<PAGE 1>

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                         Washington, D. C. 20549-1004

                                   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 September 30, 1997

                                      OR

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

       For the transition period from _______________ to _______________

                         Commission file number 2-7909

                       CAMBRIDGE ELECTRIC LIGHT COMPANY          
            (Exact name of registrant as specified in its charter)

         Massachusetts                                    04-1144610    
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                        Identification No.)

One Main Street, Cambridge, Massachusetts                 02142-9150
(Address of principal executive offices)                  (Zip Code)

                                (617) 225-4000                  
             (Registrant's telephone number, including area code)

                                                                       
  (Former name, address and fiscal year, if changed since last report.)

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 practicable date.

                                               Outstanding at
           Class of Common Stock               November 1, 1997 
        Common Stock, $25 par value            346,600 shares

The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q as a wholly-owned subsidiary and is therefore filing this
Form with the reduced disclosure format.
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                        PART I - FINANCIAL INFORMATION


Item 1.  Financial Statements


                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                           CONDENSED BALANCE SHEETS

                   SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

                                    ASSETS

                            (Dollars in thousands)



                                                 September 30,   December 31,
                                                     1997            1996    
                                                  (Unaudited)

PROPERTY, PLANT AND EQUIPMENT, at original cost    $162 452        $161 331
  Less - Accumulated depreciation                    63 337          61 499
                                                     99 115          99 832
  Add - Construction work in progress                   940             546
                                                    100 055         100 378

INVESTMENTS
  Equity in nuclear electric power companies         10 152           9 403
  Other                                                   5               5
                                                     10 157           9 408

CURRENT ASSETS
  Cash                                                  890             143
  Accounts receivable
    Affiliates                                          755           1 452
    Customers                                        12 079          11 285
  Unbilled revenues                                   3 359           2 751
  Prepaid taxes -
    Income                                            1 175             968
    Property                                          2 580           1 704
  Inventories and other                               2 178           2 023
                                                     23 016          20 326

DEFERRED CHARGES
  Regulatory Assets                                  73 954          42 781
  Other                                               2 047           2 258
                                                     76 001          45 039

                                                   $209 229        $175 151
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                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                           CONDENSED BALANCE SHEETS

                   SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

                        CAPITALIZATION AND LIABILITIES

                            (Dollars in thousands)


                                                  September 30,  December 31,
                                                      1997           1996    
                                                  (Unaudited)
CAPITALIZATION
  Common Equity -
    Common stock, $25 par value -
      Authorized and outstanding -
        346,600 shares, wholly-owned by
        Commonwealth Energy System (Parent)        $  8 665        $  8 665
    Amounts paid in excess of par value              27 953          27 953
    Retained earnings                                11 226           9 233
                                                     47 844          45 851
  Long-term debt, including premiums, less
    maturing debt and current sinking fund
    requirements                                     17 402          17 503
                                                     65 246          63 354
CURRENT LIABILITIES
  Interim Financing -
    Notes payable to banks                           19 375          18 725
    Advances from affiliates                          7 895           5 065
    Maturing long-term debt                             -             4 260
                                                     27 270          28 050

  Other Current Liabilities -
    Current sinking fund requirements                   100             100
    Accounts payable
      Affiliates                                      5 168           4 429
      Other                                           5 679           8 216
    Accrued local property and other taxes            3 455           1 705
    Accrued interest                                    196             475
    Other                                             5 608           3 738
                                                     20 206          18 663
                                                     47 476          46 713
DEFERRED CREDITS
  Accumulated deferred income taxes                  14 846          14 355
  Yankee Atomic purchased power contract              2 694           3 466
  Connecticut Yankee purchased power contract        30 021          35 879
  Maine Yankee purchased power contract              37 596             -  
  Unamortized investment tax credits and other       11 350          11 384
                                                     96 507          65 084
COMMITMENTS AND CONTINGENCIES

