UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
   Washington, D.C.  20549

          FORM 10-Q

 (Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended               June 30, 1999
                                 OR

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

    For the transition period _________________ to ___________________

    Commission File Number                                1-5366



                 EASTERN UTILITIES ASSOCIATES
       (Exact name of registrant as specified in its charter)


          Massachusetts                                 04-1271872
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                  Identification No.)


      One Liberty Square, Boston, Massachusetts
      (Address of principal executive offices)
            02109
         (Zip Code)

        (617)357-9590
 (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..........


    Indicate  the number of shares  outstanding of each of the  issuer's
    classes of  common stock, as of the latest practical date.
              Class                          Outstanding at July 31, 1999
        Common Shares, $5 par value          20,435,997 shares

<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

EASTERN UTILITIES ASSOCIATES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands)
<CAPTION>

                                                            June 30,       December 31,
                                                              1999            1998
<S>                                                        <C>              <C>
ASSETS
  Utility Plant and Other Investments:
     Utility Plant in Service                            $   928,314     $ 1,000,243
     Less:  Accumulated Provision for Depreciation
                and Amortization                             327,251         353,780
     Net Utility Plant in Service                            601,063         646,463
     Construction Work in Progress                            11,953           5,151
          Net Utility Plant                                  613,016         651,614
     Investments in Jointly Owned Companies                   64,952          69,485
     Non-Utility Plant - Net                                  52,516          55,274
          Total Plant and Other Investments                  730,484         776,373
  Current Assets:
     Cash and Temporary Cash Investments                      60,375          32,090
     Accounts Receivable, Net                                 90,692          95,267
     Notes Receivable                                         22,558          27,078
     Fuel, Materials and Supplies                              5,834          13,434
     Other Current Assets                                      6,210           8,448
          Total Current Assets                               185,669         176,317
  Deferred Debits and Other Non-Current Assets               451,703         349,948
          Total Assets                                   $ 1,367,856     $ 1,302,638
  LIABILITIES AND CAPITALIZATION
  Capitalization:
     Common Shares, $5 Par Value                         $   102,180     $   102,180
     Other Paid-In Capital                                   219,781         218,959
     Common Share Expense                                     (3,931)         (3,931)
     Retained Earnings                                        36,324          56,466
          Total Common Equity                                354,354         373,674
     Non-Redeemable Preferred Stock - Net                      6,900           6,900
     Redeemable Preferred Stock - Net                         28,177          27,995
     Long-Term Debt - Net                                    302,219         310,346
          Total Capitalization                               691,650         718,915
  Current Liabilities:
     Long-Term Debt Due Within One Year                       21,914          21,911
     Notes Payable                                            51,471          63,574
     Accounts Payable                                         26,749          29,018
     Taxes Accrued                                            14,094          14,208
     Interest Accrued                                          6,788           6,997
     Other Current Liabilities                                38,507          34,908
          Total Current Liabilities                          159,523         170,616
  Deferred Credits and Other Non-Current Liabilities         391,874         271,078
  Accumulated Deferred Taxes                                 124,809         142,029
          Total Liabilities and Capitalization           $ 1,367,856     $ 1,302,638


See accompanying notes to consolidated condensed financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In Thousands Except Number of Shares and Per Share Amounts)

<CAPTION>

                                               Three Months Ended            Six Months Ended
                                                  June 30,                     June 30,
                                               1999          1998           1999         1998
<S>                                          <C>            <C>         <C>             <C>

Operating Revenues                         $  133,443    $  130,046     $  272,320   $  269,352
Operating Expenses:
    Fuel and Purchased Power                   61,184        51,415        124,892      105,712
    Other Operation and Maintenance            39,236        44,132         79,576       85,147
    Depreciation and Amortization              10,720        13,125         23,461       25,983
    Taxes - Other Than Income                   4,771         5,755         11,230       11,815
    Income Taxes - Current                     11,148            42         15,351        2,160
                 - Deferred (Credit)           (6,483)        3,045         (6,508)       7,512
          Total                               120,576       117,514        248,002      238,329
Operating Income                               12,867        12,532         24,318       31,023
Other Income and (Deductions):
Energy-Related Asset Adjustments              (24,669)                     (24,669)
Income Tax Impact of Energy                         0
      Related Asset Adjustments                 8,973                        8,973
Other Income - Net                              3,007         2,983          6,118        5,741
Income Before Interest Charges                    178        15,515         14,740       36,764
Interest Charges:
    Interest on Long-Term Debt                  6,443         7,452         12,918       15,134
    Other Interest Expense                      1,873         1,745          3,930        3,716
    Allowance for Borrowed Funds Used
      During Construction (Credit)               (125)         (132)          (264)        (228)
Net Interest Charges                            8,191         9,065         16,584       18,622
Net (Loss) Income                              (8,013)        6,450         (1,844)      18,142
Preferred Dividends of Subsidiaries               577           577          1,153        1,153
Consolidated Net (Loss) Earnings           $   (8,590)   $    5,873     $   (2,997)  $   16,989




Weighted Average Number of
  Common Shares Outstanding                20,435,997    20,435,997     20,435,997   20,435,997
Consolidated Basic and Diluted (Loss) Earnings
  Per Average Common Share                     ($0.42)        $0.29         ($0.15)       $0.83

Dividends Paid                                 $0.415        $0.415          $0.83        $0.83

See accompanying notes to consolidated condensed financial statements.

</TABLE>

<TABLE>
EASTERN UTILITIES ASSOCIATES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
<CAPTION>


                                                                     Six Months Ended
                                                                         June 30,
                                                                    1999        1998
<S>                                                             <C>              <C>

CASH FLOW FROM OPERATING ACTIVITIES:
Net (Loss) Income                                                 $   (1,844)    $ 18,142
Adjustments to Reconcile Net Income
   to Net Cash Provided from Operating Activities:
      Depreciation and Amortization                                   26,718       28,229
      Deferred Taxes                                                 (15,717)       7,156
      Non-cash Expenses on Sales of Investments
        in Energy Savings Projects                                     3,605        6,314
      Energy Related Asset Adjustments                                23,813
      Investment Tax Credit, Net                                      (1,798)        (782)
      Allowance for Funds Used During Construction                       (98)         (52)
      Collections and sales of project notes and leases receivable     3,996        7,661
      Other - Net                                                     (6,970)      (10,723
Change in Operating Assets and Liabilities                               764       (10,067
Net Cash Provided From Operating Activities                           32,469       45,878

CASH FLOW FROM INVESTING ACTIVITIES:
   Construction Expenditures                                         (27,652)      (26,744
   Proceeds from Divestiture of Generating Assets                     57,445
   Collections on Notes and Lease Receivables of EUA Cogenex           5,681        6,842
   Increase in Other Investments                                      (1,300)      (3,323)
Net Cash (Used in) Investment Activities                              34,174       (23,225

CASH FLOW FROM FINANCING ACTIVITIES:
   Redemptions:
      Long-Term Debt                                                  (8,141)      (28,738
   EUA Common Share Dividends Paid                                   (16,962)      (16,962
   Subsidiary Preferred Dividends Paid                                (1,153)      (1,153)
   Net (Decrease) Increase in Short-Term Debt                        (12,102)      25,760
Net Cash (Used in) Financing Activities                              (38,358)      (21,093
Net Increase in Cash and Temporary Cash Investments                   28,285        1,560

Cash and Temporary Cash Investments at Beginning of Period            32,090        7,252

Cash and Temporary Cash Investments at End of Period              $   60,375     $  8,812

Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest (Net of Capitalized Interest)                      $   13,759     $ 16,826
      Income Taxes                                                $   15,261     $ 10,710
Supplemental schedule of non-cash investing activities:
   Conversion of Investments in Energy Savings
     Projects to Notes and Leases Receivable                      $     (282)    $    966

See accompanying notes to consolidated condensed financial statements.
</TABLE>



                    EASTERN UTILITIES ASSOCIATES
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

     The accompanying Notes should be read in conjunction with the Notes to
Consolidated Financial Statements incorporated in the Eastern Utilities
Associates (EUA or the Company) 1998 Annual Report on Form 10-K as amended on
Form 10-K/A and the Company's Quarterly Report on Form 10-Q for the period
ended March 31, 1999.

