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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2001

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: 000-33069

COMMONWEALTH ENERGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CALIFORNIA 33-0769555
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

15901 RED HILL AVENUE, SUITE 100, TUSTIN, CALIFORNIA 92780
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (714) 258-0470

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 ( ) NO ( X )

AS OF OCTOBER 31, 2001, 27,311,703 SHARES OF THE REGISTRANT'S COMMON STOCK
WERE OUTSTANDING. THERE WAS NO MARKET FOR THE REGISTRANTS SHARES AT SUCH DATE.

COMMON STOCK
(TITLE OF CLASS)

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION PAGE
----

Item 1. Financial Statements:
Condensed consolidated balance sheets--October 31, 2001 (unaudited) and July 31, 2001..... 3
Condensed consolidated statements of operations--Three months ended October 31, 2000 and
2001 (unaudited)......................................................................... 4
Condensed consolidated statements of cash flows--Three months ended October 31, 2000 and
2001 (unaudited)......................................................................... 5
Notes to condensed consolidated financial statements--October 31, 2001 (unaudited)......... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...... 14
Item 3. Quantitative and Qualitative Disclosure about Market Risk.................................... 16

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.......................................................................... 17
Item 2. Changes In Securities and Use of Proceeds.................................................. 18
Item 3. Defaults upon Senior Securities............................................................ 18
Item 4. Submission of Matters to a Vote of Security Holders........................................ 18
Item 5. Other Information.......................................................................... 18
Item 6. Exhibits and Reports on Form 8-K........................................................... 19

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

COMMONWEALTH ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

-----------------------------------
JULY 31, 2001 OCTOBER 31, 2001
------------- ----------------
(Unaudited)

Current assets:
Cash and cash equivalents ................................................. $ 41,114,046 $ 34,385,629
Accounts receivable:
Billed ................................................................. 16,818,659 16,129,080
Unbilled ............................................................... 3,338,172 3,035,103
Green power credits .................................................... 1,176,611 1,078,360
------------- -------------
21,333,442 20,242,543
Less allowance for doubtful accounts ................................... (3,946,388) (4,178,680)
------------- -------------
Net accounts receivable ................................................... 17,387,054 16,063,863
Prepaid income taxes ...................................................... 2,109,997 2,138,428
Deferred tax asset ........................................................ 6,607,711 2,800,443
Prepaid expenses and other assets ......................................... 3,943,625 2,271,340
------------- -------------
Total current assets .............................................. 71,162,433 57,659,703
Property and equipment, net ................................................. 3,606,078 3,693,554
Restricted cash ............................................................. 28,242,911 26,294,575
Other assets:
Intangible assets ......................................................... 945,000 931,875
Investment in Envenergy, Inc., at cost .................................... -- 2,000,000
Deposits and notes receivable ............................................. 388,466 483,465
Deferred tax asset ........................................................ 2,671,058 7,005,316
------------- -------------
Total other assets ................................................ 4,004,524 10,420,656
------------- -------------
Total assets ...................................................... $ 107,015,946 $ 98,068,488
============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable .......................................................... $ 9,404,851 $ 9,116,188
Notes payable under line of credit ........................................ 3,888,072 3,602,171
Other current liabilities ................................................. 7,685,954 2,413,983
------------- -------------
Total current liabilities ......................................... 20,978,877 15,132,342
Commitments and contingencies
Shareholders' equity:
Convertible preferred stock -- 10,000,000 shares
authorized with no par value; 862,500 and 812,500 shares issued and
outstanding at July 31, 2001 and October 31, 2001, respectively ........ 842,112 826,392
Common stock -- 50,000,000 shares authorized with no par
value; 29,360,363 and 27,311,703 shares issued and
outstanding at July 31, 2001 and October 31, 2001, respectively ........ 60,304,847 57,904,896
Retained earnings ......................................................... 24,890,110 24,204,858
------------- -------------
Total shareholders' equity ........................................ 86,037,069 82,936,146
------------- -------------
Total liabilities and shareholders' equity ........................ $ 107,015,946 $ 98,068,488
============= =============

See accompanying notes.

COMMONWEALTH ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

THREE MONTHS ENDED OCTOBER 31,
-------------------------------
2000 2001
------------ ------------

Net energy sales ................................... $ 41,500,844 $ 26,946,459
Green power credits ................................ 1,605,183 1,214,336
------------ ------------
Net revenue ........................................ 43,106,027 28,160,795
Direct energy costs ................................ 24,273,025 24,802,027
------------ ------------
Gross margin ....................................... 18,833,002 3,358,768
Selling and marketing expenses ..................... 965,085 875,068
General and administrative expenses ................ 3,190,498 4,079,825
------------ ------------
Income (loss) from operations ...................... 14,677,419 (1,596,125)
Interest income .................................... 236,400 477,675
Interest expense ................................... (217,376) (103,569)
------------ ------------
Income (loss) before provision for income taxes .... 14,696,443 (1,222,019)
Provision (benefit) for income taxes ............... 2,937,289 (555,421)
------------ ------------
Net income (loss) .................................. $ 11,759,154 $ (666,598)
============ ============

Net income (loss) per common share:
Basic ........................................... $ 0.40 $ (.02)
============ ============
Diluted ......................................... $ 0.34 $ (.02)
============ ============

See accompanying notes.

