UNITED STATES SECURITIES AND EXCHANGE COMMISSION 			 WASHINGTON, D.C. 20549 				 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 		For the quarterly period ended June 30, 2001 				 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 		Exact name of registrants as specified 		in their charters, state of incorporation, IRS Employer Commission address of principal executive offices Identification File Number and registrants' telephone number Number 33-87902 ESI TRACTEBEL FUNDING CORP. 04-3255377 		(a Delaware corporation) 33-87902-02 NORTHEAST ENERGY ASSOCIATES, 04-2955642 		A LIMITED PARTNERSHIP 		(a Massachusetts limited partnership) 33-87902-01 NORTH JERSEY ENERGY ASSOCIATES, 04-2955646 		A LIMITED PARTNERSHIP 		(a New Jersey limited partnership) 333-52397 ESI TRACTEBEL ACQUISITION CORP. 65-0827005 		(a Delaware corporation) 333-52397-01 NORTHEAST ENERGY, LP 65-0811248 		(a Delaware limited partnership) 			 c/o FPL Energy, LLC 			 700 Universe Boulevard 			 Juno Beach, Florida 33408 			 (561) 691-7171 Indicate by check mark whether the registrants (1) have 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 and (2) have been subject to such filing requirements for the past 90 days. Yes [X] No [ ] 		 APPLICABLE ONLY TO CORPORATE ISSUERS: As of July 31, 2001, there were issued and outstanding 10,000 shares of ESI Tractebel Funding Corp.'s common stock. As of July 31, 2001, there were issued and outstanding 20 shares of ESI Tractebel Acquisition Corp.'s common stock. 			_________________________ This combined Form 10-Q represents separate filings by ESI Tractebel Funding Corp., Northeast Energy Associates, A Limited Partnership, North Jersey Energy Associates, A Limited Partnership, ESI Tractebel Acquisition Corp. and Northeast Energy, LP. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Each registrant makes representations only as to itself and makes no representations whatsoever as to any other registrant. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION 			 REFORM ACT OF 1995 In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), ESI Tractebel Funding Corp. (Funding Corp.), Northeast Energy Associates, A Limited Partnership (NEA) and North Jersey Energy Associates, A Limited Partnership (NJEA) (collectively, the Partnerships), ESI Tractebel Acquisition Corp. (Acquisition Corp.) and Northeast Energy, LP (NE LP) (all five entities collectively, the Registrants) are hereby filing cautionary statements identifying important factors that could cause the Registrants' actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of the Registrants in this combined Form 10-Q, in presentations, in response to questions or otherwise. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, estimated, projection, outlook) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause the Registrants' actual results to differ materially from those contained in forward-looking statements made by or on behalf of the Registrants. Any forward-looking statement speaks only as of the date on which such statement is made, and the Registrants undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. Some important factors that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements include changes in laws or regulations, changing governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission and the Public Utility Regulatory Policies Act of 1978, as amended, acquisition, disposal, depreciation and amortization of assets and facilities, operation and construction of plant facilities, recovery of fuel and purchased power costs, and present or prospective competition. The business and profitability of the Registrants are also influenced by economic and geographic factors including political and economic risks, changes in and compliance with environmental and safety laws and policies, weather conditions, population growth rates and demographic patterns, competition for retail and wholesale customers, availability, pricing and transportation of fuel and other energy commodities, market demand for energy from plants or facilities, changes in tax rates or policies or in rates of inflation or in accounting standards, unanticipated delays or changes in costs for capital projects, unanticipated changes in operating expenses and capital expenditures, capital market conditions, competition for new energy development opportunities and legal and administrative proceedings (whether civil, such as environmental, or criminal) and settlements. All such factors are difficult to predict, contain uncertainties which may materially affect actual results, and are beyond the control of the Registrants. 		 PART I - FINANCIAL INFORMATION Item 1. Condensed Financial Statements 	 NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES 		 CONDENSED CONSOLIDATED BALANCE SHEETS 			 (Thousands of Dollars) 				(Unaudited) 											 June 30, December 31, 												2001 2000 ASSETS Current assets: Cash and cash equivalents .............................................................. $ 68,200 $ 35,360 Accounts receivable .................................................................... 