 1996, in a merger transaction, Maine Hydro acquired 14 hydroelectric projects located in Maine from CHI Energy, Inc. Maine Hydro has electrical generating capacity of 11.3 megawatts (“MW”) and its projects are operated under contract by Ridgewood Power Management LLC (“RPM”), an affiliate of the Managing Shareholder. The electricity generated is sold under long-term electricity sales agreements.

F-11

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

Summarized balance sheet data for Maine Hydro at December 31, 2006 and 2005 is as follows:

	2006		2005
Current assets	$	1,448	$	1,764
Non-current assets		4,739		4,182
Total assets	$	6,187	$	5,946
Current liabilities	$	900	$	606
Non-current liabilities		5		12
Partners’ equity		5,282		5,328
Total liabilities and partners' equity	$	6,187	$	5,946
Trust share of Maine Hydro equity	$	2,641	$	2,664

Summarized statements of operations data for Maine Hydro for the years ended December 31, 2006, 2005 and 2004 is as follows:

	2006		2005		2004
Revenues	$	5,221	$	4,806	$	3,429
Cost of revenues		2,991		3,060		2,813
Other expenses (income), net		176		514		(443	)
Total expenses		3,167		3,574		2,370
Net income	$	2,054	$	1,232	$	1,059
Trust share of income in Maine Hydro	$	1,027	$	616	$	529

Indeck Maine

On June 11, 1997, Ridgewood Indeck Investors equally purchased 50% of the membership interest in Indeck Maine, an Illinois limited liability company, which owns two electric power generating stations fueled by clean wood biomass at West Enfield, Maine and Jonesboro, Maine. Indeck Energy Services, Inc. ("Indeck"), an entity unaffiliated with the Trust, owns the remaining 50% membership interest in Indeck Maine and was the seller in the June, 1997 transaction. Ridgewood Indeck investors have a preferred membership interest entitling them to receive all net cash flow from operations each year until they receive an 18% annual cumulative return on their capital contributions to Indeck Maine.

From January 1998 through June 2005, the Ridgewood Indeck Investors loaned approximately $8.2 million in total to Indeck Maine, in proportion to their ownership interests.

Each of the Indeck Maine projects has a capacity of 24.5MW and each uses a steam turbine to generate electricity. Indeck Maine and several of its affiliates have an agreement with a power marketer for which they are committed to sell renewable portfolio standard attributes (“RPS Attributes”) derived from their electric generation. The agreement provides such power marketer with six separate annual options to purchase such attributes from 2004 through 2009 at fixed prices, as defined. If Indeck Maine and its affiliates fail to supply the required number of attributes, penalties may be imposed. In accordance with the terms of the agreement, if the power marketer elects to exercise an annual option and Indeck Maine and its affiliates produce no attributes for such option year, Indeck Maine and its affiliates face a maximum penalty, which is adjusted annually for the change in the consumer price index, among other things, of approximately $3,300, measured using current factors, for that option year and any other year in which an option has been exercised and no attributes have been produced. Pursuant to the agreement, Indeck Maine is liable for 70% of the total penalty, but may be liable up to 100% in the event of a default of its affiliates.

F-12

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

Summarized balance sheet data for Indeck Maine at December 31, 2006 and 2005 is as follows:

	2006			2005
Current assets	$	8,817		$	10,983
Non-current assets		11,468			9,329
Total assets	$	20,285		$	20,312
Current liabilities	$	3,715		$	4,053
Notes payable to members		16,301			16,301
Loan payable – long-term portion		788			2,036
Interest payable to members		3,135			3,403
Members’ deficit		(3,654	)		(5,481	)
Total liabilities and members' deficit	$	20,285		$	20,312
Trust share of Indeck Maine equity	$	2,134		$	1,510

Summarized statements of operations data for Indeck Maine for the years ended December 31, 2006, 2005 and 2004 is as follows:

	2006		2005		2004
Revenues	$	33,539	$	33,819	$	14,784
Cost of revenues		29,921		26,870		16,542
Other expenses		1,791		2,007		1,196
Total expenses		31,712		28,877		17,738
Net income (loss)	$	1,827	$	4,942	$	(2,954	)
Trust share of income (loss) in Indeck Maine	$	624	$	2,215	$	(1,630	)

7.         LANDFILL LEASE AND SUBLEASE

Ridgewood Providence leases its site on the Central Landfill, located in Johnston, Rhode Island from Rhode Island Resource Recovery Corporation (“RIRRC”) under a lease which expires in 2020 and can be extended for an additional 10 years by mutual agreement of the parties under certain conditions. The lease requires Ridgewood Providence to pay a contingent rent in the form of a royalty equal to 15% of net revenue, as defined, until 2006. For subsequent years, the royalty is 15% of net revenues for each month in which the average daily kilowatt hour production is less than 180,000, and 18% of net revenues for each month in which the average daily kilowatt hour production exceeds 180,000. For the years ended December 31, 2006, 2005 and 2004, royalty expense relating to the RIRRC lease amounted to $1,320, $1,090 and $1,102, respectively. The royalty expense has been included in the cost of revenues in the statements of operations.