Note A -  In the opinion of the Company, the accompanying unaudited
          consolidated condensed financial statements contain all adjustments
          (consisting of only normal recurring accruals) necessary to present
          fairly its financial position as of June 30, 1999 and December 31,
          1998, and the results of operations for the three and six months
          ended June 30, 1999 and 1998 and cash flows for the six months ended
          June 30, 1999 and 1998.  The year-end consolidated condensed balance
          sheet data was derived from audited financial statements but does not
          include all disclosures required under generally accepted accounting
          principles.

          In June 1998, the Financial Accounting Standards Board issued SFAS
          133, "Accounting for Derivative Instruments and Hedging Activities,"
          which is effective in fiscal year 2001.  This statement requires the
          recognition of all derivative instruments as either assets or
          liabilities in the statement of financial position and the
          measurement of those instruments at fair value.  The Company does not
          expect SFAS 133 to have a material impact on its financial position
          or results of operations.

          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.  Actual results
          could differ from those estimates.

          In July 1999, EUA filed an application under the Public Utility
          Holding Company Act with the Securities and Exchange Commission
          requesting authorization for Eastern Edison to transfer all of
          Eastern Edison's investment in Montaup's capitalization, including
          Montaup's preferred stock, common stock and debenture bonds, to EUA.
          Montaup would then become a wholly-owned subsidiary of EUA.

Note B -  Results shown, net of after-tax charges of the energy related asset
          adjustments, for the respective interim periods being reported herein
          are not necessarily indicative of results to be expected for the
          fiscal years due to seasonal factors which are inherent in electric
          utilities in New England.  A greater proportionate amount of revenues
          is earned in the first and fourth quarters (winter season) of most
          years because more electricity is sold due to weather conditions,
          fewer day-light hours, etc.

          Energy Related Asset Adjustments

          As EUA has previously disclosed, it is continually evaluating its
          investments in energy related projects.  During the second quarter of
          1999, management determined to discontinue its involvement in certain
          projects.  As a result of this decision, EUA recognized non-recurring
          after-tax charges to its earnings of $15.7 million in the second
          quarter of 1999. These non-recurring charges have settled future
          uncertainty associated with these investments.

          EUA BIOTEN recently received a letter of intent from a third party
          which, among other things, would finance the purchase of EUA BIOTEN's
          assets by its management.  In its acceptance of this offer, EUA
          Energy Investment recorded an after-tax charge to its earnings of
          approximately $9.4 million in the second quarter of 1999.  Similarly,
          EUA Energy Investment has received a letter of intent from the
          management of Renova to purchase certain of its assets, which it has
          also accepted.  Based upon the offer amount, EUA Energy Investment
          recorded an after-tax charge to its earnings of approximately $3.5
          million in the second quarter of 1999.

          As of June 28, 1999, the management of EUA Cogenex decided to divest
          certain of the non-core businesses and activities of EUA Cogenex
          including EUA Citizens Conservation Services, Inc, and the EUA DAY
          and DAYMetrix divisions of EUA Cogenex.  EUA Cogenex has accepted an
          offer from the management of the EUA DAY division to purchase the
          business and assets of EUA Day from EUA Cogenex.  As a result of the
          pending sale and the corresponding cessation of continued development
          of DAYMetrix, its energy control software application and related
          technologies division, EUA Cogenex recorded an after-tax charge of
          $2.9 million, based upon the offer price, in the second quarter of
          1999.

Note C -  Commitments and Contingencies:

          Nuclear Ownership Issues

          General:

          Recent actions by the NRC indicate that the NRC has become more
          critical and active in its oversight of nuclear power plants.  EUA is
          unable to predict at this time, what, if any, ramifications these NRC
          actions will have on any of the other nuclear power plants in which
          Montaup has an ownership interest or power contract.

          Millstone 3:

          Montaup has a 4.01% ownership interest in Millstone 3, an 1,154 mw
          nuclear unit that is jointly owned by a number of New England
          utilities, including subsidiaries of Northeast Utilities (Northeast).
          Subsidiaries of Northeast are the lead participants in Millstone 3.
          On March 30, 1996, it was necessary to shut down the unit following
          an engineering evaluation which determined that four safety-related
          valves would not be able to perform their design function during
          certain postulated events.

          In October 1996, the NRC, which had raised numerous issues with
          respect to Millstone 3 and certain of the other nuclear units in
          which Northeast and its subsidiaries, either individually or
          collectively, have the largest ownership shares, informed Northeast
          that it was establishing a Special Projects Office to oversee
          inspection and licensing activities at Millstone.  During the first
          week of July 1998, after the NRC performed an inspection and verified
          that several final technical and programmatic issues were resolved,
          Millstone 3 was restarted, and returned to full power operation on
          July 14, 1998.  The NRC will continue to closely monitor Millstone
          3's performance.

          In August 1997, nine non-operating owners, including Montaup, who
          together own approximately 19.5% of Millstone 3, filed a demand for
          arbitration against Connecticut Light and Power (CL&P) and Western
          Massachusetts Electric Company (WMECO) as well as lawsuits against
          Northeast and its Trustees.  CL&P and WMECO, owners of approximately
          65% of Millstone 3, are Northeast subsidiaries that agreed to be
          responsible for the proper operation of the unit.

          The non-operating owners of Millstone 3 claim that Northeast and its
          subsidiaries failed to comply with NRC regulations, failed to operate
          the facility in accordance with good utility operating practice and
          attempted to conceal their activities from the non-operating owners
          and the NRC.  The arbitration and lawsuits seek to recover costs
          associated with replacement power and operation and maintenance (O&M)
          costs resulting from the shutdown of Millstone 3.  The non-operating
          owners conservatively estimate that their losses exceed $200 million.
          In December 1997, Northeast filed a motion to dismiss the non-
          operating owners' claims, or alternatively to stay the pending
          lawsuit until after the resolution of the arbitration case.  These
          requests were denied in July 1998. In May 1999 Northeast filed a
          request for summary judgement in the arbitration case.  This request
          was denied in July 1999.  In May 1999, all parties entered into a
          Alternative Dispute Resolution Agreement and began mediation sessions
          in an effort to reach a settlement of all issues.  This effort is
          ongoing.

          Montaup paid its share of Millstone 3's O&M expenses during the
          prolonged outage on a reservation of right basis.  The fact that
          Montaup paid these expenses is not an admission of financial
          responsibility for expenses incurred during the outage.

          EUA cannot predict the ultimate outcome of legal proceedings brought
          against CL&P, WMECO and Northeast or the impact they may have on
          Montaup and the EUA system.

          Maine Yankee:

          Montaup has a 4.0% equity ownership in the permanently closed Maine
          Yankee nuclear plant.  Montaup's share of the total estimated costs
          for the permanent shutdown, decommissioning, and recovery of the
          remaining investment in Maine Yankee is approximately $27.4 million
          and is included with Other Liabilities on the Consolidated Balance
          Sheet as of June 30, 1999.  Also, due to recoverability, a regulatory
          asset has been recorded for the same amount and is included with
          Other Assets.