COMMONWEALTH ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

THREE MONTHS ENDED OCTOBER 31,
-------------------------------
2000 2001
------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) .................................................... $ 11,759,154 (666,598)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Depreciation ....................................................... 252,400 283,890
Amortization ....................................................... 13,125 13,125
Provision for doubtful accounts .................................... 322,663 232,292
Tax benefit arising from exercise of stock options ................. (271,633) --
Deferred income taxes .............................................. -- (526,990)
Changes in operating assets and liabilities:
Billed accounts receivable ...................................... 7,039,276 689,580
Unbilled accounts receivable .................................... 2,040,301 303,069
Green power credits receivable .................................. 1,131,063 98,251
Inventory, prepaid expenses and other assets .................... 145,508 1,548,854
Accounts payable ................................................ (6,643,085) (288,662)
Income taxes payable ............................................ 2,937,290 --
Accrued expenses ................................................ (48,800) (5,271,973)
------------ ------------
Net cash provided by (used in) operating activities .................. 18,677,262 (3,585,162)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment .................................. (304,452) (371,366)
------------ ------------
Net cash used in investing activities ................................ (304,452) (371,366)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under (repayments of) line of credit ...................... 32,863 (285,901)
Increase in restricted cash .......................................... (152,294) (51,664)
Cumulative preferred dividends ....................................... -- (9,375)
Repurchase of preferred stock ........................................ -- (25,000)
Repurchase of common stock ........................................... -- (2,400,000)
Proceeds from exercise of stock options .............................. -- 50
------------ ------------
Net cash used in financing activities ................................ (119,431) (2,771,890)
------------ ------------
Increase (decrease) in cash and cash equivalents ..................... 18,253,379 (6,728,418)
Cash and cash equivalents at beginning of period ..................... 4,213,168 41,114,046
------------ ------------
Cash and cash equivalents at end of period ........................... $ 22,466,547 $ 34,385,628
============ ============

Supplemental disclosure of cash flow information:
CASH PAID FOR:
Interest expense ..................................................... $ 217,376 $ 103,569
============ ============
Income taxes ......................................................... $ 2,937,289 $ --
============ ============

See accompanying notes.

COMMONWEALTH ENERGY CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Commonwealth Energy Corporation (the "Company") was incorporated on August
15, 1997. The Company's primary business has been the sale of electric power to
retail customers in California and, beginning January 2000, in Pennsylvania and
beginning in August 2000, the sale of electric power to wholesale customers in
California and Pennsylvania. The Company is licensed by the Federal Energy
Regulatory Commission (FERC) as a power marketer, by California as an Electric
Service Provider and by Pennsylvania as an Electric Generation Supplier. The
Company plans to enter new deregulated electric power markets in the future.

The electric power sold by the Company to its retail customers is delivered
to the Company's customers by Utility Distribution Companies (UDCs) in
California and an Electric Distribution Company (EDC) in Pennsylvania, which
measure electric power usage by the Company's customers and bill the customers
on behalf of the Company. There are three UDCs in California and one EDC in
Pennsylvania which conduct these activities on behalf of the Company.

The Company's operations have been in one reportable segment, the domestic
electricity distribution industry.

Basis of Presentation

The condensed consolidated interim financial statements of the Company
include the accounts of the Company's wholly-owned subsidiaries and Summit
Energy Ventures, LLC (Summit). All intercompany transactions have been
eliminated in consolidation.

The condensed consolidated interim financial statements as of October 31,
2001 and for the three month period ended October 31, 2000 and 2001 are
unaudited but, in the opinion of management, have been prepared on the same
basis as the audited financial statements and reflect all adjustments,
consisting of normal recurring accruals necessary for a fair presentation of the
information set forth therein. The results of operations for the three month
period ended October 31, 2001 are not necessarily indicative of the operating
results to be expected for the full year or any other period. These financial
statements and notes should be read in conjunction with the financial statements
and notes included in the audited consolidated financial statements of the
Company for the year ended July 31, 2001.

Adjustment of Number of Outstanding Common Shares and Restatement of Per Share
Information

The Company disputed whether certain shares of its common stock issued to its
founder were validly issued. Litigation ensued between the Company its founder
regarding this and other matters. A settlement of this litigation was approved
by the court having jurisdiction over the case on August 15, 2001 and stipulated
that 4,720,000 of the founder's disputed common shares were void. The Company's
legal counsel has advised that such shares should be considered void ab initio,
or having never been issued. Accordingly. the Company has restated its prior
years' financial statements to reflect the terms of this settlement. The only
change to the Company's results of operations is in certain previously reported
net income per share information, including the results for the three months
ended October 31, 2000 which have been restated as follows:

Basic Diluted
----- -------

As restated $0.40 $0.34
As originally reported $0.35 $0.30

Estimates and Assumptions

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. The
most significant estimates in the Company's consolidated financial statements
relate to the allowance for doubtful accounts, unbilled receivables, legal
claims and the useful lives of equipment. Actual results could differ from those
estimates.

Revenue and Cost Recognition

Net revenue from sales of electric power is recognized as the power is
delivered to the Company's customers. Net revenue represents proceeds from
energy sales. Direct energy costs include electric power purchased, independent
system operator fees and scheduling coordination fees. Selling and marketing
expenses include salaries of sales and marketing personnel and promotional and
advertising costs. General and administrative expenses include salaries for
corporate support personnel, rent expenses, insurance expenses, bad debt
expenses, depreciation expenses and other costs of the corporate office.

The Company's net revenue is derived from sales to the following class of
customers:

THREE MONTHS ENDED OCTOBER 31,
------------------------------
2000 2001
----------- -----------

Retail and commercial end users ..... $31,416,756 $19,864,740
Wholesale ........................... 11,689,271 8,296,055
----------- -----------
$43,106,027 $28,160,795
=========== ===========

Unbilled Receivables

The Company's customers are billed monthly at various dates throughout the
month. Unbilled receivables represent the amount of electric power delivered to
customers at the end of a period, but not yet billed. Unbilled receivables from
sales in California through January 19, 2001 were estimated by the Company as
the number of kilowatt hours delivered times 95% of the California Power
Exchange ("PX") cost as published by Southern California Edison for residential
customers. On January 20, 2001, the PX ceased operations and the Company
replaced the PX cost amount with the individual Utility Purchased Energy cost as
published by each individual utility.

Stock-Based Compensation

As permitted by Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation (SFAS No. 123) and FASB Interpretation
No. 44, Accounting for Certain Transactions involving Stock Compensation, the
Company accounts for stock options granted to its employees and outside
directors using the intrinsic value method. Most of the Company's stock option
grants were granted with exercise prices below the fair value of the Company's
common stock as estimated by the Company's management for financial reporting
purposes. In addition, since most stock option grants were vested at their dates
of grant, the difference between the exercise prices and such estimated fair
values was expensed as stock-based compensation charges as of the date of grant.

Concentration of Credit Risk

The Company's concentration of credit risk with respect to accounts
receivable is limited due to the large number of customers who are spread
primarily throughout California. In addition, the Company maintains allowances
for potential credit losses.

