Cover letter is all about selling yourself. Keep it short and brief. The entire letter should be no more than a third of a page. Employers hate reading and will not sit though a page long or half a page long cover letter.
Start by letting them know the position you're applying for.
Second is introducing yourself (current position you hold, where you went to school and major). Briefly go over your interest in working for the company. If possible research the company and find something about them worth noting and compliment them on it.
After your introduction, sell yourself. Briefly go over what you've done--or know how to do, and tell them how your skills can benefit the company. Let them know how proficient you are with your skills and how long you've had these skills. (i say skills because with engineers you sell yourself based on computer program skills, math, and management skills). After you've sold yourself, give them a salary requirement for you services (only if they ask for it).
If they offer the position to you and you're not satisfied with the compensation don't be afraid to negotiate a better offer (negotiating also comes with experience), and don't be afraid to decline low blow offers.
Follow these tips and you should be good.