          On November 6, 1997, Maine Yankee submitted an estimate of its costs,
          including recovery of unamortized plant investment (including fuel),
          to FERC reflecting the fact that the plant was no longer operating
          and had entered the decommissioning phase.  On January 14, 1998, the
          FERC accepted the new rates, subject to refund, and amounts of Maine
          Yankee's collections for decommissioning.  On January 19, 1999, Maine
          Yankee and the active intervening parties, including the Secondary
          Purchasers, filed an Offer of Settlement with FERC which was
          supported by FERC trial staff on February 8, 1999.  The FERC approved
          the Settlement effective June 1, 1999.   This agreement constitutes
          full settlement of the issues raised in this proceeding.

          Also, as a result of the shutdown, Montaup and the other equity
          owners were notified by the Secondary Purchasers that they would no
          longer make payments for purchased power to Maine Yankee.   The
          Secondary Purchase Contracts are between the equity owners as a group
          and 30 municipalities throughout New England.  Presently, the equity
          owners are making payments to Maine Yankee to cover the payments that
          would be made by the municipals.

          On November 28, 1997, the Secondary Purchasers sent a Notice of
          Initiation of Arbitration to the equity owners of Maine Yankee, which
          was denied by a Maine judge on April 7, 1998. The judge indicated
          that the jurisdictional question should be first decided by FERC. On
          December 15, 1997, the equity owners as a group filed at FERC a
          Complaint and Petition for Investigation, Contract Modification, and
          Declaratory Order.  A separately negotiated Settlement Agreement
          filed with FERC on February 5, 1999, upon approval, would resolve
          issues raised by the Secondary Purchasers by limiting the amount they
          will pay for decommissioning and settling other points of contention.
          The FERC approved the Settlement effective June 1, 1999.

          The outcome of these recent settlements will not have a material
          effect on EUA's future operating results or financial position.

          On August 4, 1998, the Maine Yankee Board of Directors selected Stone
          & Webster Engineering Corporation to execute a $250 million contract
          for the decommissioning and decontamination of Maine Yankee.  The
          decommissioning plan includes an option for Stone & Webster to
          repower the Maine Yankee site with a gas-fired plant.

          Vermont Yankee:

          Montaup has a 2.5% equity ownership interest in the 540-mw Vermont
          Yankee nuclear unit.  Vermont Yankee has been in negotiations since
          March 1999 with AmerGen Energy Co. for AmerGen to purchase the unit.
          On August 2, 1999, Vermont Yankee announced that it had also received
          an unsolicited expression of interest form Entergy Nuclear, Inc.  to
          buy the unit.  Vermont Yankee has commenced negotiations with Entergy
          and at the same time, is continuing its negotiations with AmerGen.
          Vermont Yankee intends to reach a final agreement to sell the unit by
          October 1, 1999.  This transaction is subject to approvals from the
          NRC, the Securities and Exchange Commission, and the Vermont Public
          Service Board.  Montaup cannot predict the ultimate outcome of these
          negotiations.

          Department of Energy Actions:

          In early 1998, Yankee Atomic, Maine Yankee and Connecticut Yankee,
          individually, as well as a number of other utilities, filed suit in
          federal appeals court seeking a court order to require the Department
          of Energy (DOE) to immediately establish a program for the disposal
          of spent nuclear fuel.  Under the Nuclear Waste Policy Act of 1992,
          the DOE was to provide for the disposal of radioactive wastes and
          spent nuclear fuel starting in 1998 and has collected funds from
          owners of nuclear facilities to do so.  On February 19, 1998, Maine
          Yankee also filed a petition in the U.S. Court of Appeals seeking to
          compel the Department of Energy to remove and dispose of the spent
          fuel at the Maine Yankee site.  Under their Standard Contract, the
          DOE had a deadline for beginning the removal process at all nuclear
          plants on January 31, 1998, which was not met.  On May 5, 1998,
          the Court of Appeals denied several motions brought in the
          proceeding, including several motions for injunctive relief brought
          by the utility petitioners.  In particular, the Court denied the
          requests to require the DOE to immediately establish a program for
          the disposal of spent nuclear fuel.

          Also, Yankee Atomic, Connecticut Yankee, and Maine Yankee filed
          lawsuits against the DOE in the U.S. Court of Federal Claims seeking
          damages of $70 million, $90 million and $128 million, respectively,
          as a result of the DOE's refusal to accept the spent nuclear fuel.

          In late October and early November 1998, the U.S. Court of Federal
          Claims issued rulings with respect to Yankee Atomic, Maine Yankee,
          and Connecticut Yankee finding that the DOE was financially
          responsible for failing to accept spent nuclear fuel.  These rulings
          clear the way for Yankee Atomic, Connecticut Yankee and Maine Yankee
          to pursue at trial their individual damage claims.  These trials are
          expected to begin in early 2000.  Management cannot predict at this
          time the ultimate outcome of these actions.

          Environmental Matters

          EUA recently identified four new sites related to the production of
          manufactured gas at which pre-existing environmental conditions may
          exist. Manufactured gas plants operated at two of the sites, and
          remote gas holders were located at the other two sites.  All four
          sites were built in the 1800's and ceased operations early this
          century.  EUA may have joint and several liability for investigation
          and remediation at these sites, if such actions are necessary.  Three
          sites are associated with Blackstone; a manufactured gas plant was
          located at High Street in Central Falls, and two holders were located
          at Exchange Street in Pawtucket, and Pond Street in Woonsocket, all
          in Rhode Island.  One site pertains to Eastern Edison, a manufactured
          gas plant was located at Rose Street, in Stoughton, Massachusetts.
          EUA is currently conducting a preliminary assessment of the potential
          costs of remediation and therefore, has not yet provided for this
          potential liability.

          Both Blackstone and Eastern Edison are currently recovering certain
          environmental cleanup costs in rates.  In addition, EUA will seek
          recovery of certain costs from its insurance carriers and other
          possible responsible parties.  As a result, EUA does not believe that
          the ultimate impact of the cleanup costs associated with these
          additional environmental sites will be material to the results of
          operations or financial position of EUA and/or its subsidiaries.

Note D -  Financial Information by Business Segments:

          The following provides information on segments.  The Core Electric
          business includes results of the electric utility operations of
          Blackstone, Eastern Edison, Newport and Montaup.

          Energy Related Business includes results of our diversified energy
          related subsidiaries, EUA Cogenex, EUA Ocean State, EUA Energy
          Investment Corporation, EUA Energy Services and EUA
          Telecommunications.

          Corporate results include the operations of EUA Service and EUA
          Parent.  EUA does not have any intersegment revenues.  Financial data
          for the business segments are as follows:

                         Three Months Ended      Six Months Ended
                            June 30, 1999          June 30, 1999
                         Operating  Net         Operating    Net
   (In Thousands)        Revenues  Income       Revenues   Income
   Core Electric         $121,206  $ 7,552      $249,300   $14,323
   Energy Related          12,237     (306)       23,020    (1,334)
   Corporate                    0     (140)            0      (290)
       Subtotal          $133,443  $ 7,106      $272,320   $12,699
   Energy Related
      Asset Adjustments            (15,696)                (15,696)
      Total              $133,443  $(8,590)     $272,320   ($2,997)

                           Three Months Ended     Six Months Ended
                            June 30, 1998            June 30, 1998
                         Operating  Net         Operating Net
        (In Thousands)   Revenues  Income       Revenues  Income
        Core Electric    $113,958  $6,218       $240,548   $18,108
        Energy Related     16,088    (458)        28,804      (886)
        Corporate               0     113              0      (233)
               Total     $130,046  $5,873       $269,352   $16,989


Item 2. Management's Discussion and Analysis of Financial Condition
                     and Results of Operations

     The following is Management's discussion and analysis of certain
significant factors affecting the Company's earnings and financial condition
for the interim periods presented in this Form 10-Q.