As of October 31, 2001, 53.5% of the Company's billed and unbilled
receivables are due from a large number of retail and commercial end users in
California and Pennsylvania who are billed by an make remittances to the UDC's
or the EDC that deliver their electricity which, in turn, forward such
remittances to the Company. One of the UDC's, Pacific Gas and Electric (PG&E),
filed for bankruptcy in April 2001 and has withheld from payment to the Company
a portion of the remittances due to the Company. The Company has filed a Proof
of Claim in PG&E's bankruptcy proceedings to recover these amounts which
approximated $1,100,000 at October 31, 2001. The Company has provided fully for
these disputed amounts in its allowance for doubtful accounts. The Company does
not have any similar disputes with its other UDC's.

The remainder of the Company's billed and unbilled accounts receivable are
due primarily from wholesale customers including $4,310,630 due form Automated
Power Exchange (APX). This amount includes $2,226,630 in ISO credit holdbacks
relating to November 2000 and January 2001 activity. APX has informed the
Company that the holdbacks were made, in part, because certain organizations,
including PG&E and PX, which have declared bankruptcy, did not make their
scheduled payments to APX. The Company has provided an allowance of $1,471,142
for doubtful accounts related to the APX holdbacks.

During the three months ended October 31, 2001, sales to PJM Interconnection
in Pennsylvania represented approximately 19% of the Company's total net
revenue. Payment terms of these energy sales are net 15 days of the invoice
date. During the three months ended October 31, 2001, no other customer
represented over 10% of the Company's net revenue. During the three months ended
October 31, 2000, no customer accounted for more than 10% of the Company's net
revenue.

2. MARKET AND REGULATORY RISKS

California Deregulated Electric Power Markets

California has been experiencing extreme fluctuations in the cost of
wholesale energy since May 2000. During the summer of 2000 and winter of 2001,
the price of electricity in wholesale markets reached unprecedented highs. Since
the winter of 2001, the price of electricity has returned to near historical
levels. In reaction to this crisis, FERC, the California Public Utilities
Commission ("CPUC"), the State Legislature and the Governor have proposed a
varying number of methods to help restore price stability to the California
electricity marketplace. On September 20, 2001, the CPUC issued a ruling
suspending "direct access" pursuant to legislation by the California state
legislature requiring the CPUC to suspend "direct access" in California. The
suspension of "direct access" means that retail electricity suppliers, such as
the Company, will not be allowed to actively seek customers. This ruling permits
the Company to keep its current customer base, but prohibits the Company from
signing up new customers for an undetermined period of time. The Company is
actively seeking relief from this ruling.

In addition to regulatory and legislative risks, one of the UDC's in
California, PG&E, with which the Company interacts to conduct its business has
filed for bankruptcy protection. Other utilities in California also could seek
protection of bankruptcy in the future.

Commitments to Purchase Electric Power

For the California market, the Company has entered into a contract, which
expires on June 30, 2002, to acquire 2,400 MWH of electric power per day through
December 31, 2000 and 3,000 MWH per day for the remainder of the contract. The
Company is obligated to minimum electric purchases of $32.3 million during the
year ending July 31, 2002, under this commitment. The electric power acquired
under this contract qualifies for the California "Green Power Credit" upon its
resale to certain classes of customers.

For the Pennsylvania market, the Company has entered into various contractual
arrangements for the purchase of electric power through May 2004. The Company is
obligated to minimum electric power purchases of $37.9 million during the year
ending July 31, 2002 and $51.9 million thereafter under these contracts.

Since the price at which the Company can purchase this electric power is
fixed during the terms of the contracts, if the price at which the Company can
resell this electric power falls below the contract purchase price plus
distribution and scheduling costs, the Company would incur operating losses
during such periods.

Pennsylvania Operations

In accordance with its standard customer contract in Pennsylvania, the
Company may only charge certain maximum rates for its sales of electric power
which, at times, could be less than the Company's costs of acquiring,
distributing and scheduling such electric power. Energy capacity charges for
servicing electric power in Pennsylvania market varies significantly form month
to month and can effect gross profit margins.

California Green Power Credits

The state of California enacted the Public Purpose Program which established
a $540 million fund to provide overall incentives to suppliers of "green" power
to initially reduce, among other things, the net costs of such power to certain
consumers by 1.5 cents per KWH which effective July 31, 2000, has been at a rate
1.0 cent per KWH. The Company received Green Power Credits of

$1,605,184 for the three months ended October 31, 2000 and $1,214,336 for the
three months ended October 31, 2001, which are included in the Company's net
revenue. The benefit of these credits has been passed through to the Company's
customers. The Public Purpose Program provides that this subsidy is available to
suppliers of "green power" through March 31, 2002 and the Company does not know
if the subsidy will be continued thereafter.

3. PER SHARE INFORMATION

The amount of net income (loss) used in the calculations of basic and diluted
net income (loss) per common share includes cumulative preferred dividend
requirements of $21,237 and $18,654 for the three months ended October 31, 2000
and 2001, respectively.

Basic and diluted net income (loss) per common share is computed as follows:

THREE MONTHS ENDED OCTOBER 31,
-------------------------------
2000 2001
------------ ------------

NUMERATOR:
Net income (loss) ..................................... $ 11,759,154 $ (666,598)
Preferred stock dividend .............................. (21,237) (18,654)
------------ ------------
Income (loss) applicable to common stock -- Basic ..... 11,737,917 (685,252)
Assumed conversion of preferred stock ................. 21,237 --
------------ ------------
Net income (loss) -- Dilutive ......................... $ 11,759,154 $ (685,252)
============ ============
DENOMINATOR:
Average outstanding shares -- Basic ................... 29,352,914 27,836,368
Dilutive shares:
Exercise of stock options ........................... 4,364,685 --
Conversion of preferred stock into common stock ..... 939,000 --
------------ ------------
Average outstanding shares -- Dilutive ................ 34,656,599 27,836,368
============ ============

For the three months ended October 31, 2001, the effects of the exercise of
all stock options and warrants and the assumed conversion of preferred stock
into common stock are anti-dilutive and have been excluded from the calculation
of dilutive earnings per share information. For the three months ended October
31, 2000, the effects of stock options with exercise prices in excess of the
estimated fair value of the Company's common stock and of the exercise of
warrants have been excluded from the calculation of diluted earnings per share
because the effect of their inclusion would be anti-dilutive.

