RIDGEWOOD ELECTRIC POWER TRUST I
947 LINWOOD AVENUE
RIDGEWOOD, NEW JERSEY 07450-2939
TEL. (201) 447-9000
August 15, 2001
Securities and Exchange Commission
Washington, D.C. 20549
Dear Commission:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith a Quarterly Report on Form 10-Q for the period ended
June 30, 2001.
If you have any questions, please contact the undersigned or our counsel, Daniel
V. Gulino, at this office.
Sincerely,
RIDGEWOOD ELECTRIC POWER TRUST I
/s/Christopher I. Naunton
Christopher I. Naunton, Vice President
and Chief Financial Officer
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 2001
Commission file Number 0-24240
RIDGEWOOD ELECTRIC POWER TRUST I
(Exact name of registrant as specified in its charter.)
Delaware 22-3105824
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(201) 447-9000
----------------
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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 [X] NO [ ]
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust I
Financial Statements
June 30, 2001
Ridgewood Electric Power Trust I
Balance Sheet (unaudited)
- --------------------------------------------------------------------------------
June 30, December 31,
2001 2000
----------- -----------
Assets:
Investments in power generation projects ........... $ 7,111,894 $ 6,630,024
Cash and cash equivalents .......................... 2,170,858 1,710,744
Other assets ....................................... 66,444 15,592
Due from affiliates ................................ 188,158 --
----------- -----------
Total assets ............................. $ 9,537,354 $ 8,356,360
----------- -----------
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses .............. $ 37,210 $ 52,772
Due to affiliates .................................. 39,852 74,836
----------- -----------
Total liabilities ....................... 77,062 127,608
----------- -----------
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (105.5 shares issued and
outstanding) ................................... 9,455,848 8,236,623
Managing shareholder's accumulated
earnings(deficit) 4,444 (7,871)
----------- -----------
Total shareholders' equity ......................... 9,460,292 8,228,752
----------- -----------
Total liabilities and shareholders' equity ......... $ 9,537,354 $ 8,356,360
----------- -----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Six Months Ended Three Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Revenue:
Income from power
generation projects .... $1,282,368 $ 870,479 $1,221,676 $ 439,510
Interest income ......... 47,117 41,996 11,532 29,267
---------- ---------- ---------- ----------
Total revenue ..... 1,329,485 912,475 1,233,208 468,777
---------- ---------- ---------- ----------
Expenses:
Accounting and legal fees 34,056 19,589 21,818 9,328
Management fee .......... 46,264 38,278 20,571 19,139
Miscellaneous ........... 17,625 13,968 8,520 11,108
---------- ---------- ---------- ----------
Total expenses .... 97,945 71,835 50,909 39,575
---------- ---------- ---------- ----------
Net income .............. $1,231,540 $ 840,640 $1,182,299 $ 429,202
---------- ---------- ---------- ----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
---------- ---------- ----------
Shareholders' equity,
December 31, 2000 ...... $8,236,623 $ (7,871) $8,228,752
Net income for the period 1,219,225 12,315 1,231,540
---------- ---------- ----------
Shareholders' equity,
June 30, 2001 .......... $9,455,848 $ 4,444 $9,460,292
---------- ---------- ----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
Six Months Ended
--------------------------
June 30, 2001 June 30, 2000
----------- -----------
Cash flows from operating activities:
Net income ................................. $ 1,231,540 $ 840,640
----------- -----------
Adjustments to reconcile net income
to net cash flows from operating
activities:
Additional investment in power
generation projects ....................... (481,870) (70,687)
Changes in assets and liabilities:
Increase in due from affiliates ............ (188,158) --
Increase in other assets ................... (50,852) (22,078)
Decrease in accounts payable and accrued
expenses .................................. (15,562) (37,171)
(Decrease) increase in due to affiliates ... (34,984) 16,766
----------- -----------
Total adjustments .......................... (771,426) (113,170)
----------- -----------
Net cash provided by operating activities .. 460,114 727,470
----------- -----------
Cash flows from financing activities:
Cash distributions to shareholders ......... -- (746,765)
----------- -----------
Net cash used in financing activities ...... -- (746,765)
----------- -----------
Net increase (decrease) in cash
and cash equivalents ...................... 460,114 (19,295)
Cash and cash equivalents, beginning of year 1,710,744 1,142,009
----------- -----------
Cash and cash equivalents, end of period ... $ 2,170,858 $ 1,122,714
----------- -----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Note to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which consist of normal recurring adjustments,
necessary for the fair representation of the results for the interim periods.