Merger Update

     On February 1, 1999, EUA and New England Electric System (NEES) announced
a merger agreement under which NEES will acquire all outstanding shares of EUA
for $31 per share in cash.  The merger agreement, which is subject to the
approval of EUA shareholders and various regulatory agencies, values the equity
of EUA at approximately $634 million, which represents a 23% premium above the
price of EUA shares on December 4, 1998, the last trading day before other
regional merger announcements affected EUA's share price.  EUA shareholders
will continue to receive dividends at the current level, as declared by the
Board of Trustees, until the closing of the merger.  EUA and NEES expect that
the merger will be finalized by early 2000, but are trying to accomplish it
earlier.

     At EUA's Annual Meeting of Shareholders on May 17, 1999, EUA shareholders
voted to approve EUA's merger with NEES.  At the meeting, 97% of the votes
received were in favor of the merger.

     On May 5, 1999, EUA and NEES filed a joint application with the Federal
Energy Regulatory Commission (FERC) seeking FERC approval and related waivers
or authorizations to merge EUA and NEES and to subsequently merge and
consolidate the complimentary operating companies of EUA and NEES.

     On May 20, 1999, EUA and NEES jointly filed a rate consolidation plan with
the Rhode Island Public Utilities Commission reflecting consolidated rates for
each company's Rhode Island subsidiaries, indicating savings to Rhode Island
customers of approximately $79 million.  A similar filing was made for EUA's
and NEES's Massachusetts subsidiaries on April 30, 1999 with the Massachusetts
Department of Telecommunications and Energy indicating savings of over $100
million.

     As part of the merger process, on July 19, 1999, a Voluntary Early
Retirement Program was offered to certain of EUA's and NEES's union and non-
union employees who are least fifty-five years of age.  In addition,
information on the Limited Hardship Early Decision Option (LHEDO) to be offered
in September 1999, the employees' voluntary severance package and relocation
assistance for those employees who qualify have also been announced.

Overview

     EUA had a consolidated net loss of $8.6 million for the quarter ended June
30, 1999 compared to consolidated net earnings of $5.9 million in the second
quarter of 1998.  Net Earnings contributions by Business Unit for the second
quarter of 1999 and 1998 were as follows (in thousands):

                                                                 Increase
                                         1999        1998       (Decrease)
   Core Electric Business              $7,552      $6,218         $1,334
   Energy Related Business              (306)        (458)           152
      Corporate                         (140)         113           (253)
           Subtotal                     7,106       5,873          1,233
      Energy Related
           Asset Adjustments          (15,696)                   (15,696)
           Consolidated               $(8,590)     $5,873       $(14,463)

Energy Related Asset Adjustments

     Second quarter and year-to-date 1999 results include non-recurring after-
tax charges of $15.7 million, or 77 cents per common share, related to the
discontinuance of certain of EUA's energy related activities.  These charges
were consistent with EUA's efforts in evaluating its investments in energy
related projects, and as a result of several pending sales offers for its
interest in certain of these investments.  These non-recurring charges have
settled future uncertainty associated with these investments.

     EUA BIOTEN recently received a letter of intent from a third party which,
among other things, would finance the purchase of EUA BIOTEN's assets by its
management.  As a result, EUA Energy Investment recorded an after-tax charge to
its earnings of approximately $9.4 million in the second quarter of 1999.
Similarly,  EUA Energy Investment has received a letter of intent from the
management of Renova to purchase certain of its assets.   As a result of this
pending sale, EUA Energy Investment recorded an after-tax charge to its
earnings of approximately $3.5 million in the second quarter of 1999.

     As of June 28, 1999, the management of EUA Cogenex decided to divest
certain of the non-core businesses and activities of EUA Cogenex including EUA
Citizens Conservation Services, Inc, and the EUA DAY and DAYMetrix divisions of
EUA Cogenex.  EUA Cogenex has received an offer from the management of the EUA
DAY division to purchase the business and assets of EUA Day from EUA Cogenex.
As a result of the pending sale and the corresponding cessation of continued
development of DAYMetrix, its energy control software application and related
technologies division, EUA Cogenex recorded an after-tax charge of $2.9 million
in the second quarter of 1999.

Earnings by Business Unit

    The earnings contribution of the Core Electric Business Unit increased
approximately $1.3 million in the second quarter of 1999 due primarily to an
adjustment to unbilled revenue in 1998 as a result of restructured rates.

    Net Losses of the Energy Related Business Unit decreased by approximately
$200,000 in the second quarter of 1999 as compared to the same period of a year
ago as a result of decreased operating activity at BIOTEN and Transcapacity.
Effective July 31, 1999, EUA Transcapacity has ceased financial support for
Transcapacity's current operations.

    The decrease in earnings of the Corporate Business Unit in the second
quarter of 1999 was the result of increased legal expenses compared to the same
period of 1998.

    For the six months ended June 30, 1999, EUA had a consolidated net loss of
approximately $3.0 million compared to net earnings of $17.0 million for the
same period of 1998.  Net Earnings contributions by Business Unit for the first
six months of 1999 and 1998 were as follows (in thousands):


                                                              Increase
                                         1999      1998      (Decrease)
   Core Electric Business             $14,323     $18,108     $(3,785)
   Energy Related Business             (1,334)       (886)       (448)
   Corporate                             (290)       (233)        (57)
        Subtotal                       12,699      16,989     $(4,290)
   Energy Related Asset Adjustments   (15,696)                (15,696)
      Consolidated                    $(2,997)    $16,989    $(19,986)

    Net Earnings of the Core Electric Business Unit for the first half of 1999
decreased by approximately $3.8 million as compared to the year-to-date period
of 1998 primarily due to impact of rate reductions in effect  for the full six
month period in 1999 versus four months in 1998.  The earnings impacts of rate
reductions effective with retail access were partially offset by increased
retail kilowatthour sales of 2.8 percent in the year-to-date period, and
accrued revenues pursuant to restructuring settlement agreements.

    Net Losses of the Energy Related Business Unit increased by approximately
$400,000 in the first six months of 1999 as compared to the same period of a
year ago primarily due to increased losses at EUA Cogenex.

    The Corporate Business Unit Net Earnings decreased by approximately $60,000
in the first six months of 1999 compared to the same period in 1998.  Increased
legal expenses in second quarter of 1999 were partially offset by the impact of
a non-recurring general business liability adjustment recorded in the first
quarter of 1998.

Kilowatthour Sales

    Kilowatthour (kWh) sales increased 3.0% in the second quarter of 1999 and
2.8% in the year-to-date period of 1999 as compared to the same periods of
1998, largely the result of warmer weather in 1999, particularly during the
month of June.  These changes were led by 4.2% and 5.5% increases in sales to
residential customers in the second quarter and year-to-date periods,
respectively.

Operating Revenues

    Operating Revenues for the second quarter of 1999 increased by
approximately $3.4 million or 2.6% as compared to the same period of 1998.
Revenues by Business Unit operations were as follows (in thousands):

                                               Three Months Ended June 30,
                                                             Increase
                                   1999      1998           (Decrease)
    Core Electric Business     $121,206    $113,958            $7,248
    Energy Related Business      12,237      16,088            (3,851)
    Corporate                         0           0                 0
        Consolidated           $133,443    $130,046             $3,397

   Core Electric Business revenues increased approximately $7.2 million in the
second quarter of 1999 as compared to the same period of 1998.  Generation-
related revenues increased approximately $6.3 million as a result of the
assignment of entitlements from certain power contracts to third parties and
associated repurchases and sale of energy to satisfy standard offer
requirements.  This increase was compounded by the implementation of increased
wholesale standard offer rates and offset by a reduction in contract
termination charge rates, effective January 1, 1999 and April 1, 1999
respectively.  Distribution-related revenues increased approximately $1.0
million primarily due to the impacts of increased kWh sales for the period.