4. INVESTMENT IN SUMMIT ENERGY VENTURES, LLC

In July 2001, the Company invested $15,000,000 in Summit and, if Summit
invests 75% of the initial $15,000,000 investment by the Company, is committed
to invest up to an additional $10,000,000 in Summit. Summit was formed in July
2001 for the purpose of investing in energy and energy-related companies. Summit
is to exist through June 29, 2006, which date may be extended for up to two
additional one year periods by mutual agreement of the parties. Summit's
Investment Committee, which is comprised of three members appointed by the
Company's management, must approve of any investments to be made by Summit.
Accordingly, because of this control over Summit's investments, Summit financial
statements are included in the Company's consolidated financial statements.

As of October 31, 2001, the Company's interest in Summit is a 100% preferred
membership interest and, after the Company receives its original capital and a
10% preferred return, profits of Summit are to be allocated 50% to the Company
and 50% to its partner, Northwest Power Management (Northwest); net losses are
allocated per capital contribution. Northwest receives no return until after the
Company receives return of its investment and 10% preferred annual return on its
investment. The Company shall have the option to purchase any of Summit's
investments on such terms and conditions that are established between the
Company and Northwest.

Condensed balance sheet information for Summit at October 31, 2001, which is
included in the Company's consolidated financial statements, is as follows:

Assets:

Cash and cash equivalents ............................................. $ 12,654,970
Prepaid management fees ............................................... 340,582
Investment in Evenergy, Inc., at cost ................................. 2,000,000
------------
$ 14,995,552
============

Members equity ............................................................ $ 14,995,522
============

The effect of Summit's results of operations during the three months ended
October 31, 2001 on the Company's consolidated results of operations was
insignificant.

In October 2001, Summit Energy invested $2,000,000 in Envenergy, Inc.
representing a 9% ownership in the company which will be accounted for as an
available for sale equity investment.

5. OTHER CURRENT LIABILITIES

Other current liabilities is comprised of the following at October 31, 2001:

Payroll and related ....................................................... $ 639,650
Legal accruals ............................................................ 1,188,584
Other ..................................................................... 585,749
------------
$ 2,413,983
============

6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net is comprised of the following at October 31,
2001:

Office furniture and equipment ............................................. $ 1,249,536
Information technology equipment and systems ............................... 4,438,088
Leasehold improvements ..................................................... 125,438
------------
5,813,062
Less accumulated depreciation and amortization ............................. (2,119,508)
------------
$ 3,693,554
============

7. RESTRICTED CASH AND INTANGIBLE ASSETS

Restricted Cash

Restricted cash consists of the following:

Short-term investments pledged as collateral for letters of credit in
connection with agreements for the purchase of electric power .............. $ 13,639,605
Cash and cash equivalents of Summit ........................................ 12,654,970
------------
$ 26,294,575
============

The Company is required to pledge an amount equivalent to 45 days of energy
purchases under the contracts for the purchase of electric power. The funds in
Summit are committed to the purpose of investing in energy and energy related
companies.

Intangible Assets

The Company's intangible assets represent the net unamortized costs of
purchasing, in July 1999, the 1-800-Electric telephone number and the rights to
eight internet domain names. The initial cost of these intangible assets was
$1,050,000. Amortization expense for these intangible assets was $13,125 for the
three months ended October 31, 2000 and 2001.

8. LINE OF CREDIT

On June 29, 2000, the Company entered into a three-year, $15 million line of
credit. Borrowings under the line of credit, which amounted to $3,602,171 at
October 31, 2001, are collateralized by accounts receivable, inventory and other
assets. In connection with obtaining the line of credit, the Company agreed to
pay a closing fee of $300,000, one-half of which was paid at closing and the
remainder to be paid incrementally at each annual renewal date. The Company also
issued the lender a warrant expiring June 29, 2003 to purchase 100,000 shares of
the Company's common stock at a price of $5.50 per share. Interest on borrowings
is based on the lender's prime rate plus 1.75%. At October 31, 2001, the
interest rate on borrowings under the line of credit was 9.0%. The credit line
is subject to certain financial covenants in the event the Company's net worth
falls below $10 million or the Company operates with a negative gross profit.

On August 10, 2001, the Company restructured its line of credit to shorten
the maturity date to June 29, 2002 and to reduce the amount of the line of
credit to $10 million.

9. SHAREHOLDERS' EQUITY

Convertible Preferred Stock

The convertible preferred stock provides cumulative dividends which accrue at
an annual rate of 10% and are payable at the discretion of the Company.
Cumulative unpaid dividends were $96,893 as of October 31, 2001. Each
convertible preferred share is convertible into one share of the Company's
common stock at the shareholder's discretion and has full voting rights. In
addition, preferred shareholders are entitled to preferential liquidation rights
over common stock in the amount of $1.00 per share plus an amount equal to all
declared but unpaid dividends.

Common Stock

At October 31, 2001, the Company has reserved the following shares of its
common stock for issuance upon conversion of the issued and outstanding shares
of convertible preferred stock, exercise of warrants and exercise of outstanding
stock options:

Reserved for conversion of convertible preferred stock ....... 812,500
Reserved for exercise of common stock warrants ............... 100,000
Reserved for exercise of outstanding stock options ........... 10,280,192
----------
11,192,692
==========

Founder's Shares

The Company's corporate records state that the founder's shares of common
stock were issued in exchange for the payment of $140,000 in the form of cash
payments totaling $90,000 and personal property having a value of $50,000;
however, the Company was not able to verify that all of this consideration was
actually paid to the Company. Accordingly, the Company's Board of Directors, on
February 23, 2001, instructed the Company's management to reflect on the
corporate records that only a portion of the shares issued to the founder be
recognized as validly issued.

Subsequent to the actions described above, claims and counterclaims were
filed by the Company and the founder. On August 10, 2001, a settlement was
reached with the founder which was approved by the court having jurisdiction
over the case on August 15, 2001. The material terms of the settlement provided
that the Company pay the founder $4,790,000 in damages and an additional
$2,400,000 to purchase 1,175,160 shares of the Company's common stock claimed to
be held by the founder. The settlement agreement also provided that the
remaining 4,720,000 shares of the Company's common stock claimed be held by the
founder were void. Founder also agreed to release his claims to the shares of
the Company's common stock held in the escrow account pursuant to the
Accommodation Agreement and to the Company's obligation to him under the
severance agreement. The founder also agreed that he would have no future
ownership in the Company. The loss on the settlement of $4,790,000, which is net
of the previously accrued severance payable to the founder of $927,554, was
recorded as of July 31, 2001.