The December 31, 2000 financial information has been derived from the audited
financial statements for the year ended December 31, 2000. The financial
statements should be read in conjunction with the audited financial statements
for the year ended December 31, 2000 which were included as part of Ridgewood
Electric Power Trust I's Annual Report on Form 10-K.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
2. Legal Matters
As reported more fully in Form 10-K filed by the Trust for the year ended
December 31, 2000, Brea Power Partners, L.P. ("Brea") entered into a long-term
power purchase and sale agreement with Southern California Edison Company
("SCE"), which terminates on March 23, 2005. On January 16, 2001, as a result of
the deregulation of the electric industry in California and its precarious
financial position, SCE, in an effort to conserve what little cash it possessed,
sent the Qualifying Facilities under contract with it, including the Olinda
Project (which is owned by Brea), a letter informing them that it was
temporarily suspending payments to Qualifying Facilities. SCE has not paid the
Olinda Project for energy and capacity delivered to SCE for the months of
November and December 2000, January, February and March 2001. However, on March
27, 2001, the California Public Utilities Commission ("CPUC") ordered, among
other things, that electric utilities in California pay on a going forward basis
for power delivered by Qualifying Facilities. Since such order, SCE has paid
Brea for the electric power produced and delivered from March 27, 2001 through
July 31, 2001. However, given the developing and continuing crisis in
California, there is no guarantee that such go forward payments will continue.
Moreover, despite going forward payments, SCE has not paid amounts due to Brea
for the months of November 2000 - March 2001.
As a result, on April 5, 2001, Brea filed a lawsuit against SCE in the Superior
Court of the State of California, County of Los Angeles, seeking damages of not
less than $12 million based upon, among other things, SCE's breach of contract
for failing to make full payment for November, 2000 - March, 2001 deliveries.
Brea's lawsuit is but one of at least twelve similar lawsuits filed against SCE.
On July 13, 2001, Brea and SCE entered into an "Agreement Addressing Renewable
Energy Pricing and Payment Issues" (" Renewable Agreement"). While the Renewable
Agreement executed between Brea and SCE did not affect the price SCE paid Brea
for electric energy, it did, among other things, require SCE to make an initial
10% partial payment of the outstanding balance owed to Brea for the months of
November 2000- March 2001 and, upon the occurrence of certain events, additional
partial payments. In return for such payments, Brea agreed to stay the
prosecution of the litigation against SCE. If SCE fails to make the payments
required by the Renewable Agreement, then the stay is lifted and Brea may
prosecute its litigation against SCE.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of OperationsDollar amounts in this discussion are rounded to the nearest
$1,000.
Introduction
The Trust carries its investment in Projects at fair value and does not
consolidate its financial statements with the financial statements of the
Projects. Revenue is recorded by the Trust when distributions are declared by
the Projects. Trust revenues may fluctuate from period to period depending on
the operating cash flow generated by the Projects and the amount of cash
retained by the Projects to fund capital expenditures.
Results of Operations
Total revenue increased 45.7% to $1,329,000 in the first six months of 2001 from
$912,000 in the first six months of 2000 due to a $406,000 increase in income
from the Olinda Project and $6,000 of income from the Hawthorne engines. Total
revenue increased 163.1% to $1,233,000 in the three months ended June 30, 2001
from $469,000 in the same period in 2000 due to a $781,000 increase in income
from the Olinda Project and $2,000 of income from the Hawthorne engines.
Interest income decreased $18,000 for the three months ended June 30, 2001 as
compared to same period in 2000. The increased revenue from the Olinda Project
reflects higher revenues resulting from an increase in the price of energy sold
under the Project's power contract.
Total expenses of $98,000 in the first six months of 2001 and $51,000 in the
three months ended June 30, 2001 were comparable to the $72,000 and $40,000,
respectively, incurred in the same periods in 2000.