   Revenues of the Energy Related business unit decreased by approximately $3.9
million in the second quarter of 1999 compared to the same period of 1998.
Energy savings cash project sales of the EUA Cogenex division decreased $3.2
million.  In addition, decreased revenues of the EUA Cogenex partnerships and
EUA Day were partially offset by increased revenues from Citizens that amounted
to an approximate net decrease of  $600,000.

   Operating Revenues for the first six months of 1999 increased by
approximately $3.0 million or 1.1% when compared to the same period of 1998.
Operating Revenues by Business Unit for the first six months of 1999 and 1998
were as follows (in thousands):

                                      Six Months Ended June 30,
                                                           Increase
                                        1999       1998   (Decrease)
      Core Electric Business          $249,300   $240,548    $8,752
      Energy Related Business           23,020     28,804    (5,784)
      Corporate                              0          0         0
          Consolidated                $272,320   $269,352    $2,968

      Core Electric Business revenues increased approximately $8.8 million for
the first six months of 1999 when compared to the same period of 1998.
Generation-related revenues increased approximately $11.1 million as a result
of the aforementioned repurchases of energy.  Offsetting this increase were
full period impacts of rate reductions to Massachusetts retail customers,
pursuant to electric industry restructuring legislations and settlements
effective March 1, 1998.  An additional reduction in wholesale rates resulted
from the implementation of lower contract termination charge rates, offset by
increased standard offer rates.  Distribution-related revenues decreased
approximately $2.4 million due to the net impacts of restructured rates in
Massachusetts for a full period.  This decrease was partially offset by the
impacts of increased kWh sales for the period.

      Revenues of the Energy Related business unit decreased by approximately
$5.8 million in the six months ended June 1999 compared to the same period of
1998.  Energy savings cash project sales, paid from savings, and note and lease
projects sales of the EUA Cogenex division decreased approximately $4.2 million
in aggregate.  In addition, decreased revenues of the EUA Cogenex partnerships
and EUA Day were offset by increased revenues from Citizens, amounting to
approximately $2.2 million. An increase in Renova revenues of approximately
$500,000 further offset this decrease.

  Operations Expense

      Fuel and Purchased Power expenses, in aggregate, increased approximately
$9.8 million, or 19.0% in the second quarter of 1999 as compared to the same
period of 1998.  This increase was primarily due to the aforementioned
assignment of entitlements from certain power contracts which resulted in
repurchases of energy to satisfy standard offer requirements.  This increase
was compounded by a 3.0% increase in kWh sales in the second quarter of 1999.
For the year-to-date period, Fuel and Purchased Power expenses increased
approximately $19.2 million, or 18.1%.  The requirement to satisfy standard
offer needs discussed above, compounded by a 2.8% increase in kWh sales
contributed to this increase.

      Other Operation and Maintenance (O&M) expenses for the three and six
months ended June 30, 1999 decreased approximately $4.9 million or 11.1% and
$5.6 million or 6.5%, respectively, from the same periods in 1998.   Total O&M
expenses are comprised of three components: Direct, Indirect and Energy
Related.

      Direct expenses of the Core and Corporate Business units decreased by
approximately $500,000 in the  second quarter of 1999 and increased
approximately $1.3 million for the year-to-date period of 1999 as compared to
the same periods of 1998.  The second quarter change is primarily due to
decreased pensions and benefits expenses since the sale of Montaup's Somerset
  plant in April 1999.  In the year-to-date period, these decreases were offset
by the impacts of adjustments to 1998 employee incentive plan accruals in the
first quarter of 1999 and non-recurring expense credits related to billings to
Maine utilities for EUA's storm restoration support in February of 1998, which
aggregated approximately $2.3 million.

      Indirect expenses, items over which there is limited short-term control
or items which are fully recovered in rates, decreased approximately $1.0
million in the second quarter and $3.2 million in the year-to-date period as
compared to the same periods of 1998.  Conservation and load management (C&LM)
expenses decreased approximately $400,000 and $900,000 in the respective
periods.  In addition, jointly-owned units expenses decreased approximately
$400,000 and $2.5 million, respectively, largely due to decreased expenses of
Canal 2 of $2.1 million and $3.6 million, respectively, after the sale of the
unit in December 1998, which were offset by increased expenses of $1.7 million
and $1.2 million in the second quarter and year-to-date periods, respectively,
of the Millstone and Seabrook units due to the timing of their scheduled
maintenance outages.

      Expenses of the Energy Related Business Unit decreased approximately $3.4
million in the second quarter of 1999 and $3.7 million for the year-to-date
period of 1999, as compared to the same periods of 1998.  These changes are due
to decreased expenses as a result of decreased operating activity of the
Cogenex division, EUA Day and the Cogenex Partnerships aggregating
approximately $4.4 million in both the second quarter and year-to-date periods
of 1999.  These changes were offset by increased expenses at EUA Citizens and
Cogenex West aggregating approximately $900,000 for the second quarter and
$700,000 for the year-to-date period as compared to the same periods of 1998.

Depreciation and Amortization Expense

      Depreciation and Amortization expense decreased approximately $2.4
million or 18.3% in the second quarter and $2.5 million or 9.7% in the six
months period ended June 30, 1999 when compared to the same periods of last
year.  These decreases were due largely to decreased depreciable property,
particularly after the sale of Montaup's 50% ownership of the Canal Unit 2
  generating station in December of 1998 and the sale of the Somerset
Generating Station in April of 1999, and decreased depreciation at EUA Cogenex.

Taxes - Other Than Income

      Taxes - Other Than Income decreased approximately $1.0 million or 17.1%
in the second quarter of 1999 and approximately $600,000 or 5.0% in the year-
to-date period of 1999 as compared to the same periods of 1998 as a result of
decreased property taxes after the sale of Montaup's Somerset Generating
Station in April of 1999 and Montaup's 50% ownership of the Canal Unit 2
Generating Station in December of 1998.

Income Taxes

      EUA's effective income tax rate for the six months ended June 30, 1999
was approximately 41.0% compared to 40.7% for the same period of 1998.  This
increase reflects the impact of accelerated reversal of timing differences
pursuant to restructuring settlement agreements.

Other Income and (Deductions) - Net

      Other Income and (Deductions) - Net was relatively unchanged in this
year's second quarter and increased by approximately $400,000 in the year-to-
date period as compared to same periods of 1998.   In both periods, the net
impact of the release of investment tax credits associated with the sale
of Montaup's Somerset Generating Station in April of 1999, were partially
offset by decreased interest income from EUA Cogenex.

  Net Interest Charges

      Net Interest charges decreased by approximately $900,000 or 9.6% in the
second quarter of 1999 and $2.0 million or 10.9% in the year-to-date period as
compared to the respective periods of 1998.  Interest on long term debt
decreased as a result of normal cash sinking fund payments and the maturities
of Eastern Edison's $20 million First Mortgage Bonds in May of 1998 and $40
million First Mortgage Bonds in July of 1998.

  Liquidity and Sources of Capital

      The EUA System's need for permanent capital is primarily related to
investments in facilities required to meet the needs of its existing and future
customers.