Stock Options

The Company's Board of Directors has approved grants of options to acquire a
total of 12,901,825 shares of the Company's common stock to the Company's
employees, outside directors and service providers. As of October 31, 2001,
10,280,192 of these stock options were outstanding.

Stock option activity for the three months ended October 31, 2001 is set
forth below:

OPTIONS OUTSTANDING
-------------------------------------------------
EXERCISE WEIGHTED-
NUMBER PRICE AVERAGE
OF SHARES PER SHARE EXERCISE PRICE
----------- -------------- --------------

Balance at July 31, 2001 ........ 10,283,192 $ .01 -- $3.75 $ 1.792
Options granted ................. 2,000 $ $3.75 $ 2.725
Options exercised ............... (5,000) $ .01 $ .010
----------- -------------- --------
Balance at October 31, 2001 ..... 10,280,192 $ .01 -- $3.75 $ 1.793
=========== ============== ========

Warrants

As part of the $15 million credit line agreement dated June 29, 2000, the
lender received warrants to purchase 100,000 shares of common stock. The
warrants are exercisable at $5.50 per share and expire upon the maturity of the
loan agreement on June 29, 2003. The fair value of the warrants was nominal at
their date of issuance.

10. INCOME TAXES

For the three months ended October 31, 2001, the Company's provision for
income taxes was comprised of the following:

CURRENT DEFERRED TOTAL
------- --------- ---------

Federal ........................... $ -- $(555,421) $(555,421)
State ............................. -- -- --
------- --------- ---------
Total ............................. $ -- $(555,421) $(555,421)
======= ========= =========

The Company's net deferred tax asset as of October 31, 2001 was $9,691,585
and is net of a valuation allowance of $908,816. During the three months ended
October 31, 2001, the valuation allowance was reduced by $112,181. Deferred
income taxes reflect the net effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.

The Company has available for federal and state income tax purposes a net
operating loss carry forward of approximately $2,300,000, which will begin to
expire in 2018 and 2006, respectively, if not sooner utilized.

The Company has experienced an ownership change under federal and state
income tax law. Accordingly, the amount of the Company's taxable income which
may be offset by losses generated prior to the ownership change is limited.

11. COMMITMENTS AND CONTINGENCIES

Severance Agreement and Litigation with Company's Founder

The Company's founder and former chairman and Chief Executive Officer had an
employment agreement with a subsidiary of the Company. He was asked to resign
and he subsequently resigned from his positions with the subsidiary in
consideration of a severance agreement effective June 1, 2000. Said severance
agreement expressly waives any claims by him for any bonuses otherwise
referenced in his previous five-year employment agreement with the subsidiary of
the Company. The severance agreement also provided for monthly payments to him
for $21,261 through December 31, 2004. The present value of $927,254 of this
obligation to the Company's former chairman and Chief Executive Officer, based
upon a discount rate of 10%, was recorded as of June 1, 2000. In December 2000,
the Company ceased making severance payments under this arrangement pending the
outcome of litigation between the Company and its founder as more fully
described in Note 9.

Litigation

From time to time, the Company is involved in legal proceedings, claims, and
litigation arising in the ordinary course of business. Management does not
believe the outcome of these matters will have a material effect on the
Company's financial condition or its results of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Our primary business to date has been the sale of electric power to retail
customers and commercial end-users in California and, beginning January 2000, in
Pennsylvania and the sale of electric power to wholesale customers in California
and Pennsylvania. We are licensed by the FERC as a power marketer and by the
California, Pennsylvania, New Jersey, Texas and Ohio Public Utilities
Commissions as an electric services or electric generation supplier. We plan to
enter new deregulated electric power markets in the future. We are in the
licensing process in Michigan.

As of October 31, 2001, we delivered electricity to approximately 89,000
customers in California and Pennsylvania. The growth of this business depends
upon the deregulated status of each state, the availability of cost-effective
energy purchases to us and the acquisition of retail or commercial customers by
us.

We do not have our own electricity generation facilities. The power we sell
to our customers is purchased from generators. During fiscal 2000, in both
California and Pennsylvania, we purchased electricity both under long-term
contracts and in the spot market. By the end of fiscal 2001, substantially all
of our electricity was purchased under long-term contracts.

RESULTS OF OPERATIONS

THREE MONTHS ENDED OCTOBER 31, 2001 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
2000

Net revenue

Net revenue decreased by $14.9 million, or 34.6%, from $43.1 million for the
three months ended October 31, 2000 to $28.2 million for the three months ended
October 31, 2001. California electricity sales decreased by $21.9 million offset
by increases in Pennsylvania electricity sales of $7.5 million. The decrease in
green power credit revenue from $1.6 million for the three months ended October
31, 2000 to $1.2 million for the three months ended October 31, 2001 accounts
for the remaining $.4 million decrease in net revenue. Our California wholesale
electricity sales decreased $8.7 million and the remainder of the California
decrease resulted from decreased electricity prices to retail and commercial
end-users. The increase in Pennsylvania sales was attributable to increased
sales prices to retail and commercial end-users and to increased wholesale
electricity sales of $5.3 million. There were no wholesale electricity sales in
Pennsylvania during the three months ended October 31, 2000. The decrease in
green power credit revenue is due to fewer customers being eligible for large
green power credits and more of the remaining eligible customers reaching their
annual limits prior to the three months ended October 31, 2001 compared to the
same period in the prior year. For the three months ended October 31, 2001, we
sold 549,787,215 kwh of electricity at an average price of $.05 per kwh compared
to 345,195,134 kwh sold at an average price of $.12 per kwh during the three
months ended October 31, 2000. At October 31, 2001, we had 89,000 customers
compared to 84,500 customers at October 31, 2000.