Ridgewood Providence subleases a portion of the Central Landfill to the Central Gas Limited Partnership (“Gasco”), an unaffiliated entity. Gasco operates and maintains a portion of the landfill gas collection system and supplies landfill gas to Ridgewood Providence. The sublease agreement is effective through December 31, 2010 and provides for the following:

F-13

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

a) Sublease Revenue - Effective January 1, 2001, Gasco is to pay Ridgewood Providence an annual amount equal to the product of $45 (adjusted annually for inflation from January 1, 2001) times the assumed output capacity of each original engine generator set in megawatts installed and operated by the joint venture. The Trust recognized sublease revenue of $577, $571 and $571 for the years ended December 31, 2006, 2005 and 2004 respectively.

b) Fuel Expense - Ridgewood Providence is to purchase all the landfill gas produced by Gasco and pay Gasco on a monthly basis approximately $.05 to $.005 per kilowatt hour based on the kilowatt hours generated. The price is adjusted annually for changes in the Consumer Price Index, as defined. Purchases from Gasco for the years ended December 31, 2006, 2005 and 2004 amounted to $1,031, $1,008 and $1,020, respectively. Fuel expenses have been included in the cost of revenues in the statements of operations.

8.         RENEWABLE ATTRIBUTE REVENUE

In 1997, Massachusetts enacted the Electric Restructuring Act of 1997 (the “Restructuring Act”). Among other things, the Restructuring Act requires that all retail electricity suppliers in Massachusetts (i.e., those entities supplying electric energy to retail end-use customers in Massachusetts) purchase a minimum percentage of their electricity supplies from qualified new renewable generation units powered by one of several renewable fuels, such as solar, biomass or landfill gas. Beginning in 2003, each such retail supplier must obtain at least one (1%) percent of its supply from qualified new renewable generation units. Each year thereafter, the requirement increases one-half of one percentage point until 2009, when the requirement equals four (4%) percent of each retail supplier’s sales in that year. Subsequent to 2009, the increase in the percentage requirement will be determined and set by the Massachusetts Division of Energy Resources (“DOER”).

On January 17, 2003, Ridgewood Providence received a “Statement of Qualification” from the DOER pursuant to the renewable portfolio standards (“RPS”) adopted by Massachusetts. Since Ridgewood Providence has now become qualified, it is able to sell to retail electric suppliers the RPS Attributes associated with its electrical energy. Retail electric suppliers need to purchase RPS Attributes associated with renewable energy and not necessarily the energy itself. Thus, electrical energy and RPS Attributes are separable products and need not be sold or purchased as a bundled product. Retail electric suppliers in Massachusetts will then use the purchase of such RPS Attributes to demonstrate compliance with the Restructuring Act and RPS regulations.

During 2004, Ridgewood Providence became qualified to sell RPS Attributes in Connecticut under a similar RPS program, except that the Connecticut program does not have a “vintage” prohibition, which in Massachusetts disqualifies the amount of a facility’s generation measured by its average output during the period 1995 through 1997. Thus, Ridgewood Providence can sell the 86,000 megawatt hours (“MWhs”) that are ineligible under Massachusetts standards into the Connecticut market. During 2006, 2005 and 2004, Ridgewood Providence sold its “vintage” RPS Attributes pursuant to agreements with various power marketers.

Similar agreements have committed Ridgewood Providence to sell its 2007 “vintage” RPS Attributes to such designated parties at certain fixed quantities and prices. Pursuant to the terms of the agreement, Ridgewood Providence is only required to deliver the specified RPS Attributes it generates and is not obligated to produce, nor is it subject to penalty if it is unable to produce, contracted quantities.

9.         ROYALTY EXPENSE

On August 1, 2003, Ridgewood Providence entered into an Environmental Attribute Agreement with RIRRC and Ridgewood Gas Services, LLC (“RGS”), an affiliate of Ridgewood Providence that provides management services to RIRRC. Pursuant to the terms of the agreement, Ridgewood Providence is required to pay 15% net revenue royalty to both RIRRC and RGS from revenues derived from the sale of RPS Attributes which are the only direct costs of the renewable attribute revenue. The term of the agreement coincides with the Central Landfill lease agreement, which expires in 2020 and provides for an extension of an additional ten years. During the years ended December 31, 2006, 2005 and 2004, the Trust recognized royalty expense of $1,187, $1,181 and $1,245, respectively, related to this agreement which is included in cost of revenues in the accompanying statements of operations. The royalty expenses recognized above include 50% of royalty expenses to RGS for each of the years ended December 31, 2006, 2005 and 2004.