      Traditionally, cash construction requirements not met with internally
generated funds are obtained through short-term borrowings which are ultimately
funded with permanent capital.  In July 1997, several EUA System companies
entered into a three-year revolving credit agreement allowing for borrowings in
aggregate of up to $145 million from all sources of short-term credit.  As of
June 30, 1999, various financial institutions have committed up to $75 million
under the revolving credit facility.  In addition to the $75 million available
under the revolving credit facility, EUA System companies maintain short-term
lines of credit with various banks totaling $90 million for an aggregate amount
available of $165 million.  Outstanding short-term debt at June 30, 1999 and
  December 31, 1998 by Business Unit was as follows (in thousands):

                                   June 30, 1999  December 31, 1998

      Core Electric Business           $3,830         $2,220
      Energy Related Business          16,592         19,354
      Corporate                        31,050         42,000
          Consolidated                $51,472        $63,574

      In April 1999, Montaup completed the sale of its Somerset Station to NRG
Energy Inc. for approximately $55 million.  In July 1999, Montaup used the
proceeds from this sale to redeem $30 million of its debenture bonds and $24.8
million, or 164,600 shares, of its outstanding $100 par value common stock.
Eastern Edison used these proceeds along with a capital contribution from EUA
of $40 million to redeem $40 million of 8%, $40 million of 6 7/8%, and $8
million of 6.35% First Mortgage and Collateral Trust Bonds.

      For the six months ended June 30, 1999 internally generated funds
available after the payment of dividends amounted to approximately $68.8
million while the EUA System's cash construction requirements amounted to
approximately $27.7 million for the same period.  Various laws, regulations and
contract provisions limit the use of EUA's internally generated funds such that
the funds generated by one subsidiary are not generally available to fund the
operations of another subsidiary.

      In July 1999, EUA filed an application under the Public Utility Holding
Company Act with the Securities and Exchange Commission requesting
authorization for Eastern Edison to transfer all of Eastern Edison's investment
in Montaup's capitalization, including Montaup's preferred stock, common stock
and debenture bonds, to EUA.  Montaup would then become a wholly-owned
subsidiary of EUA.

      EUA Cogenex was in compliance with provisions of the original interest
coverage covenant contained in certain of its unsecured note agreements at June
30, 1999.  EUA Cogenex was not in compliance with this covenant at March 31,
1999, however, EUA Cogenex had reached agreements with lenders to modify the
interest coverage covenant contained in these note agreements and to waive the
default.

  Electric Utility Industry Restructuring

      Legislation enacted in  Rhode Island in 1996 and Massachusetts in 1997
along with approved electric utility industry restructuring settlement
agreements in both states and at the federal level, granted EUA's Rhode Island
and Massachusetts electric customers with choice of electricity supplier and
rate reductions commencing January 1, 1998 and March 1, 1998, respectively.
Until a customer chooses an alternative supplier, that customer will receive
standard offer service from the retail distribution company.  Blackstone and
Newport are required to arrange for standard offer service through December 31,
2009 and Eastern Edison must arrange for this service through February 28,
2005.  Under the approved settlement agreements, Montaup had guaranteed
standard offer supply at a fixed price schedule for the duration of the
standard offer periods and Blackstone, Newport and Eastern Edison agreed to
subject their standard offer requirements to a competitive bidding process in
which competitive suppliers would bid against the guaranteed price.  Through
its successful divestiture process, combined with a competitive bidding process
conducted in late 1998, Montaup has assigned 100% of its standard offer
obligation.  A majority of this standard offer assignment became effective
January 1, 1999 with the remainder to be effective with the closing of the
transfer of power purchase agreements to Constellation Power Source Inc.
(Constellation), see Generation Divestiture below.  The guaranteed standard
offer price will increase over time to encourage customers to leave standard
offer service and enter the competitive power supply market.

      Provisions of the approved settlement agreements also allowed Montaup to
replace its all-requirements wholesale contracts with its affiliated retail
distribution companies with a contract termination charge (CTC) which permits
Montaup to recover, among other things, its above market investments and
commitments in generation assets along with an 80% ratepayer/20% shareholder
sharing mechanism for ongoing nuclear generation operations.  Montaup began
billing the CTC coincident with retail access and the distribution companies
are recovering the CTC through a non-bypassable transition charge to all of
their distribution customers.

      As part of the approved settlement agreements, Montaup agreed to divest
its entire generation portfolio.  The net proceeds of the sale, as defined in
the settlement agreements, will be used to mitigate Montaup's CTC to its retail
affiliates via a Residual Value Credit (RVC).  The RVC reduces the fixed
component of the CTC by an amount equal to the net proceeds, with a return,
over the period commencing on the date the RVC is implemented through December
31, 2009.  Effective April 1, 1999, subject to dispute resolution procedures
pursuant to restructuring settlement agreements, Montaup reduced its CTC to its
retail subsidiaries to reflect the RVC and other adjustments.  Montaup lowered
its CTC from 3.04 cents per kWh to 2.10 cents per kWh for Eastern Edison and
from 3.0 cents per kWh to 2.04 cents per kWh and 2.06 cents per kWh in the case
of Blackstone and Newport, respectively. Retail transition charge decreases to
reflect these changes were authorized by respective state regulatory bodies
effective April 1, 1999 for Eastern Edison and May 1, 1999 for Blackstone  and
Newport.

      Effective January 1, 1999 the standard offer service rate for Blackstone
and Newport customers was increased from an average 3.2 cents per kilowatthour
to an average 3.5 cents per kilowatthour.  Coincident with the May 1, 1999
reduction in Blackstone's and Newport's retail transition charge, the standard
offer rate was changed to a flat rate of 3.5 cents per kilowatthour for
all customer classes.

      The standard offer service rate for Eastern Edison customers was
increased to a flat rate of 3.1 cents per kilowatthour effective January 1,
1999. This rate was further increased to 3.5 cents per kilowatthour coincident
with the Eastern Edison retail transition charge decrease effective April 1,
1999.

Generation Divestiture

   By the end of 1998, pursuant to settlement agreements approved by federal
and state regulators, Montaup has signed agreements to sell all of its non-
nuclear power generation assets and power purchase agreements to various non-
affiliated parties in connection with electric utility restructuring undertaken
in Massachusetts and Rhode Island.  At the end of 1998, Montaup sold several
diesel-powered generating units (totaling approximately 16 mw) owned by Newport
to Illinois-based Wabash Power Equipment Company and its 50% share
(approximately 280 mw) of Unit 2 of the Canal generating station in Sandwich,
Massachusetts to Southern Energy Canal, LLC an indirect subsidiary of The
Southern Company, for approximately $75 million.  On April 7, 1998, Montaup
entered into an agreement to transfer power purchase contracts for
approximately 170 mw of output from Ocean State Power I and Ocean State Power
II to TransCanada Power Marketing Ltd., an indirect subsidiary of TransCanada
Pipelines Limited; the transfer was effective June 1, 1999.  On December 21,
1998, Montaup entered into an agreement to transfer purchase power contracts
totaling approximately 177 mw to Constellation Power Source, Inc., a wholly-
owned affiliate of the Baltimore Gas and Electric Company; the transfer will
become effective on September 1, 1999.  On April 26, 1999, Montaup completed
the sale of its 170 mw Somerset Generating Station, located in Somerset,
Massachusetts, to Somerset Power, LLC, a direct subsidiary of NRG, Inc., for
approximately $55 million.  As a result of the sale, a regulatory asset has
been recorded and is included in Other Assets, and a regulatory liability has
been recorded and is included in Other Liabilities on the Consolidated Balance
Sheet.  In June of 1999, Montaup completed the sale of its and Newport's
combined 2.6% (approximately 16 mw) share of the W.F. Wyman Unit 4 in Yarmouth,
Maine to FPL Energy Wyman IV LLC, an indirect subsidiary of the Florida-based
FPL Group, Inc for $2.4 million.  Also in June of 1999, Blackstone sold its
hydroelectric facility in Pawtucket, Rhode Island (approximately 1 mw) to
Putnam Hydropower LLC, an affiliate of Pawtucket Hydropower Inc.

   In July 1999, in connection with Entergy Nuclear Generation Company's
acquisition of Pilgrim Station from Boston, Edison, Montaup bought out its
power purchase agreement (approximately 73 mw) with Boston Edison.  As a
condition of the buy-out, Montaup entered into a reduced term power purchase
contract for Pilgrim Station power with Entergy Nuclear Generation Company.