                                                   $209 229        $175 151

                            See accompanying notes.
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                       CAMBRIDGE ELECTRIC LIGHT COMPANY

             CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                            (Dollars in thousands)
                                  (Unaudited)



                                    Three Months Ended     Nine Months Ended
                                      1997      1996        1997      1996

ELECTRIC OPERATING REVENUES          $35 721   $33 229     $98 834   $90 984

OPERATING EXPENSES
  Electricity purchased for resale,
    transmission and fuel             23 388    21 750      66 250    59 261
  Other operation and maintenance      6 547     5 214      21 158    17 175
  Depreciation                         1 119     1 086       3 357     3 258
  Taxes -
    Income                             1 181     1 370       1 317     2 641
    Local property                       776       785       2 310     2 286
    Payroll and other                    242       178         706       643
                                      33 253    30 383      95 098    85 264

OPERATING INCOME                       2 468     2 846       3 736     5 720

OTHER INCOME                             335       420       1 360     2 032

INCOME BEFORE INTEREST CHARGES         2 803     3 266       5 096     7 752

INTEREST CHARGES
  Long-term debt                         362       431       1 199     1 809
  Other interest charges                 474       412       1 338       950
  Allowance for borrowed funds
    used during construction             (13)      (12)        (23)      (49)
                                         823       831       2 514     2 710

NET INCOME                             1 980     2 435       2 582     5 042

RETAINED EARNINGS -
  Beginning of period                  9 246     8 522       9 233     7 561
  Dividends on common stock              -         -          (589)   (1 646)

RETAINED EARNINGS -
  End of period                      $11 226   $ 8 522     $11 226   $10 957






                            See accompanying notes.
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                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                      CONDENSED STATEMENTS OF CASH FLOWS

             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                            (Dollars in thousands)
                                  (Unaudited)



                                                        1997         1996

CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                           $ 2 582     $ 5 042
  Effects of noncash items -
    Depreciation and amortization                        3 357       3 258
    Deferred income taxes and investment tax
      credits, net                                        (446)         92
    Earnings from corporate joint ventures                (884)       (908)
  Dividends from corporate joint ventures                  135         617
  Change in working capital, exclusive of cash and
    interim financing                                     (400)        468
  All other operating items                                988      (2 392)
Net cash provided by operating activities                5 332       6 177

CASH FLOWS FOR INVESTING ACTIVITIES
  Additions to property, plant and equipment
    (exclusive of AFUDC)                                (3 092)     (2 850)
  Allowance for borrowed funds used during
    construction                                           (23)        (49)
Net cash used for investing activities                  (3 115)     (2 899)

CASH FLOWS FROM FINANCING ACTIVITIES
  Payment of dividends                                    (589)     (1 646)
  Proceeds from short-term borrowings                      650      15 775
  Advances from affiliates                               2 830       3 185
  Long-term debt issues refunded                        (4 260)    (20 000)
  Sinking funds payments                                  (101)       (102)
Net cash used for financing activities                  (1 470)     (2 788)

Net increase (decrease) in cash                            747         490
Cash at beginning of period                                143         239
Cash at end of period                                  $   890     $   729


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest (net of capitalized amounts)              $ 2 770     $ 3 216
    Income taxes                                       $ 1 122     $ 3 049





                            See accompanying notes.
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                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

(1)   General Information

      Cambridge Electric Light Company (the Company) is a wholly-owned subsid-
  iary of Commonwealth Energy System.  The parent company is referred to in
  this report as the "System" and together with its subsidiaries is collec-
  tively referred to as "the system."  The System is an exempt public utility
  holding company under the provisions of the Public Utility Holding Company
  Act of 1935 and, in addition to its investment in the Company, has interests
  in other utility and several nonregulated companies.

      The Company has 142 regular employees including 106 (75%) represented by
  a collective bargaining unit.  The existing collective bargaining agreement
  remains in effect until September 1, 1998.  Employee relations have
  generally been satisfactory.