F-14

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

10.      COMMITMENTS AND CONTINGENCIES

Ridgewood Providence and several of its affiliates have an agreement with a power marketer for which they are committed to sell a portion of their RPS Attributes derived from their electric generation. The agreement provides such power marketer with six separate annual options to purchase such RPS Attributes from 2004 through 2009 at fixed prices, as defined. If Ridgewood Providence and its affiliates fail to supply the required number of RPS Attributes, penalties may be imposed. In accordance with the terms of the agreement, if the power marketer elects to exercise an annual option and Ridgewood Providence and its affiliates produce no renewable attributes for such option year, Ridgewood Providence and its affiliates face a maximum penalty, which is adjusted annually for the change in the consumer price index, among other things, of approximately $3,300, measured using current factors, for that option year and any other year in which an option has been exercised and no renewable attributes have been produced. Pursuant to the agreement, Ridgewood Providence and Indeck Maine are liable for 8% and 70% of the total penalty, respectively, but may be liable up to 100% in the event of the default of its affiliates. In the fourth quarters of 2007 and 2006, the power marketer notified Ridgewood Providence and its affiliates that it has elected to purchase the output for 2008 and 2007, respectively, as specified in the agreement. In 2004, Ridgewood Providence incurred a penalty of approximately $4 for the shortfall in production of RPS Attributes. In 2006 and 2005, Ridgewood Providence satisfied and delivered RPS Attributes as prescribed in the agreements and therefore no penalties were incurred.

As part of the RPS Attribute agreements, Ridgewood Providence has assigned and pledged its receivables derived from a portion of its renewable attribute revenue to the power marketer as well as deposited $300 with the power marketer during 2004. In addition to the current security deposit, Ridgewood Providence deposited an additional $105 with the power marketer in 2005. The affiliates of Ridgewood Providence that are parties to the agreement have also deposited amounts with the power marketer in proportion to their obligations under the agreement.

On August 16, 2006, the Managing Shareholder of the Trust and affiliates of the Trust, filed lawsuits against the former independent registered public accounting firm for the Trust, Perelson Weiner, LLP (“Perelson Weiner”), in New Jersey Superior Court. The suits alleged professional malpractice and breach of contract in connection with audit and accounting services performed by Perelson Weiner. On October 26, 2006, Perelson Weiner filed a counterclaim against the Trust, and its affiliates alleging breach of contract due to unpaid invoices. Discovery is ongoing and no trial date has been set. The costs and expenses of the litigation are being paid for by the Managing Shareholder and affiliated management companies and not the underlying investment funds, including the Trust.

The Trust is subject to legal proceedings involving ordinary and routine claims related to its business. The ultimate legal and financial liability with respect to such matters cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements. Estimates for losses from litigation are disclosed if considered reasonably possible and accrued if considered probable after consultation with outside counsel. If estimates of potential losses increase or the related facts and circumstances change in the future, the Trust may be required to record additional litigation expense.

11.       TRANSACTIONS WITH MANAGING SHAREHOLDER AND AFFILIATES

The Trust operates pursuant to the terms of a management agreement (“Management Agreement”). Under the terms of the Management Agreement, the Managing Shareholder provides certain management, administrative and advisory services, and office space to the Trust. In return, the Trust is obligated to pay the Managing Shareholder an annual management fee equal to 3% of the Trusts’ prior year net asset value which equals $535, $447 and $476 for the years ended December 31, 2006, 2005 and 2004, respectively, as compensation for such services. The management fee is to be paid in monthly installments and, to the extent that the Trust does not pay the management fee on a timely basis, the Trust accrues interest at an annual rate of 10% on the unpaid balance.

For the years ended December 31, 2006, 2005 and 2004, the Trust accrued interest expense of $62, $55 and $52, respectively, on accrued but unpaid management fees. The interest accrued has been waived by the Managing Shareholder and recorded as capital contribution in the period waived.

The shareholders of the Trust other than the Managing Shareholder were allocated 99% of each contribution and the Managing Shareholder was allocated 1% so that the amount of the contribution allocated offset the amount of the expense initially accrued. For the years ended December 31, 2006 2005 and 2004, the Trust made management fee payments to the Managing Shareholder of $257, $481 and $429, respectively.  In the fourth quarter of 2006, the Managing Shareholder forgave $278 of 2006 unpaid accrued management fees and $381 of prior years unpaid accrued management fees which were recorded as deemed capital contributions.