38,222 32,857 Due from related party ................................................................. 3,513 2,762 Spare parts inventories ................................................................ 10,264 11,251 Fuel inventories ....................................................................... 5,999 3,793 Prepaid expenses and other current assets .............................................. 641 452 Total current assets ................................................................. 126,839 86,475 Non-current assets: Deferred debt issuance costs (net of accumulated amortization of $2,127 and $1,811, respectively) ................................................................ 4,833 5,149 Cogeneration facilities and carbon dioxide facility (net of accumulated depreciation of $75,961 and $64,866, respectively) ................................... 444,178 454,068 Power purchase agreements (net of accumulated amortization of $178,892 and $152,246, respectively) .............................................................. 709,864 736,510 Other assets ........................................................................... 91 107 Total non-current assets ............................................................. 1,158,966 1,195,834 TOTAL ASSETS ............................................................................. $1,285,805 $1,282,309 LIABILITIES AND PARTNERS' EQUITY Current liabilities: Current portion of notes payable - the Funding Corp. ................................... $ 31,500 $ 20,160 Accounts payable ....................................................................... 30,900 17,457 Accrued interest payable ............................................................... 19,880 - Due to related parties ................................................................. 2,965 954 Other accrued expenses ................................................................. 17,393 12,811 Total current liabilities ............................................................ 102,638 51,382 Non-current liabilities: Deferred credit - fuel contracts ........................................................ 261,312 271,735 Notes payable - the Funding Corp. ....................................................... 387,380 398,720 Note payable - the Acquisition Corp. .................................................... 220,000 220,000 Amounts due utilities for energy bank balances .......................................... 160,363 162,756 Lease payable ........................................................................... 951 969 Total non-current liabilities ......................................................... 1,030,006 1,054,180 COMMITMENTS AND CONTINGENCIES Partners' equity: General partners ........................................................................ 3,084 3,534 Limited partners ........................................................................ 151,094 173,213 Accumulated other comprehensive loss .................................................... (1,017) - Total partners' equity ................................................................ 153,161 176,747 TOTAL LIABILITIES AND PARTNERS' EQUITY .................................................... $1,285,805 $1,282,309 This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the combined Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (2000 Form 10-K) for NE LP. 	 NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES 	 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 			 (Thousands of Dollars) 				(Unaudited) 									 Three Months Ended Six Months Ended 									 June 30, June 30, 									 2001 2000 2001 2000 REVENUES ............................................................ $ 77,449 $ 74,949 $169,998 $165,051 COSTS AND EXPENSES: Fuel .............................................................. 39,838 34,570 86,180 71,690 Operations and maintenance ........................................ 3,345 3,912 6,975 7,428 Depreciation and amortization ..................................... 18,873 18,568 37,746 37,141 General and administrative ........................................ 2,624 1,994 4,988 4,280 Total costs and expenses ........................................ 64,680 59,044 135,889 120,539 OPERATING INCOME .................................................... 12,769 15,905 34,109 44,512 OTHER EXPENSE (INCOME): Amortization of debt issuance costs ............................... 161 159 318 316 Interest expense .................................................. 18,634 19,294 37,240 38,533 Interest income ................................................... (962) (1,022) (1,383) (1,352) Change in fair value of derivatives ............................... 2,017 - 20,098 - Total other expense - net ....................................... 19,850 18,431 56,273 37,497 Income (loss) before cumulative effect of a change in accounting principle .............................................. (7,081) (2,526) (22,164) 7,015 Cumulative effect of adopting FAS 133 - Accounting for Derivative Instruments and Hedging Activities ..................... - - 18,268 - NET INCOME (LOSS).................................................... $ (7,081) $ (2,526) $ (3,896) $ 7,015 This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2000 Form 10-K for NE LP. 	 NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES 	 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 			 (Thousands of Dollars) 				(Unaudited) 												 Six Months Ended 													 June 30, 												 2001 2000 NET CASH PROVIDED BY OPERATING ACTIVITIES .................................................... $ 52,709 $ 32,948 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ....................................................................... (1,197) (129) Net cash used in investing activities .................................................... (1,197) (129) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payment on the Funding Corp. notes ............................................... - (13,166) Distributions to partners .................................................................. (18,672) (37,043) Net cash used in financing activities .................................................... (18,672) (50,209) Net increase (decrease) in cash and cash equivalents ......................................... 32,840 (17,390) Cash and cash equivalents at beginning of period ............................................. 35,360 33,085 Cash and cash equivalents at end of period ................................................... $ 68,200 $ 15,695 This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2000 Form 10-K for NE LP. 	 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND 	 NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP 		 CONDENSED COMBINED BALANCE SHEETS 			 (Thousands of Dollars) 				(Unaudited) 											 June 30, December 31, 											 2001 2000 ASSETS Current assets: Cash and cash equivalents ............................................................. $ 67,266 $ 34,471 Accounts receivable ................................................................... 38,222 32,857 Due from related party ................................................................ 3,513 2,762 Spare parts inventories ............................................................... 10,264 11,251 Fuel inventories ...................................................................... 5,999 3,793 Prepaid expenses and other current assets ............................................. 641 452 Total current assets ................................................................ 125,905 85,586 Non-current assets: Cogeneration facilities and carbon dioxide facility (net of accumulated depreciation of $75,961 and $64,866, respectively) .................................. 444,178 454,068 Power purchase agreements (net of accumulated amortization of $178,892 and $152,246, respectively) ............................................................. 709,864 736,510 Other assets .......................................................................... 91 107 Total non-current assets ............................................................ 1,154,133 1,190,685 TOTAL ASSETS ............................................................................ $1,280,038 $1,276,271 LIABILITIES AND PARTNERS' EQUITY Current liabilities: Current portion of notes payable - the Funding Corp. .................................. $ 31,500 $ 20,160 Accounts payable ...................................................................... 30,900 17,457 Accrued interest payable .............................................................. 19,880 - Due to related parties ................................................................ 2,965 842 Other accrued expenses ................................................................ 17,296 12,784 Total current liabilities ........................................................... 102,541 51,243 Non-current liabilities: Deferred credit - fuel contracts ...................................................... 261,312 271,735 Notes payable - the Funding Corp. ..................................................... 387,380 398,720 Amounts due utilities for energy bank balances ........................................ 160,363 162,756 Lease payable ......................................................................... 951 969 Total non-current liabilities ....................................................... 810,006 834,180 COMMITMENTS AND CONTINGENCIES Partners' equity: General partner ....................................................................... 3,685 3,909 Limited partners ...................................................................... 364,823 386,939 Accumulated other comprehensive loss .................................................. (1,017) - Total partners' equity .............................................................. 367,491 390,848 TOTAL LIABILITIES AND PARTNERS' EQUITY .................................................. $1,280,038 $1,276,271 This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2000 Form 10-K for NEA and NJEA. 	 