      During the second quarter of 1997, the system initiated a voluntary
  personnel reduction program.  For additional information, see the "Personnel
  Reduction Program" section under Management's Discussion and Analysis of
  Results of Operations.

(2)   Significant Accounting Policies

      (a) Principles of Accounting

      The Company's significant accounting policies are described in Note 2 of
  Notes to Financial Statements included in its 1996 Annual Report on
  Form 10-K filed with the Securities and Exchange Commission.  For interim
  reporting purposes, the Company follows these same basic accounting policies
  but considers each interim period as an integral part of an annual period
  and makes allocations of certain expenses to interim periods based upon
  estimates of such expenses for the year.

      The unaudited financial statements for the periods ended September 30,
  1997 and 1996 reflect, in the opinion of the Company, all adjustments
  (consisting of only normal recurring accruals, except for those described in
  the "Personnel Reduction Program" section under Management's Discussion and
  Analysis of Results of Operations) necessary to summarize fairly the results
  for such periods.  In addition, certain prior period amounts are
  reclassified from time to time to conform with the presentation used in the
  current period's financial statements.

      Income tax expense is recorded using the statutory rates in effect
  applied to book income subject to tax recorded in the interim period.

      The results for interim periods are not necessarily indicative of
  results for the entire year because of seasonal variations in the consump-
  tion of energy and the accrual of the costs associated with the Personnel
  Reduction Program referred to above.

      (b) Regulatory Assets and Liabilities

      The Company is regulated as to rates, accounting and other matters by
  various authorities including the Federal Energy Regulatory Commission
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<PAGE 7>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

  (FERC) and the Massachusetts Department of Public Utilities (DPU).

      Based on the current regulatory framework, the Company accounts for the
  economic effects of regulation in accordance with the provisions of
  Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for
  the Effects of Certain Types of Regulation."  The Company has established
  various regulatory assets in cases where the DPU and/or the FERC have
  permitted or are expected to permit recovery of specific costs over time. 
  Similarly, regulatory liabilities established by the Company are required to
  be refunded to customers over time.  Effective January 1, 1996, the Company
  adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
  and for Long-Lived Assets to be Disposed Of."  SFAS No. 121 imposes stricter
  criteria for regulatory assets by requiring that such assets be probable of
  future recovery at each balance sheet date.  SFAS No. 121 did not have an
  impact on the Company's financial position upon adoption.  This result may
  change as modifications are made to the current regulatory framework due to
  ongoing electric industry restructuring efforts in Massachusetts.  If all or
  a separable portion of the Company's operations becomes no longer subject to
  the provisions of SFAS No. 71, a write-off of related regulatory assets and
  liabilities would be required, unless some form of transition cost recovery
  continues through rates established and collected for the Company's
  remaining regulated operations.  In addition, the Company would be required
  to determine any impairment to the carrying costs of deregulated plant and
  inventory assets.  However, pending Massachusetts legislation provides for
  recovery of stranded costs, subject to review.  For additional information
  relating to industry restructuring, see the "Electric Industry
  Restructuring" section under Management's Discussion and Analysis of Results
  of Operations.

      The principal regulatory assets included in deferred charges were as
  follows:

                                                  September 30,  December 31,
                                                      1997          1996
                                                   (Dollars in thousands)
        Maine Yankee unrecovered plant
            and decommissioning costs               $37 596        $   -
        Connecticut Yankee unrecovered plant
            and decommissioning costs                30 021         35 879
        Yankee Atomic unrecovered plant
            and decommissioning costs                 2 694          3 466
        Postretirement benefits costs
            including pensions                        3 027          2 988
        Other                                           616            448
                                                    $73 954        $42 781

        The regulatory liabilities, reflected in the accompanying Balance
    Sheets and related to deferred income taxes, were $3.2 million at
    September 30, 1997 and December 31, 1996.
<PAGE>
<PAGE 8>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