   Montaup also has agreed to sell its ownership interest in the Seabrook
Station nuclear power plant to Great Bay Power Corporation, a subsidiary of
BayCorp Holdings, Ltd., with an expected closing later in 1999.  EUA's
remaining generating capacity comprises 58 mw from its ownership shares of the
Millstone 3 and Vermont Yankee nuclear facilities.  EUA is in negotiations to
sell and/or transfer its interests in the Vermont Yankee facility, (see "Note C
- Commitments and Contingencies: Nuclear Ownership Issues") and ultimately
intends to sell and/or transfer its interests in Millstone 3 as well.  All of
the sale and contract transfer agreements are subject to federal and/or state
regulatory approvals, including that of the NRC with respect to the sale of
nuclear units.

     The Year 2000 Issue

   EUA has reached a notable milestone with its Year 2000 Program (Program).
On June 30, 1999, EUA reported to the North American Electric Reliability
Council (NERC) that all of its mission critical systems were Year 2000 ready,
consistent with the recommended industry schedule published by NERC.  The
Program addressed the potential impact on computer systems and embedded systems
and components resulting from a common software program code convention that
utilized two digits instead of four to represent a year.  If  not addressed,
the year 2000 could have been systemically recognized as the year 1900, causing
system or equipment failures or malfunctions, and ultimately resulting in
disruptions to Company operations.  This disclosure constitutes a Year 2000
Statement and Readiness Disclosure.  It is subject to the protections afforded
  it as such by the Year 2000 Information and Readiness Disclosure Act of 1998.

  EUA's State of Readiness:

   To address potential Year 2000 issues, EUA divided the focus of its Year
2000 Program into three major categories of business activity: the generation
and delivery of electricity to customers, the acquisition of goods and services
(including purchased power), and ongoing general and administrative activities
related to the corporate infrastructure and support functions, which included
  among other things, billings and collections.

   Based on work completed as of December 31, 1998, the following types and
quantities of date sensitive IT systems were identified and remediated:

   >    Central Applications: 54 date sensitive items consisting of centralized
        computing software that addressed major business and operational needs
        were identified; 67% required repair or replacement.

   >    Server Based Networks: 22 date sensitive items consisting of networked
        applications, as well as supporting computing and communications
        equipment were identified; 55% required repair or replacement.

   >    Desktops: 48 categories of items typically consisting of personal
        computer hardware and software were identified; 52% of such categories
        required repair or replacement.

   >    Infrastructure: 44 items consisting of components of central IT
        operations (e.g., the mainframe computer, its operating system and
        centralized database) were identified; 57% required repair or
        replacement.

   >    Embedded Systems and Components: 3,977 items were identified; 96.3%
        were year 2000 ready or inert. 3.7% were tested -- none failed.

   EUA utilized a four phase approach to address information technology (IT)
issues.  The four phases were: Analysis, Remediation, Unit Testing and
Integration Testing.  The Analysis phase consisted of two stages. The first
stage consisted of conducting an inventory of all products, applications and
systems, department by department.  The second stage consisted of an assessment
of the risk (potential impact and likelihood of failure) of each item
identified in the inventory. Items identified as not being Year 2000 ready were
repaired or replaced during the Remediation phase. The Unit Testing phase
involved testing at the module, program and application level to assure that
each such item functioned properly after repair or replacement.  Finally, in
the Integration Testing phase, dates were moved ahead, data were aged, and all
date conditions pertinent to each application or product were tested "end-to-
end" to assure that each item was tested in its final complete environment.  As
of June 30, 1999, each phase described above was 100% completed and all mission
critical systems were Year 2000 ready.  All mission critical non-information
services systems (i.e., embedded systems and components) were also 100% Year
2000 ready as of that date as well.

   EUA developed a process to identify and assess the Year 2000 readiness of
third parties with which it had a material relationship.  First, a list of all
vendors utilized over the prior two years was developed from the accounts
payable system.  Sub-lists were then developed and distributed to departments
based on the departmental allocation of charges for goods and services.
Departmental managements worked with the purchasing department to rank vendors
identified as being critical or important.

   All vendors, regardless of rank, were contacted in writing requesting
information regarding their Year 2000 status.  Vendors ranked as critical or
important were selected for additional inquiry, in the form of additional
written inquiry and telephone inquiries.  If available, vendor literature,
regulatory filings and web sites were also reviewed.  Critical vendors included
providers of a variety of goods and services, such as telecommunications,
banking and other financial services, computer products and services,
equipment, fuel and mail delivery.  As a result of this process, the purchasing
department and/or the department(s) utilizing the goods or services in
question have been able to confirm to their satisfaction that all mission
critical vendors and a significant majority of the important vendors have
provided adequate evidence of their Year 2000 readiness.  All remaining
vendors are being monitored as the process of gathering their Year 2000
readiness information continues.  This process was essentially complete on June
30, 1999.  Contingency plans have been developed for services provided by all
mission critical vendors.  These plans identify workarounds for any mission
critical vendor for which there is not an alternative source.

  Costs to Address EUA's Year 2000 Issues:

   Through June 30, 1999, EUA has incurred costs of approximately $6.4 million
to address Year 2000 issues, including approximately $3.9 million of non-
incremental labor, $1.2 million of capital expenditures and $1.3 million of
consulting and other costs.  The company estimates it will incur additional
costs approximating $3.6 million during the period July 1, 1999 through March
31, 2000, to complete its Year 2000 Program including approximately $2.5
million of non-incremental labor, $500,000 of capital expenditures and $600,000
of consulting and other costs.

  Risks of EUA's Year 2000 Issues:

   EUA's first priority continues to be the minimization of any potential
disruptions to electric service as a result of the Year 2000.  The provision of
electric service depends in large part on the viability of the New England
power grid which is managed by ISO/NEPOOL.  EUA is actively participating on
ISO/NEPOOL's Year 2000 operating and oversight committees.  EUA's assessment
of its own transmission and distribution equipment and facilities indicated
that the risk of failure of this equipment does not appear to be significant.
However, due to the interconnectivity to the New England power grid, and the
reliance on many other entities also connected to the grid, it is not possible
to conclude with certainty that there will be no significant interruptions in
service.

   In addition, dependable voice and data telecommunications are critical to
EUA's ongoing operations.  EUA's internal telecommunication systems were Year
2000 ready as of  June 30, 1999.  EUA also relies heavily on external
telecommunication systems, i.e., the local and regional telephone systems, and
has identified these providers as critical vendors.  EUA has gathered extensive
documentation regarding the Year 2000 efforts and status of the regional
telephone companies upon which it relies.  In addition, EUA has also had face-
to-face meetings with representatives of these companies and attended public
conferences sponsored by these companies, at which they have described their
Year 2000 process and progress.  Each of these companies anticipates being Year
2000 ready and devoid of major system failures.  Nevertheless, EUA has provided
for several methods for maintaining adequate communications.  For example, if
the regional, land-line telephone systems were not in service, EUA could rely
on mobile or cellular telephones.  If those failed, EUA maintains mobile
radios.  Further, all of EUA's operating locations, including EUA Service
Corporation's, are linked through a captive microwave telecommunications
system.

   No other significant reasonably likely failure scenarios stemming solely
from problems relating to Year 2000 have been identified thus far.
Accordingly, EUA does not currently believe that any Year 2000 related risks in
and of themselves constitute reasonably likely worst case scenarios.  Rather,
EUA's most reasonably likely Year 2000 related worst case scenario would be the
occurrence of isolated year 2000 failures such as described above in
conjunction with a severe winter storm. However, EUA believes that such year
2000 failures would not likely affect whether the storm event would have a
material impact on EUA's business or financial condition.  In this context, and
  based on its communications with key vendors and customers and its long
experience with storm events, EUA does not currently anticipate significant
adverse effects on its relationships with its customers or vendors, or any
resulting material adverse effects on its business or operations.