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND 	 NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP 		 CONDENSED COMBINED STATEMENTS OF OPERATIONS 			 (Thousands of Dollars) 				(Unaudited) 									 Three Months Ended Six Months Ended 									 June 30, June 30, 									 2001 2000 2001 2000 REVENUES ............................................................ $ 77,449 $ 74,949 $169,998 $165,051 COSTS AND EXPENSES: Fuel .............................................................. 39,838 34,570 86,180 71,690 Operations and maintenance ........................................ 3,345 3,912 6,975 7,428 Depreciation and amortization ..................................... 18,873 18,568 37,746 37,141 General and administrative ........................................ 2,624 1,994 4,988 4,280 Total costs and expenses ........................................ 64,680 59,044 135,889 120,539 OPERATING INCOME .................................................... 12,769 15,905 34,109 44,512 OTHER EXPENSE (INCOME): Interest expense .................................................. 14,239 14,901 28,460 29,744 Interest income ................................................... (839) (1,012) (1,266) (1,335) Change in fair value of derivatives ............................... 2,017 - 20,098 - Total other expense - net ....................................... 15,417 13,889 47,292 28,409 Income (loss) before cumulative effect of a change in accounting principle .............................................. (2,648) 2,016 (13,183) 16,103 Cumulative effect of adopting FAS 133 - Accounting for Derivative Instruments and Hedging Activities ..................... - - 18,268 - NET INCOME (LOSS).................................................... $ (2,648) $ 2,016 $ 5,085 $ 16,103 This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2000 Form 10-K for NEA and NJEA. 	 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND 	 NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP 		 CONDENSED COMBINED STATEMENTS OF CASH FLOWS 			 (Thousands of Dollars) 				(Unaudited) 												 Six Months Ended 													 June 30, 												 2001 2000 NET CASH PROVIDED BY OPERATING ACTIVITIES .................................................... $ 61,417 $ 41,686 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ....................................................................... (1,197) (129) Net cash used in investing activities .................................................... (1,197) (129) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payment on the Funding Corp. notes ............................................... - (13,166) Distributions to partners .................................................................. (27,425) (45,832) Net cash used in financing activities .................................................... (27,425) (58,998) Net increase (decrease) in cash and cash equivalents ......................................... 32,795 (17,441) Cash and cash equivalents at beginning of period ............................................. 34,471 32,144 Cash and cash equivalents at end of period ................................................... $ 67,266 $ 14,703 This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2000 Form 10-K for NEA and NJEA. 			ESI TRACTEBEL FUNDING CORP. 			 CONDENSED BALANCE SHEETS 			 (Thousands of Dollars) 				(Unaudited) 											 June 30, December 31, 											 2001 2000 ASSETS Current assets: Cash .................................................................................. $ 1 $ 1 Interest receivable from the Partnerships ............................................. 19,880 - Current portion of notes receivable from the Partnerships ............................. 31,500 20,160 Total current assets ................................................................ 51,381 20,161 Notes receivable from the Partnerships .................................................. 387,380 398,720 TOTAL ASSETS ............................................................................ $ 438,761 $ 418,881 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt securities payable ............................................ $ 31,500 $ 20,160 Accrued interest ...................................................................... 19,880 - Total current liabilities ........................................................... 51,380 20,160 Debt securities payable ................................................................. 387,380 398,720 COMMITMENTS AND CONTINGENCIES Stockholders' equity: Common stock, no par value, 10,000 shares authorized, issued and outstanding .......... 