Direct energy costs

Direct energy costs increased to $24.8 million for the three months ended
October 31, 2001, an increase of $.5 million, or 2%, from $24.3 million for the
three months ended October 31, 2000. California direct energy costs decreased
from $19.9 million during the three months ended October 31, 2000 to $9.9
million for the three months ended October 31, 2001. Pennsylvania direct energy
costs increased from $4.1 million for the three months ended October 31, 2000 to
$14.8 million during the three months ended October 31, 2001. The decrease in
California direct energy costs was the result of lower energy purchase price and
scheduling costs. Our California average energy purchase price decreased from
$.05 per kwh during the three months ending October 31, 2000 to $.03 per kwh for
the three months ended October 31, 2001. California scheduling costs were
reduced $5.4 million by using one scheduler during the three months ended
October 31, 2001 compared to three schedulers during the three months ended
October 31, 2000. Pennsylvania direct energy costs increased due to purchases of
285,325,000 kwh of electricity during the three months ended October 31, 2001
compared to purchases of 93,434,750 kwh during the three months ended October
31, 2000. Pennsylvania scheduling costs increased $2.6 million as a result of
scheduling more kwh across the grid during the three months ended October 31,
2001 compared to the three months ended October 31, 2000. Direct energy costs,
as a percent of net revenues, increased from 56.3% for the three months ended
October 31, 2000 to 88.1% for the three months ended October 31, 2001. This
increase was the result of decreased sales prices in the California wholesale
market.

Selling and marketing expenses

Selling and marketing expenses decreased $.1 million, or 9.3%, from $1.0
million for the three months ended October 31, 2000 to $.9 million for the three
months ended October 31, 2001. The decrease is primarily a result of a decrease
in call center activities as

the Company reduced its activities for the solicitation of new customers and a
closed retail store. Telemarketing payroll decreased by $.08 million and the
store closure contributed a decrease of $.04 million.

General and administrative expenses

General and administrative expenses increased from $3.2 million for the three
months ended October 31, 2000, an increase of $.9 million, or 27.9% to $4.1
million for the three months ended October 31, 2001. This is primarily the
result of increased legal expenses of $.4 million, the continued development of
our billing system of $.3 million, management fees for Summit Energy Ventures of
$.1 million, and Pennsylvania gross receipt taxes of $.1 million. The increase
in legal expenses is primarily related to litigation regarding prior management.
Summit Energy management fees are related to the formation of the Summit Energy
Venture subsidiary in July 2001. Pennsylvania gross receipts tax was not due or
paid during the three months ended October 31, 2000.

Interest income

Interest income increased to $477,675 for the three months ended October 31,
2001, an increase of $241,275 or 98.0%, from $236,400 for the three months ended
October 31, 2000. The increase is attributable to the increase in cash flow
available for investments provided from operations during fiscal 2001, partially
offset by lower yields on short-term investments during the three months ended
October 31, 2001.

Interest expense

Interest expense decreased to $103,569 for the three months ended October 31,
2001, a decrease of $113,807 or 52.4%, from $217,376 for the three months ended
October 31, 2000. The decrease is attributable to lower borrowings under our
revolving line of credit and a decline in the average interest rate for the
three months ended October 31, 2000.

Provision for income taxes

There was a benefit for income taxes during the three months ended October
31, 2001 of $.5 million compared to a provision for income taxes of $2.9 million
for the three months ended October 31, 2000. We reported a loss of $1.2 million
before income taxes for the three months ended October 31, 2001 compared to
income before income taxes of $14.7 million for the three months ended October
31, 2000.

Net income (loss)

Net income (loss) decreased to a $.7 million loss for the three months ended
October 31, 2001, a decrease of $12.5 million from the $11.8 million net income
for the three months ended October 31, 2000. This decrease in net income is
primarily attributable to a $15.4 million decrease in gross margin and an
increase in general and administrative costs of $.9 million, offset in part by a
decrease in the provision for income taxes of $3.5 million and increase in net
interest income of $.4 million.

Liquidity and Capital Resources

Through July 31, 2000, most of our capital was raised through a series of
private placements for the sale of all classes of stock which provided an
aggregate of $51.1 million of net proceeds, of which $41.3 million was used to
support our operating activities which were unprofitable through July 31, 2000.
We began profitable operations during the three months ended October 31, 2000.

Cash flow used in operations for the three months ended October 31, 2001 was
$3.6 million a decrease of $22.3 million compared with cash provided by
operations for the three months ended October 31, 2000 of $18.7 million. Net
loss for the three months ended October 31, 2001 of $.7 million, compared to a
net profit of $11.8 million for the three months ended October 31, 2000, was the
primary reason for this decrease which primarily resulted from California's
lower wholesale prices. In addition, during the three months ended October 31,
2001, there was a decrease in energy receivables of $9.1 million also due to the
lower wholesale prices in California. Investing activities for three months
ended October 31, 2001 include only purchases of property and equipment of $.4
million, a increase of $.1 million compared to the three months ended October
31, 2000.

Cash flow used in financing activities for the three months ended October 31,
2001 was $2.8 million, compared to cash used of $.1 million for the three months
ended October 31, 2000. The increase of $2.7 million is due primarily to the
$2.4 million repurchase of common stock during the three months ended October
31, 2001 and an decrease in borrowings under our line of credit of $.3 million

The most significant trend that has contributed to the decrease in our
liquidity and capital resources during the three months ended October 31, 2001
was the significant decrease in energy prices to consumers and in the wholesale
energy markets in California. We believe that consumer energy prices have
leveled off and will remain at their current level for the foreseeable future.
The wholesale energy market has also stabilized after significant fluctuations
during fiscal 2001. Based upon current market conditions, we believe we should
be able to enter into new contracts to purchase electricity at approximately the
currently contracted rate upon the expiration of our current contract in June
2002. Therefore, based on these factors, we believe that our liquidity and
capital resources will not be adversely affected in the coming year.