(2) Commitments and Contingencies

        (a) Construction Program

        The Company is engaged in a continuous construction program presently
    estimated at $27 million for the five-year period 1997 through 2001.  Of
    that amount, $5.9 million is estimated for 1997.  As of September 30, 1997
    the Company's actual construction expenditures amounted to approximately
    $3.1 million including an allowance for funds used during construction. 
    The Company expects to finance these expenditures on an interim basis with
    internally-generated funds and short-term borrowings which are ultimately
    expected to be repaid with the proceeds from sales of long-term debt
    securities.

        The program is subject to periodic review and revision because of
    factors such as changes in business conditions, rates of customer growth,
    effects of inflation, maintenance of reliable and safe service, equipment
    delivery schedules, licensing delays, availability and cost of capital and
    environmental regulations.

        (b) Maine Yankee Nuclear Power Plant

        The Company has a 4% equity ownership interest (approximately $3
    million at September 30, 1997), with a power entitlement of 31.2 MW, in a
    nuclear power plant located in Wiscasset, Maine.  The plant, operated by
    Maine Yankee Atomic Power Company (Maine Yankee), has been out of service
    since an outage that began in December of 1996.  On August 6, 1997, the
    Board of Directors of Maine Yankee voted to permanently cease power
    operations and begin the process of decommissioning the plant.  The
    decision to shut down the plant was based on an economic analysis of the
    costs, risks and uncertainties associated with operating the plant
    compared to those associated with closing and decommissioning the plant. 
    Based upon regulatory precedent, Maine Yankee believes that it will be
    permitted to continue to collect from its power purchasers (including the
    Company) decommissioning costs, unrecovered plant investment and other
    costs associated with the permanent closure of the plant over the remain-
    ing period of the plant's operating license that expires in 2008.  The
    Company does not believe the ultimate outcome of the early closing of this
    plant will have a material adverse effect on its operations and believes
    that recovery of these FERC-approved costs would continue to be allowed in
    its rates at the retail level.  Therefore, the Company recorded a
    liability for its estimated share of decommissioning costs and a
    corresponding regulatory asset in the third quarter.
<PAGE>
<PAGE 9>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

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

    The following is a discussion of major factors which have affected
operating revenues, expenses and net income during the periods included in the
accompanying condensed statements of income.  This discussion should be read
in conjunction with the Notes to Condensed Financial Statements appearing
elsewhere in this report.

    A summary of the period to period changes in the principal items included
in the condensed statements of income for the three and nine months ended
September 30, 1997 and 1996 and unit sales for these periods is shown below:

                                   Three Months Ended      Nine Months Ended
                                     September 30,           September 30,
                                     1997 and 1996           1997 and 1996  
                                              Increase (Decrease)
                                            (Dollars in thousands)

Electric Operating Revenues        $ 2 492      7.5 %      $ 7 850      8.6 %

Operating Expenses -
  Electricity purchased for
    resale, transmission and fuel    1 638      7.5          6 989     11.8
  Other operation and maintenance    1 333     25.6          3 983     23.2
  Depreciation                          33      3.0             99      3.0
  Taxes -
    Federal and state income          (189)   (13.8)        (1 324)   (50.1)
    Local property and other            55      5.7             87      3.0
                                     2 870      9.5          9 834     11.5

Operating Income                      (378)   (13.3)        (1 984)   (34.7)

Other Income                           (85)   (20.2)          (672)   (33.1)

Income Before Interest Charges        (463)   (14.2)        (2 656)   (34.3)

Interest Charges                        (8)    (1.0)          (196)    (7.2)

Net Income                         $  (455)   (18.7)       $(2 460)   (48.8)

Unit Sales (MWH)
  Retail                            12 295      3.7         19 432      2.0
  Wholesale                         (2 598)    (4.1)        14 956      8.9
    Total unit sales                 9 697      2.4         34 388      3.1