1 1 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .............................................. $ 438,761 $ 418,881 		 CONDENSED STATEMENTS OF OPERATIONS 			 (Thousands of Dollars) 				 (Unaudited) 									 Three Months Ended Six Months Ended 									 June 30, June 30, 									 2001 2000 2001 2000 Interest income ..................................................... $ 9,940 $ 10,495 $ 19,880 $ 20,991 Interest expense .................................................... (9,940) (10,495) (19,880) (20,991) NET INCOME........................................................... $ - $ - $ - $ - 		 CONDENSED STATEMENTS OF CASH FLOWS 			 (Thousands of Dollars) 				 (Unaudited) 												 Six Months Ended 													 June 30, 												 2001 2000 NET CASH PROVIDED BY OPERATING ACTIVITIES .................................................... $ - $ - CASH FLOWS FROM FINANCING ACTIVITIES: Principal payment received from the Partnerships ........................................... - 13,166 Principal payment on debt .................................................................. - (13,166) Net cash used in financing activities .................................................... - - Net increase in cash ......................................................................... - - Cash at beginning of period .................................................................. 1 1 Cash at end of period ........................................................................ $ 1 $ 1 These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2000 Form 10-K for the Funding Corp. 		 ESI TRACTEBEL ACQUISITION CORP. 			 CONDENSED BALANCE SHEETS 			 (Thousands of Dollars) 				 (Unaudited) 											 June 30, December 31, 											 2001 2000 ASSETS Due from NE LP .......................................................................... 152 152 Note receivable from NE LP .............................................................. 220,000 220,000 TOTAL ASSETS ............................................................................ $ 220,152 $ 220,152 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Income taxes payable .................................................................. $ 15 $ 14 Deferred credit - interest rate hedge ................................................... 106 112 Debt securities payable ................................................................. 220,000 220,000 COMMITMENTS AND CONTINGENCIES Stockholders' equity: Common stock, $.10 par value, 100 shares authorized, 20 shares issued and outstanding ..................................................................... - - Retained earnings ..................................................................... 31 26 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................................... $ 220,152 $ 220,152 		 CONDENSED STATEMENTS OF OPERATIONS 			 (Thousands of Dollars) 				 (Unaudited) 									 Three Months Ended Six Months Ended 									 June 30, June 30, 									 2001 2000 2001 2000 Interest income ..................................................... $ 4,394 $ 4,393 $ 8,789 $ 8,789 Interest expense .................................................... (4,391) (4,390) (8,782) (8,783) Income before income taxes .......................................... 3 3 7 6 Income tax expense .................................................. (1) (1) (2) (2) NET INCOME........................................................... $ 2 $ 2 $ 5 $ 4 These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2000 Form 10-K for the Acquisition Corp. 	 NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES 	 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND 	 NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP 			ESI TRACTEBEL FUNDING CORP. 		 ESI TRACTEBEL ACQUISITION CORP. 	 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 	 NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS 		 NOTES TO CONDENSED FINANCIAL STATEMENTS 				 (Unaudited) The accompanying condensed consolidated financial statements, condensed combined financial statements and condensed financial statements should be read in conjunction with the 2000 Form 10-K for the Registrants. In the opinion of the Registrants' management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. The Acquisition Corp. had no cash transactions for the six months ended June 30, 2001 and 2000 and therefore has not presented a statement of cash flows. The results of operations for an interim period may not give a true indication of results for the year. 1. Combined Statement of Partners' Equity The Combined Statement of Partners' Equity of NEA's and NJEA's general partner (GP) and limited partner (LP) equity balances are comprised of the following: 					 NEA NJEA Combined 				 GP LP Total GP LP Total GP(a) LP(b) Total 								 (Thousands of Dollars) Balances, December 31, 2000 .. $ 1,447 $ 143,336 $ 144,783 $ 2,462 $ 243,603 $ 246,065 $ 3,909 $ 386,939 $ 390,848 Balances, June 30, 2001 ...... $ 1,338 $ 132,552 $ 133,890 $ 2,337 $ 231,264 $ 233,601 $ 3,675 $ 363,816 $ 367,491 ____________________ (a) Includes GP's pro rata share of accumulated other comprehensive loss. (b) Includes LP's pro rata share of accumulated other comprehensive loss. 2. Accounting for Derivative Instruments and Hedging Activities Effective January 1, 2001, NE LP and the Partnerships adopted Statement of Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by FAS 137 and 138 (collectively, FAS 133). As a result, beginning in January 2001, derivative instruments are recorded on NE LP's and the Partnerships' balance sheets as an asset (in prepaid expenses and other current assets) or liability (in other accrued expenses), measured at fair value. NE LP and the Partnerships use derivative instruments (primarily swaps and options) to manage the commodity