As a result of market conditions in California during fiscal 2001, the credit
worthiness of several participants in the marketplace with whom we conduct
business has deteriorated significantly. The resulting impact on the Company has
been a holdback of $2,226,630 in amounts due to us from the Automated Power
Exchange (APX) related to November 2000 and January 2001 activity. The APX has
informed us that the holdbacks were made, in part because PG&E and PX, which
have declared bankruptcy, did not make their scheduled payments to the APX. We
have established an allowance of $1,471,142 for doubtful accounts related to the
APX holdbacks base upon our estimates of the amounts that will ultimately be
collected from the APX. In addition, PG&E has withheld payments of approximately
$1,100,000 from their remittances to us. Although we have filed a Proof of Claim
in PG&E's bankruptcy proceedings to recover these amounts, we have established
an allowance for doubtful accounts in the amount of these withholdings.

On September 20, 2001, the CPUC issued a ruling suspending "direct access"
pursuant to legislation by the California state legislature requiring the CPUC
to suspend "direct access" in California. The suspension of "direct access"
means that retail electricity suppliers, such as the Company, will not be
allowed to actively seek customers. This ruling permits the Company to keep its
current customer base, but prohibits the Company from signing up new customers
for an undetermined period of time. In order to mitigate the risk of the state
preventing the growth of our customer base, and to enhance our profitability we
entered into long-term electric service agreements with several large commercial
and industrial customers in California. The contracts were all completed prior
to the September 20, 2001, CPUC ruling to suspend "direct access." Based on the
historical consumption data of these commercial and industrial customers, we
expect to add approximately 600,000 MWh's annually at an average rate of $89 per
MWh. Delivery to these customers began in October 2001 and is it anticipated
that all the customer meters will be on-line by January 2002. With the
achievement of these agreements, we have increased the quantity of electricity
delivered to customers by more than 100 percent in California. Revenues related
to these contracts was not material for the three months ended October 31, 2001.

As of October 31, 2001, $15 million in cash was invested in Summit Energy
Ventures. Under certain circumstances, another $10 million in cash could be
invested in Summit. If this additional amount of cash were invested with Summit,
it would reduce the amount of cash that would otherwise be used for other growth
initiatives within the Company.

We expect that our existing funds, our existing line of credit and our cash
flow from operations will be sufficient to fund our operations and meet our
capital requirements for the next 12 months.

Inflation.

Inflation has not been a material factor in either revenue or operating
expenses during our existence.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not have or use any derivative instruments as of October 31, 2001 nor
do we have any plans to enter into such derivative. We generally invest cash
equivalents in high-quality credit instruments consisting primarily of high
yielding money market funds, bankers acceptance notes and government agency
securities with maturities of 90 days or less. We do not expect any material
loss from our cash equivalents and therefore believe that our potential interest
rate exposure is not material. We do not currently invoice customers in any
currency other than the United States dollar. In addition, we do not currently
incur significant expenses denominated in foreign currencies. Therefore, we
believe that we are not currently subject to significant risk as a result of
currency fluctuations.

An electricity price change of $.01 per kWh, has an estimated annual impact
on our net revenue of:

California $18.1 million
Pennsylvania $11.0 million

Forward-Looking Statements.

This registration statement includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements other than statements of
historical facts contained in this documents are forward-looking statements.
Forward-looking statements include, but are not limited to, statements relating
to expansion opportunities for the subsidiary companies, extension of
Commonwealth's business model to new markets and industries, demand in the
market for UtiliHost services, completion of acquisitions of certain assets, and
growth or retail energy operations and demand for retail energy outsourcing and
back office solutions. When used in this document, the words "anticipate,"
"believe," "estimate," "expects," "intend," "may," "project," "plan," "should,"
and similar expressions are intended to be among the statements that identify
forward-looking statements. Although Commonwealth believes that its expectations
reflected in these forward-looking statements are based on reasonable
assumptions, such statements involve risks and uncertainties and no assurances
can be given that actual results will be consistent with these forward looking
statements. In particular, the following items may affect our future:

- The California State Legislature, the Governor's Office and the California
Public Utilities Commission may enact and enforce legislation that could
adversely affect our operations in California.

- We are required to obtain and maintain licenses from the states in which
we sell electricity.

- In certain states, competitive restructuring of retail marketing may
prevent us from selling electricity.

- We are completely dependant upon a limited number of third parties that we
do not control to generate and supply to us electricity and their failure
or delay in entering into or performing their contracts with us will have
a material adverse effect on our operations and financial condition.

- We are completely dependent upon a limited number of utilities that we do
not control for the transmission and distribution of the electricity we
sell to our customers and their failure or delay in entering into or
performing their contracts with us will have a material adverse effect on
our operations and financial condition.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in litigation relating to claims
arising out of our operations in the normal course of business. As of the date
of this report, we are not a party to any legal proceedings, the adverse outcome
of which, in management's opinion, individually or in the aggregate, would have
a material adverse effect on our results of operations or financial position.

On August 10, 2001, we settled the claims and related counterclaims filed in
the litigation entitled Commonwealth Energy Corp., et al. v. Frederick M. Bloom,
Orange County Superior Court case number 00CC15507. The material terms of the
settlement provided that we pay Mr. Bloom $4,790,000 in damages, and an
additional $2,400,000 to purchase 1,175,160 shares of our common stock claimed
to be held by Mr. Bloom and his affiliates. The settlement agreement also
provided that the remaining 4,720,000 shares of our common stock claimed to be
held by Mr. Bloom and his affiliates were void. As a material part of the
settlement, Mr. Bloom also confirmed that his record ownership of and voting
rights to a separate 1,200,000 shares were forfeited and he agreed to release
any claims under an Accommodation Agreement dated May 31,2000 and agreed that he
would have no future ownership in

Commonwealth Energy Corporation. Finally, Mr. Bloom agreed not to compete with
our business for two years in certain specified energy-related areas.

Joseph P. Saline, a board member of our Board elected by the cumulative
ballot vote of our former founder and Chief Executive Officer Frederick Bloom
(see disclosure above), has filed two lawsuits. On August 16, 2001, Mr. Saline
filed a civil suit against us seeking the production of certain corporate
records. We have provided Mr. Saline with documents he requested under the
protection of a court order which the Judge prohibits him from disclosing those
documents to other persons outside our Board of Directors members. The Company
has cooperated with Mr. Saline in his request for documents. On October 29,
2001, Mr. Saline filed a claim for certain preferred shareholder rights which
differ from the rights set forth in the Certificate of Determination concerning
preferred shares filed with the California State Department of Corporations. The
Company has answered and filed a cross-action for declaratory relief. This
litigation is ongoing.