      The following is a summary of unit sales for the periods indicated:

                                     Unit Sales (MWH)                      
                         Three Months                   Nine Months        
Period Ended      Total   Retail   Wholesale     Total   Retail   Wholesale

September 30,
     1997         409 792  348 987   60 805   1 156 843   974 145  182 698
September 30,
     1996         400 095  336 692   63 403   1 122 455   954 713  167 742
<PAGE>
<PAGE 10>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

Operating Revenues, Electricity Purchased For Resale, Transmission and Fuel

    For the nine months ended September 30, 1997 operating revenue increased
approximately $7.9 million or 8.6% due primarily to increases in electricity
purchased for resale ($7.5 million) and fuel costs ($1 million), offset in
part by a decrease in transmission ($1.5 million).  During the third quarter
of 1997, operating revenue increased approximately $2.5 million or 7.5% due
primarily to increases in electricity purchased for resale ($1.2 million),
fuel costs ($218,000) and transmission ($227,000).  Also contributing to the
increase in both periods were higher unit sales.

    Total unit sales for the current nine-month period increased 3.1% due to
higher retail sales (2%), reflecting increases in sales to residential and
commercial customers, offset in part by lower sales to industrial customers. 
Also affecting the increase in unit sales were higher wholesale sales to the
New England Power Pool.

    During the current quarter and first nine months of 1997, purchased power
costs increased approximately $1.2 million (6.3%) and $7.5 million (14.6%) due
to higher fuel costs and higher costs for replacement power reflecting the
permanent shutdown of Connecticut Yankee during 1996 and the absence of power
from Maine Yankee which had been out of service since December of 1996 and
will be permanently shut down.  Also included in purchased power is an
increase in purchases from affiliate Canal Electric Company's Unit 1 and 2
reflecting the increased availability of these units.

Operating Expenses

    For the current quarter and nine-month period, operation and maintenance
increased $1,333,000 or 25.6% and $3,983,000 or 23.2%, respectively.  The
increase in the nine-month period was primarily due to a one-time charge ($2.5
million) related to a Personnel Reduction Program initiated during the second
quarter (as further discussed below).  Also affecting the increase in the
current three and nine-month periods were higher insurance and benefit costs
of $602,000 and $389,000, respectively and higher costs related to automated
meter reading equipment of approximately $100,000 and $300,000, respectively. 
The significant decreases in federal and state income taxes for the nine-month
period was due to a lower level of pretax income.

Other Income and Interest Charges

    The decrease in other income for the nine-month period was primarily due
to the absence of a gain relating to the 1996 sale of parcels of land
($664,000).

    Interest charges for the current nine-month period declined by 7.2% due to
lower long-term interest costs reflecting the repayment of a $20 million
(9.97%) long-term debt issue during the second quarter of 1996, the effect of
which was partially offset by a higher average level of short-term borrowings. 
During the quarter, interest charges were virtually unchanged reflecting the
aforementioned retirement of long-term debt offset by the higher average level
of short-term borrowings.
<PAGE>
<PAGE 11>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

Personnel Reduction Program

    As initially discussed in the Company's 1996 Annual Report on Form 10-K
filed with the Securities and Exchange Commission, the Company announced the
details of a system-wide voluntary Personnel Reduction Program (PRP) in May
1997.  The goal of the PRP is to achieve a reduced, more efficient and more
productive workforce in response to the significant regulatory changes facing
the System.  This action followed the consolidation of the system's electric
and gas operations.  The expectation is that the system's workforce will be
reduced by 15% to 20%.

    The PRP was offered to substantially all regular and part-time employees
of the system.  Eligibility for employees covered by collective bargaining
agreements was subject to negotiation.  The system reserves the right to limit
the number of participants to 300; however, the system expects the final
participation level to exceed this count.

    The program provides severance based on years of service, the continuation
of certain health and dental insurance for specified periods and limited
reimbursement for certain educational and/or outplacement services.