  Year 2000 Contingency Plans:

   Contingency planning teams consisting of managers and employees experienced
in system reliability, disaster recovery and risk were established and made
responsible for developing contingency plans. The overall strategy was to
identify Year 2000 risks, both internal and external to EUA, that could have a
material impact on EUA's operations or financial well being.  For such risks,
formal, written contingency plans were created.  Preliminary plans were
developed in March, 1999 and final contingency plans were in place and ready to
implement as of June 30, 1999.

   In addition to the contingency plans described above which are designed to
ensure a rapid recovery from any Year 2000 related failures, EUA has also
developed a formal, written Implementation Plan. The purpose of this plan is to
ensure that the activities necessary to maintain a clean systems environment
from July 1, 1999 through the transition weekend and into the year 2000 are
properly planned for, appropriately communicated throughout the company, and
understood by those responsible for performing the various tasks.  The
Implementation Plan was completed and in place as of June 30, 1999.

  Summary:

   The amount of effort and resources necessary to address Year 2000 issues and
make EUA Year 2000 ready has been significant. There are currently dedicated
teams in place, guided by a formal implementation plan, to ensure EUA remains
Year 2000 ready through the remainder of 1999 and into the next century. EUA's
Year 2000 program has consistently been on schedule and in accordance with
timetables and progress points published by the North American Electric
Reliability Council (NERC). This effort culminated with the June 30, 1999
reporting to NERC that EUA had achieved 100% Year 2000 readiness for all
mission critical systems and embedded components.  EUA has utilized
independent, outside technical consultants and other experts to review and
assess its Year 2000 efforts and status throughout the project.  Their findings
have validated the progress and status of the company's Year 2000 project and
the achievement of Year 2000 readiness.  Management is confident that EUA's
Year 2000 project has been, and continues to be,  well managed with the
appropriate resources and plans in place to ensure the Company remains Year
2000 ready and  positioned for a successful transition to the Year 2000.

  Other

   EUA occasionally makes forward-looking projections of expected future
performance or statements of our plans and objectives.  These forward-looking
statements may be contained in filings with the SEC, press releases and oral
statements. This report contains information about the Company's future
business prospects including, without limitation, statements about the
potential impact of Year 2000 issues on the Company's financial condition or
results.  These statements are considered "forward-looking" within the meaning
of the Private Securities Litigation Reform Act.  These statements are based on
the Company's current plans and expectations and involve risks and
  uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the forward-
looking statements.  The Company expressly undertakes no duty to update any
forward-looking statement.


PART II - OTHER INFORMATION

  Item 1. Legal Proceedings

   See "Note C - Commitments and Contingencies: Nuclear Ownership Issues" for a
discussion of pending legal actions involving several of the nuclear plants in
which Montaup has an ownership interest.

  Item 4.   Submission of Matters to a Vote of Security Holders

        (a)  The Company's Annual Meeting of Shareholders was held on May 17,
             1999.

        (b)  The Board of Trustees as previously reported to the Securities and
             Exchange Commission was re-elected in its entirety.

        (c)  The Common Shareholders voted at the Annual Meeting to adopt the
             Agreement and Plan of Merger dated February 1, 1999 by and among
             EUA and New England Electric System, by 15,572,236 votes in favor
             and to elect eleven Trustees of the Company, each to hold office
             until the next meeting of the Shareholders and until a successor
             has been chosen and qualified.  The voting results on the approval
             of the merger with NEES were as follows:

   VOTES           VOTES        BROKER
   FOR             AGAINST      ABSTENTIONS       NON-VOTES
   15,572,236      380,311        91,179          2,233,903

  Item 5.               Other Information

   NEPOOL is a voluntary organization open to any person engaged in the
electric business such as investor-owned utilities, municipals, cooperative
utilities, power marketers, brokers and load aggregators. On December 31, 1996,
NEPOOL, on behalf of its participants, filed a restructuring proposal with
FERC. The NEPOOL restructuring proposal was the product of over two years of
intense discussions, deliberations and negotiations among the over 130 NEPOOL
member participants and many non-participants, including New England state
regulators. The key elements of the restructuring proposal were the
implementation of a regional NEPOOL Open Access Transmission Tariff (NEPOOL
Tariff), the creation of an Independent System Operator (ISO), and the
restatement of the NEPOOL Agreement to establish a broader governance
structure for NEPOOL and to develop a more open competitive market structure.

   The NEPOOL Tariff, which became effective on March 1, 1997, ensures non-
discriminatory open access to the regional transmission network by providing a
single rate for all transactions that utilize NEPOOL's bulk power transmission
facilities. The NEPOOL Tariff promotes competition in the New England power
market through its single transmission rate structure.  All regional service
within NEPOOL, except for wheeling through or out, is to be provided as a
network service.

   On June 25, 1997, FERC issued an order conditionally authorizing the
establishment of an ISO by NEPOOL effective July 1, 1997, affirming that the
transfer of control of transmission facilities owned by the public utility
members of NEPOOL to the ISO is consistent with the public interest under
Section 203 of the Federal Power Act.

   On April 20, 1998, FERC accepted the NEPOOL Tariff conditional on NEPOOL's
compliance with a number of issues raised by FERC.  On July 22, 1998, NEPOOL
made its compliance filing at FERC.  The NEPOOL Tariff changes and amendments
to the Restated NEPOOL Agreement included in the filing effected compliance
with the Commission's April 20, 1998 Order.  While there were a large number of
changes in the filing, the principal areas of change relate to the addition in
the NEPOOL Tariff of a separately available Internal Point to Point Service,
the addition of a mechanism to allocate costs to update the regional
transmission system, and the replacement of a Non-Use Charge with an In-Service
Charge across interconnections.  A settlement agreement was filed on April 7,
1999 and an order accepting the settlement was received on July 30, 1999 with a
compliance filing due in sixty days.

   To give market participants more choice and to foster competition, the
restructured NEPOOL proposes the unbundling of electric service in the NEPOOL
control area. The restructured NEPOOL calls for the development of competitive
wholesale markets for installed capability, operable capability, energy,
automatic generation control, and reserves. These wholesale products will be
market-priced based on bid clearing pricing rather than the current cost-
based pricing. Market participants will be able to meet their responsibility
for these products by buying or selling these various services through
bilateral transactions or through the regional power exchange that will be
administered through the ISO. On October 29, 1997, FERC issued an order
permitting implementation of the installed capability market, which occurred in
April of 1998.  On April 6, 1999, FERC issued an order approving market rules
and on May 1, 1999, the remaining markets - operable capability, energy,
automatic generation control and the reserve markets - were implemented.

   In general, the EUA System companies support the changes to NEPOOL because
much of the cross-subsidies for sharing costs will be eliminated.  These
changes will have an impact on the Company's operating revenues and costs as
NEPOOL transitions from a cost-based to a bid-based system.

   See "Note C - Commitments and Contingencies: Environmental Matters" for a
discussion of newly identified sites where EUA could be joint and severally
responsible for environmental cleanup costs.

  Item 6.    Exhibits and Reports on Form 8-K

       (a)   Exhibits - None.

       (b)   Reports Form 8-K - None.


                           SIGNATURES

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


                                      Eastern Utilities Associates
                                           (Registrant)



  Date:  August 13, 1999               /s/ Clifford J. Hebert, Jr.
                                      Clifford J. Hebert, Jr., Treasurer
                                      (on behalf of the Registrant and
                                      as Principal Financial Officer)