Liquidity and Capital Resources
Obligations of the Trust are generally limited to payment of the management fee
to the Managing Shareholder and payments for certain accounting and legal
services to third persons. The Trust ceased making distributions to its
shareholders in the first quarter of 2001.
The Olinda Project currently has two engines in the process of being installed.
These engines are expected to begin full time operation in the third quarter of
2001 and will add 2.5MW of capacity to the Project. The expansion will be funded
up to $1.5 million by project financing and additional investments of cash on
hand by the Trust
The Trust anticipates that its cash flow during 2001 will be adequate to fund
its obligations, notwithstanding Southern California Edison Company's financial
difficulties. (see Legal Proceedings below)
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with some other statements made by the
Trust from time to time, contains forward-looking statements. These statements
discuss business trends and other matters relating to the Trust's future results
and the business climate and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. In order to make these statements, the Trust has had to make
assumptions as to the future. It has also had to make estimates in some cases
about events that have already happened, and to rely on data that may be found
to be inaccurate at a later time. Because these forward-looking statements are
based on assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's statements here.
The Trust therefore warns readers of this document that they should not rely on
these forward-looking statements without considering all of the things that
could make them inaccurate. The Trust's other filings with the Securities and
Exchange Commission and its Confidential Memorandum discuss many (but not all)
of the risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal or state
regulatory structures, government taxation, spending and budgetary policies,
government mandates, demand for electricity and thermal energy, the ability of
customers to pay for energy received, supplies of fuel and prices of fuels,
operational status of plant, mechanical breakdowns, availability of labor and
the willingness of electric utilities to perform existing power purchase
agreements in good faith. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
By making these statements now, the Trust is not making any commitment to revise
these forward-looking statements to reflect events that happen after the date of
this document or to reflect unanticipated future events.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As reported more fully in Form 10-K filed by the Trust for the year
ended December 31, 2000, Brea Power Partners, L.P. ("Brea") entered into a
long-term power purchase and sale agreement with Southern California Edison
Company ("SCE"), which terminates on March 23, 2005. On January 16, 2001, as a
result of the deregulation of the electric industry in California and its
precarious financial position, SCE, in an effort to conserve what little cash it
possessed, sent the Qualifying Facilities under contract with it, including the
Olinda Project (which is owned by Brea), a letter informing them that it was
temporarily suspending payments to Qualifying Facilities. SCE has not paid the
Olinda Project for energy and capacity delivered to SCE for the months of
November and December 2000, January, February and March 2001. However, on March
27, 2001, the California Public Utilities Commission ("CPUC") ordered, among
other things, that electric utilities in California pay on a going forward basis
for power delivered by Qualifying Facilities. Since such order, SCE has paid
Brea for the electric power produced and delivered from March 27, 2001 through
July 31, 2001. However, given the developing and continuing crisis in
California, there is no guarantee that such go forward payments will continue.
Moreover, despite going forward payments, SCE has not paid amounts due to Brea
for the months of November 2000 - March 2001.
As a result, on April 5, 2001, Brea filed a lawsuit against SCE in the
Superior Court of the State of California, County of Los Angeles, seeking
damages of not less than $12 million based upon, among other things, SCE's
breach of contract for failing to make full payment for November, 2000 - March,
2001 deliveries. Brea's lawsuit is but one of at least twelve similar lawsuits
filed against SCE. On July 13, 2001, Brea and SCE entered into an "Agreement
Addressing Renewable Energy Pricing and Payment Issues" (" Renewable
Agreement"). While the Renewable Agreement executed between Brea and SCE did not
affect the price SCE paid Brea for electric energy, it did, among other things,
require SCE to make an initially 10% partial payment of the outstanding balance
owed to Brea for the months of November 2000- March 2001 and, upon the
occurrence of certain events, additional partial payments. In return for such
payments, Brea agreed to stay the prosecution of the litigation against SCE. If
SCE fails to make the payments required by the Renewable Agreement, then the
stay is lifted and Brea may prosecute its litigation against SCE.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant as duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDGEWOOD ELECTRIC POWER TRUST I
Registrant
August 14, 2001 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)