    To date, approximately 8% of the Company's employees have voluntarily
terminated employment with the Company as a result of the PRP.  The Company
estimates that the cost of termination benefits as described above, including
a portion of costs for certain affiliates but excluding generation-related
costs that are being addressed separately as part of the industry restructur-
ing process, will approximate $2.5 million which was recorded in the second
quarter and had an after-tax income impact of $1.5 million.  The payback
period is expected to be less than one year.

Electric Industry Restructuring

    On December 30, 1996 the DPU issued a final order announcing its "Model
Rules and Legislative Proposal" as a guide in the creation of a competitive
market for electric generation in Massachusetts.  Legislative proposals
concerning electric industry restructuring were filed by the Governor of the
Commonwealth of Massachusetts on February 24, 1997, and by the Massachusetts
Legislature's Joint Committee on Electric Utility Restructuring on March 20,
1997 that ultimately evolved into the proposal issued on August 4, 1997 by the
Senate Chairman of the Joint Committee on Government Regulations. 
Additionally, during the past year, three Massachusetts electric utilities
announced negotiated restructuring settlements with the Massachusetts Attorney
General.  Generally, these original proposals and settlement agreements
included, among other things, provisions for a 10% reduction in customer
charges, divestiture of non-nuclear generating assets, recovery of stranded
costs through a non-bypassable access charge and an implementation date of
January 1, 1998.

    Subsequently, on October 3, 1997, the House Chairman of the Joint
Committee on Government Regulations issued another proposal that included,
among other things, a provision calling for a 15% reduction in rates for
customers taking standard offer service from the utility over a seven-year
period, the establishment of an auditing board within the DPU that would
review the stranded costs that would be included in each company's non-
bypassable access charge, unbundled rates as of January 1, 1998 and
implementation of customer choice of energy supplier by March 1, 1998. 
<PAGE>
<PAGE 12>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

    On October 29, 1997, a joint proposal was filed by the chairpersons of the
Joint Committee on Government Regulations which essentially reflected the
provisions previously proposed.  This proposal was then forwarded to the Ways
and Means Committee of the House of Representatives for further review and
amendment.  The House Ways and Means Committee then sent the amended
legislative proposal to the House of Representatives (the House).  On November
10, 1997, after a considerable number of additional amendments were made by
members of the House, the legislation was passed in the House by a vote of 157
to 3.  Provisions of this legislation include, among other things, a 10%
discount on standard offer service and retail choice of energy supplier
effective March 1, 1998, with a subsequent increase in the discount on
standard offer service to 15% upon completion of divestiture of non-nuclear
generating assets and securitization of net non-mitigable stranded costs
(which, for the Company, are primarily the result of above-market purchased
power contracts with non-utility generators); and, recovery of stranded costs
subject to review and an audit process.  A Senate version of electric industry
restructuring legislation is expected shortly.

    The proposed legislation is lengthy, complex and subject to change before
it is finalized.  The Company cannot yet determine the final impact on its
operations and financial condition.  The final legislation must also be
approved by the Massachusetts House and Senate and signed by the Governor of
Massachusetts.  While the Company is encouraged by the legislation's treatment
of stranded cost recovery, the mandated customer discount could have a
significant impact on future cash flows.  The system is preparing a proposed
restructuring plan in anticipation of final legislation being enacted.

    Auction Process

    On March 31, 1997, the system submitted a report to the DPU which detailed
the proposed auction process for selling its electric generation assets and
entitlements.  The process includes a standard, sealed-bid auction for
generation assets and purchased power contracts.  The auction process would
provide a market-based approach to maximizing stranded cost mitigation and
minimizing the access charges that ratepayers will have to pay for stranded
cost recovery.  A request for bids from interested parties was issued during
August and in October an Offering Memorandum was issued.  The system expects
that the final bidders will be chosen by year-end and that the entire process,
including regulatory approvals, will be completed no later than the end of
1998.