Thirteen former stock sales employees led by Mr. David James commenced a
lawsuit against us on February 23, 2001 in Orange County Superior Court alleging
that former management had agreed to issue deeply discounted stock options to
them as additional compensation for stock sales but that we had not issued all
of the stock options allegedly earned. We have reflected on our books the
issuance of stock options covering 1,221,000 shares of Common Stock to these
plaintiffs. The plaintiffs have not identified the basis for the number of
respective shares under option they claim are owed to them and we, therefore,
cannot estimate the impact on our capital structure should they succeed in their
lawsuit. In our cross-complaint against these individuals, we have alleged that
they committed breach of contract, unfair business practices, misappropriation
of trade secrets, intentional interference with prospective economic advantage,
unjust enrichment, slander, and fraud.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

Our annual meeting of shareholders was held on November 27, 2001. Of the
27,311,703 shares of our common stock issued and outstanding and entitled to
vote at the meeting, there were present at the meeting, in person or by proxy,
the holders of approximately 19,375,000 common shares, representing 71% of the
total number of shares entitled to vote at the meeting. The percentage
represents a quorum. The following three proposals were presented and voted on
at the shareholders meeting:

Proposal One: Amendment to our Bylaws to provide for a variable Board to
be comprised of between five and nine members.

Proposal Two: Appointment of Ernst & Young LLP as auditors.

Proposal Three: Election of five directors.

Two of the three ballot proposals are contested. The outcome of the
aforementioned votes is under review and will not be available until late
December 2001 or in January 2002.

ITEM 5. OTHER INFORMATION

In order to mitigate the risk of the state preventing the growth of our
customer base, and to enhance our profitability we entered into long-term
electric service agreements with several large commercial and industrial
customers in California. The contracts were

all completed prior to the September 20, 2001, CPUC ruling to suspend "direct
access" pursuant to legislation by the California state legislature. Based on
the historical consumption data of these commercial and industrial customers, we
expect to add approximately 600,000 MWh's annually at an average rate of $89 per
MWh. Delivery to these customers began in October 2001 and is it anticipated
that all the customer meters will be on-line by January 2002. With the
achievement of these agreements, we have increased the quantity of electricity
delivered to customers by more than 100 percent in California. Revenues related
to these contracts was not material for the three months ended October 31, 2001.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.

(a) The following exhibits are attached hereto or incorporated by reference, as
required by Item 601 of Regulation S-K:

EXHIBIT
NUMBER TITLE OF EXHIBIT
------- ----------------

3.1 Articles of Incorporation of Commonwealth Energy Corporation
dated August 14, 1997 and filed with the Secretary of State of
the State of California on August 15, 1997 (1)

3.2 Certificate of Amendment of Articles of Incorporation of
Commonwealth Energy Corporation dated December 31, 1998 and
filed with the Secretary of State of the State of California
on February 19, 1999 (1)

3.3 Bylaws of Commonwealth Energy Corporation, as amended (1)

3.4 Certificate of Determination of Commonwealth Energy
Corporation dated September 22, 1997 and filed with the
Secretary of State of California on March 13, 1998

10.1 Power Purchase Agreement dated April 27, 1999, between
Commonwealth Energy Corporation and Calpine Power Services
Company (1)

10.2 First Amendment to Power Purchase Agreement dated as of April
29, 1999 (1)

10.3 Second Amendment to Power Purchase Agreement dated as of May
28, 1999, between Commonwealth Energy Corporation and Calpine
Power Services Company (1)

10.4 Loan and Security Agreement dated June 28, 2000 between
Commonwealth Energy Corporation, electricAmerica, Inc. and
electric.com, Inc. and Coast Business Credit (1)

10.5 Warrant dated June 28, 2000, issued by Commonwealth Energy
Corporation in favor of Coast Business Credit (1)

10.6 Limited Liability Company Agreement of Summit Energy Ventures,
LLC, as amended by the First Amendment to the Limited
Liability Company Agreement of Summit Energy Ventures, LLC,
dated August 2001 (1)

10.7 PECO Energy Company Confirmation Agreement dated January 30,
2001 (1)

10.8 Exelon Generation Company, LLC Confirmation Agreement dated
May 13, 2001 (1)

10.9 Standard Office Lease -- Gross dated April 1, 1997, for
property located at 15941 Redhill Avenue, Suite 200, Tustin,
California, together with Rules and Regulations and Work
Letter attached thereto (1)

10.10 Standard Sublease dated November 12, 1998, between Kurt Busch
and Commonwealth Energy Corporation, for property located at
15991 Redhill Avenue, Suite 200, Tustin, California (1)

10.11 Severance Agreement dated June 1, 2000, among Commonwealth
Energy Corporation, electricAmerica, Inc. and Frederick M.
Bloom (1)

10.12 Employment Agreement dated January 1, 2000, between
Commonwealth Energy Corporation and Ian Carter, as modified by
an Addendum to Employment Agreement dated as of November 1,
2000 (1)

10.13 Employment Agreement dated November 1, 2000, between
Commonwealth Energy Corporation and Richard Paulsen (1)

10.14 Employment Agreement dated November 1, 2000, between
Commonwealth Energy Corporation and James Oliver (1)

10.15 Employment Agreement dated November 1, 2000, between
Commonwealth Energy Corporation and John

EXHIBIT
NUMBER TITLE OF EXHIBIT
------- ----------------

Barthrop (1)

10.16 Commonwealth Energy Corporation 1999 Equity Incentive Plan for
Employees (1)

10.17 Amendment Number 6 to lease by and between Warner/Redhill
Associates and Frederick Michael Bloom (1)

10.18 Commonwealth vs. Bloom Settlement Agreement Terms, dated
August 10, 2001

(1) Incorporated by reference to the exhibits filed with the Registration
Statement on Form 10, File No. 0-33069

(b) Reports on Form 8-K.

None

SIGNATURES

All 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.

Commonwealth Energy Corporation

Date: December 14, 2001 By: /s/ Ian B. Carter
---------------------------------
Title: Chief Executive Officer

Date: December 14, 2001 By: /s/ Scott A. Petterson
---------------------------------
Title: Chief Accounting Officer and
Corporate Controller

EXHIBIT INDEX