price risk inherent in fuel purchases. For NE LP and the Partnerships, changes in the derivatives' fair values are recognized currently in earnings (in change in fair value of derivatives) unless hedge accounting is applied. While substantially all of NE LP's and the Partnerships' derivative transactions are entered into for the purposes described above, hedge accounting is only applied where specific criteria are met and it is practicable to do so. In order to apply hedge accounting, the transaction must be designated as a hedge and it must be highly effective. The hedging instrument's effectiveness is assessed utilizing regression analysis at the inception of the hedge and on at least a quarterly basis throughout its life. Hedges are considered highly effective when a correlation coefficient of .8 or higher is achieved. Substantially all of the transactions that NE LP and the Partnerships have designated as hedges are cash flow hedges. The effective portion of the gain or loss on a derivative instrument designated as a cash flow hedge is reported as a component of other comprehensive income and is reclassified into earnings in the period(s) during which the transaction being hedged affects earnings. The ineffective portion of these hedges flows through earnings in the current period. Settlement gains and losses are passed through fuel expense. In January 2001, NE LP and the Partnerships recorded an $18.3 million gain as the cumulative effect of adopting FAS 133, representing the effect of those derivative instruments for which hedge accounting was not applied. For the three and six months ended June 30, 2001, NE LP and the Partnerships recorded a net mark-to-market loss of $2.0 million and $20.1 million, respectively representing the change in fair value of derivative instruments. For those contracts where hedge accounting was applied, the adoption of the new rules resulted in a credit of approximately $4.3 million to other comprehensive income for NE LP and the Partnerships. Comprehensive income (loss) of NE LP and the Partnerships, totaling ($11.6) million and ($7.1) million, respectively, for the three months ended June 30, 2001 and totaling ($2.5) million and $2.0 million, respectively, for the three months ended June 30, 2000, includes net income (loss) for those periods. Comprehensive income (loss) of NE LP and the Partnerships, totaling ($4.9) million and $4.1 million, respectively, for the six months ended June 30, 2001 and totaling $7.0 million and $16.1 million, respectively, for the six months ended June 30, 2000, respectively, includes net income (loss) for those periods. Comprehensive income (loss) of NE LP and the Partnerships include approximately ($3.5) million and ($4.4) million of net unrealized losses, for the three months and six months ended June 30, 2001, respectively, on qualifying cash flow hedges of forecasted fuel purchases through October 2001. Approximately $1.0 million of accumulated other comprehensive income of NE LP and the Partnerships were reclassified into earnings during the six months ended June 30, 2001. Accumulated other comprehensive income (loss) is separately displayed in NE LP's and the Partnerships' balance sheets. Approximately $1.0 million of accumulated other comprehensive income of NE LP and the Partnerships were reclassified into earnings during the six months ended June 30, 2001. All of the accumulated other comprehensive income (loss) at June 30, 2001 will be reclassified into earnings within the next twelve months as the hedged fuel is consumed. Within other comprehensive income (loss), approximately ($3.5) million and ($4.4) million represent the effective portion of the net loss on cash flow hedge during the three and six months ended June 30, 2001, respectively. In June 2001, the Financial Accounting Standards Board (FASB) reached conclusions on several derivative accounting issues related to the power generation industry, which became effective July 1, 2001. Management is in the process of evaluating the conclusions reached by the FASB and is unable to estimate the effects, if any, on NE LP's and the Partnerships' financial statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion should be read in conjunction with the Notes to Condensed Consolidated Financial Statements, Notes to Condensed Combined Financial Statements and Notes to Condensed Financial Statements contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2000 Form 10-K for the Registrants. The results of operations for an interim period may not give a true indication of results for the year. In the following discussion, all comparisons are with the corresponding items in the prior year. Results of Operations NE LP and the Partnerships - Net income declined for the three and six months ended June 30, 2001 primarily due to increased fuel costs and the adoption of FAS 133, partly offset by slightly higher revenues. The adoption of FAS 133, which became effective January 1, 2001, negatively affected NE LP and the Partnerships' earnings by $2.0 million and $1.8 million for the three and six months ended June 30, 2001, respectively. For additional information regarding FAS 