    Provisions of Statement of Financial Accounting Standards No. 71

    As described in Note 2(b) of the Notes to Condensed Financial Statements,
the Company complies with the provisions of Statement of Financial Accounting
Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of
Regulation."  In the event the Company is somehow unable to meet the criteria
for following SFAS No. 71, the accounting impact would be an extraordinary,
non-cash charge to operations in an amount that could be material.  Criteria
that could give rise to the discontinuance of SFAS No. 71 include: 1)
increasing competition restricting the system's ability to establish prices to
recover specific costs, and 2) a significant change in the current manner in
which rates are set by regulators.  The Company monitors these criteria to
ensure that the continuing application of SFAS No. 71 is appropriate. 
Recently, the Securities and Exchange Commission has questioned the ability of
certain utilities continuing the application of SFAS No. 71 where legislation
provided for the transition to retail competition.  The issue of when and how
to discontinue the application of SFAS No. 71 by utilities during transition
<PAGE>
<PAGE 13>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

to competition was referred to the Financial Accounting Standards Board's
Emerging Issues Task Force and guidance was issued in July 1997.  Based on the
current evaluation of the various factors and conditions that are expected to
impact future cost recovery, the Company believes that its utility operations
remain subject to SFAS No. 71 and its regulatory assets, including those
related to electric generation, remain probable of future recovery.
<PAGE>
<PAGE 14>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         The Company is an intervenor in a pending appeal at the
         Massachusetts Supreme Judicial Court (SJC) filed by the
         Massachusetts Institute of Technology (MIT)involving a DPU decision
         approving a customer transition charge (CTC) for the recovery of
         stranded investment costs.  On September 18, 1997, the SJC announced
         its decision remanding the matter to the DPU for further
         consideration.  The SJC stated that, although recovery of prudent
         and verifiable stranded costs by utility companies is in the public
         interest and consistent with the Public Utility Regulatory Policies
         Act, the insufficiencies of the DPU's subsidiary findings precluded
         the SJC from undertaking a meaningful review of the DPU's
         calculations that formed the basis of the customer transition
         charge.  Among the issues that the SJC directed the DPU to consider
         further are: the methodology for calculation of stranded costs, why
         75% of stranded costs were allocated to MIT rather than 100%, the
         prudence of the stranded costs incurred by the Company, and whether
         the Company took the necessary mitigation efforts to reduce stranded
         costs.  With the SJC's remand of the order to the DPU, the parties
         have been discussing a standstill agreement.  The standstill
         agreement would not resolve questions about the ultimate level of
         CTC payments or what the final determination will be with respect to
         the CTC upon remand to the DPU.  The standstill agreement, if
         finalized and approved by the SJC, would govern the obligations of
         MIT to pay the CTC, subject to reconciliation, during the term of
         the DPU's remand proceeding.  This issue is discussed more fully in
         the Company's 1996 Annual Report on Form 10-K.  At this time,
         management is unable to predict the outcome of this proceeding.

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits

         Exhibit 27 - Financial Data Schedule.

         Filed herewith as Exhibit 1 is the Financial Data Schedule for the
         nine months ended September 30, 1997.

         Filed herewith as Exhibit 2 is the restated Financial Data Schedule
         for the nine months ended September 30, 1996.

   (b)   Reports on Form 8-K

         No reports on Form 8-K were filed during the three months ended
         September 30, 1997.
<PAGE>
<PAGE 15>

                       CAMBRIDGE ELECTRIC LIGHT COMPANY

                                  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.



                                          CAMBRIDGE ELECTRIC LIGHT COMPANY
                                                    (Registrant)


                                          Principal Financial and
                                            Accounting Officer:



                                          JAMES D. RAPPOLI                 
                                          James D. Rappoli,
                                          Financial Vice President
                                            and Treasurer




Date:   November 14, 1997