F-15

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

Under the Management Agreement with the Managing Shareholder, RPM, an entity related to the Managing Shareholder through common ownership, provides management, purchasing, engineering, planning and administrative services to the projects operated by the Trust. RPM charges the projects at its cost for these services and for the allocable amount of certain overhead items. Allocations of costs are on the basis of identifiable direct costs or in proportion to amounts invested in projects managed by RPM. During the years ended December 31, 2006, 2005 and 2004, RPM charged the projects approximately $1,533, $1,358 and $1,169, respectively, for overhead items allocated in proportion to the amount invested in projects managed. In addition, for the years ended December 31, 2006, 2005, and 2004 RPM charged the projects approximately $6,447, $6,970 and $7,097, respectively, for all of the direct operating and non-operating expenses incurred. These charges may not be indicative of costs incurred if the Trust were not operated by RPM.

Under the Declaration of Trust, the Managing Shareholder is entitled to receive, concurrently with the shareholders of the Trust other than the Managing Shareholder, 1% of all distributions from operations made by the Trust in a year until the shareholders have received distributions in that year equal to 14% of their equity contribution. Thereafter, the Managing Shareholder is entitled to receive 20% of the distributions for the remainder of the year. The Managing Shareholder is entitled to receive 1% of the proceeds from dispositions of Trust property until the shareholders other than the Managing Shareholder, have received cumulative distributions equal to their original investment (“Payout”). After Payout, the Managing Shareholder is entitled to receive 20% of all remaining distributions of the Trust. Distributions to the Managing Shareholder were $38, $13 and $14 for each of the three years ended December 31, 2006, 2005 and 2004, respectively. The Trust has not yet reached Payout.

Income is allocated to the Managing Shareholder until the profits so allocated equal distributions to the Managing Shareholder. Thereafter, income is allocated among the shareholders other than the Managing Shareholder in proportion to their ownership of Investor Shares. If the Trust has net losses for a fiscal period, the losses are allocated 99% to the shareholders other than the Managing Shareholder and 1% to the Managing Shareholder, subject to certain limitations as set forth in the Declaration of Trust. Amounts allocated to shareholders other than the Managing Shareholder are apportioned among them in proportion to their capital contributions.

Under the terms of the Declaration of Trust, if the Adjusted Capital Account (as defined in the Declaration of Trust) of a shareholder other than the Managing Shareholder would become negative using General Allocations (as defined in the Declaration of Trust), losses and expenses will be allocated to the Managing Shareholder. Should the Managing Shareholder’s Adjusted Capital Account become negative and items of income or gain occur, then such items of income or gain will be allocated entirely to the Managing Shareholder until such time as the Managing Shareholder’s Adjusted Capital Account becomes positive. This mechanism does not change the allocation of cash, as discussed above.

RRP owns 2.0331 Investor Shares of the Trust. The Trust granted the Managing Shareholder a single Management Share representing the Managing Shareholder’s management rights and rights to distributions of cash flow.

On June 26, 2003, the Managing Shareholder, entered into a Revolving Credit and Security Agreement with Wachovia Bank, National Association. The agreement, as amended, allows the Managing Shareholder to obtain loans and letters of credit of up to $6,000 for the benefit of the Trusts and Funds that it manages. As part of the agreement, the Trust agreed to limitations on its ability to incur indebtedness and liens, and to provide guarantees. The Managing Shareholder and Wachovia Bank agreed to extend the Managing Shareholder’s line of credit through May 31, 2008.

The Trust records short-term payables to and receivables from other affiliates in the ordinary course of business. The amounts payable to and receivable from the other affiliates do not bear interest. At December 31, 2006 and 2005, the Trust had outstanding payables and receivables as follows:

	December 31,				December 31,
	2006		2005		2006		2005
	Due from				Due to
RPM	$	-	$	-	$	211	$	204
RRP		-		-		-		384
Trust III		19		-		-		355
Maine Hydro		21		60		-		-
Indeck Maine		-		20		74		-
Other affiliates		19		15		-		-
Total	$	59	$	95	$	285	$	943

F-16

Ridgewood Electric Power Trust IV

Notes to Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

12.         SELECTED UNAUDITED QUARTERLY FINANCIAL DATA

	2006 Quarters
	1st		2nd		3rd		4th
Revenues	$	3,012	$	2,986	$	2,923	$	3,116
Gross profit		848		649		768		573
Income from operations		647		470		605		418
Net income		948		393		891		915
Net income per Investor Share		1,968		816		1,850		1,899
	2005 Quarters
	1st		2nd		3rd		4th
Revenues	$	3,117	$	2,960	$	2,996	$	3,188
Gross profit		915		620		834		513
Income from operations		736		415		654		314
Net income		103		857		1,715		1,541
Net income per Investor Share		214		1,779		3,560		3,199

F-17