133, see Note 2. Revenues for the three months ended June 30, 2001 improved primarily as a result of increased electricity sales prices. Revenues for the three months ended June 30, 2001 and 2000 were comprised of $76.6 million and $73.8 million of power sales to utilities and $.8 million and $1.1 million of steam sales, respectively. Power sales to utilities for the three months ended June 30, 2001 and 2000 reflect changes in utility energy bank balances of $5.1 million and $5.3 million, respectively. The changes in the energy bank balances, which increased reported revenues, are determined in accordance with scheduled or specified rates under certain power purchase agreements. Fuel expense for the three months ended June 30, 2001 and 2000 increased primarily as a result of the increased price of natural gas required to fuel the facilities. These fuel costs for the three months ended June 30, 2001 and 2000, were partly offset by $5.2 million of deferred credit amortization for fuel contracts. Operations and maintenance expenses for the three months ended June 30, 2001 increased primarily due to higher annual maintenance costs incurred during the Bellingham plant scheduled outage in May. General and administrative expenses for the three months ended June 30, 2001 increased primarily due to increased property taxes and professional fees. Revenues for the six months ended June 30, 2001 improved primarily as a result of increased electricity sales prices. Revenues for the six months ended June 30, 2001 and 2000 were comprised of $168.0 million and $162.7 million of power sales to utilities and $2.0 million and $2.4 million of steam sales, respectively. Power sales to utilities for the six months ended June 30, 2001 and 2000 reflect changes in utility energy bank balances of $11.0 million and $11.6 million, respectively. The changes in the energy bank balances, which increased reported revenues, are determined in accordance with scheduled or specified rates under certain power purchase agreements. Fuel expense for the six months ended June 30, 2001 and 2000 increased primarily as a result of the increased price of natural gas required to fuel the facilities. These fuel costs for the six months ended June 30, 2001 and 2000 were partly offset by $10.4 million of deferred credit amortization for fuel contracts. General and administrative expenses for the six months ended June 30, 2001 increased primarily due to increased property taxes and professional fees. In January 2001, NE LP and the Partnerships recorded an $18.3 million gain as the cumulative effect of adopting FAS 133, representing the effect of those derivative instruments for which hedge accounting was not applied. In addition, for the six months ended June 30, 2001, NE LP and the Partnerships recorded a net mark-to-market loss of $20.1 million representing the change in fair value of derivative instruments. See Note 2. Each of NE LP and the Partnerships make scheduled interest and/or principal payments on their outstanding debt. Each are scheduled to make semi-annual debt and/or interest payments on June 30 and December 30. Interest expense for NE LP and the Partnerships decreased as a result of decreasing principal balances on the securities payable. The Partnerships' principal and interest payments due on June 30, 2001, a non-business day, were made on July 2, 2001. The Funding Corp. and the Acquisition Corp. - Both the Funding Corp. and the Acquisition Corp. use interest income and/or principal payments received from the notes receivable from the Partnerships and NE LP, respectively, to make scheduled interest and/or principal payments on their outstanding debt. Both are scheduled to make semi-annual debt and/or interest payments on June 30 and December 30. Interest expense for the Funding Corp. decreased as a result of decreasing principal balances on the securities payable. The Funding Corp.'s principal and interest payments due on June 30, 2001, a non-business day, were made on July 2, 2001. Liquidity and Capital Resources The Registrants - Cash flow generated by the Partnerships year to date has been and is expected to remain sufficient for at least the next twelve months to fund operating expenses of the Registrants, as well as fund the debt service requirements of the Funding Corp. and the Acquisition Corp. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K - None 				 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. 	 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP (ESI Northeast Energy GP, Inc. as Administrative General Partner) 	 NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP (ESI Northeast Energy GP, Inc. as Administrative General Partner) 			 NORTHEAST ENERGY, LP (ESI Northeast Energy GP, Inc. as Administrative General Partner) 			 ESI TRACTEBEL FUNDING CORP. 		 ESI TRACTEBEL ACQUISITION CORP. 			 (Registrants) Date: August 14, 2001 			 ROBERT L. MCGRATH 			 Robert L. McGrath Vice President and Treasurer of ESI Northeast Energy GP, Inc. 		 Treasurer of ESI Tractebel Funding Corp. 		 Treasurer of ESI Tractebel Acquisition Corp. (Principal Financial and Principal Accounting Officer of the Registrants)