FORM 10-Q

                     SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON  D.C.   20549


                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934


     For Quarter Ended September 30, 1996 Commission File Number 0-6028


                           BIRMINGHAM UTILITIES, INC.                  
             (Exact name of registrant as specified in its charter)


      CONNECTICUT                    06-0878647       
(State of other jurisdiction      (I.R.S. Employer
of incorporation or organization) Identification No.)

230 Beaver Street, Ansonia, CT            06401          
(Address of principal executive office         (Zip Code)

(Registrant's telephone number
 including area code)        (203)  735-1888    

                                None                              
(Former name, former address and former 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.

             Class                     Outstanding at Oct. 31, 1996 
Common stock, no par value                      756,776


ITEM I.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                      BIRMINGHAM UTILITIES, INC.
                            BALANCE SHEETS 
  As of September 30, 1996, December 31, 1995 and September 30, 1995
                              
                              (Unaudited)                    (Unaudited)
                              Sept. 30,        Dec. 31,       Sept. 30, 
                              1996             1995           1995      
ASSETS:      
<S>                           <C>              <C>             <C>
Utility Plant                 $17,345,831      $16,352,307     $16,236,250
Accumulated depreciation       (5,424,650)      (5,130,305)     (5,054,758)
                               11,921,181       11,222,002      11,181,492
Current Assets:
 Cash and cash equivalent         348,111          398,869          82,048
 Accounts receivable, net of
  allowance for doubtful
  accounts                        626,966          725,154         801,139
 Accrued utility revenue          409,872          412,876         469,860
 Materials & supplies              52,167           50,840          46,798
 Prepayments                       77,172           27,160          88,333
   Total current assets         1,514,288        1,614,899       1,488,178

Note receivable                         0                0       1,013,222
Deferred Charges                  800 898          713,417         784,937
Unamortized debt expense          196,212          205,429         209,162
Income taxes recoverable          456,659          456,659         372,247
Other assets                      411,159          411,352         417,949
                                1,864,928        1,786,857       2,797,517
      
                              $15,300,397      $14,623,758     $15,467,187      

STOCKHOLDERS' EQUITY AND LIABILITIES

Stockholders' Equity:
 Common Stock, no par value,
 authorized 2,000,000 shares;
 issued and outstanding
 9/30/96-756,806;
 12/31/95-752,282;
 9/30/95-750,981              $ 2,213,805      $ 2,172,116     $ 2,161,181
 Retained earnings              1,629,632        1,235,482       1,057,541
                                3,843,437        3,407,598       3,218,722      
      
Note Payable                    1,243,750        1,300,000       1,919,106
Long-term debt                  4,700,000        4,700,564       4,703,189
                                5,943,750        6,000,564       6,622,295
Current Liabilities:
  Current portion of
   note payable                    75,000           75,000         289,664
  Acounts payable and 
   accrued liabilities            915,458          674,488         474,240
     Total current
     liabilities                  990,458          749,488         764,240
      
Customers' advances 
 for construction               1,264,696        1,229,985       1,258,913
Contributions in aid
 of construction                  719,736          719,736         719,736
Regulatory liability-income
 taxes refundable                 195,049          195,049         202,641
Deferred income taxes           1,232,779        1,263,932       1,152,694
Deferred income on disposition
 of land                        1,110,492        1,057,406       1,527,946
Commitment and contingent
 liabilities                  $         0      $         0      $         0
                              $15,300,397      $14,623,758      $15,467,187
</TABLE>
The accompanying notes are an integral part of these financial statements.

<TABLE>
<CAPTION>
                        BIRMINGHAM UTILITIES, INC.
                STATEMENTS OF INCOME AND RETAINED EARNINGS 
      FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                (Unaudited)


                               Three Months Ended       Nine Months Ended
                                    Sept. 30,               Sept. 30,      
                               1996         1995        1996          1995
<S>                          <C>         <C>           <C>         <C>
Operating Revenue (Note B)   $1,129,750  $1,169,460    $3,286,685  $3,213,011

Operating Expenses:
 Operations and Maintenance     205,785     198,843       607,349     597,603
 Purchased Water                173,741     218,366       499,574     574,529
 Administrative and General     270,616     254,178       815,604     810,092
 Depreciation                    99,318      98,943       295,794     286,966
 Taxes Other Than Income        101,908     137,669       384,701     402,011
 Taxes on Income                 53,456      45,382       105,278      50,532
 Total Operating Expense        904,824     953,381     2,708,300   2,721,733  
  
Utility Operating Income        224,926     216,079       578,385     491,278  
  
Amortization of Prior Years'
  Deferred Income on Land
  Dispositions, net              36,690      27,831       110,071      82,079
  (Net of income taxes of
  $25,165 and $78,304 in 1996
  and $19,825 and $58,467 in
  1995 for the three months
  and nine months, respectively)        

Other Income, net                23,771      29,931        55,236      97,809  

Income before interest expense  285,387     273,841       743,692     671,166
     
Interest and Amortization of
  Debt Discount & Expense       162,007     158,600       453,598     467,520
Income from dispositions of
 land,  net (net of income
 taxes of  $266,130 and
 $32,935 in 1996 and 1995,
 respectively)                  386,709      -0-          386,709      46,494

Net income                      510,089     115,241       676,803     250,140

Retained earnings, beginning  1,217,724   1,032,284     1,235,482   1,077,185
Dividends paid                   98,181      89,984       282,653     269,784

Retained earnings, ending    $1,629,632  $1,057,541    $1,629,632  $1,057,541

Earnings per share               $.68        $.15          $.90        $.33 
Dividends per share              $.13        $.12          $.375       $.36   
</TABLE>
The accompanying notes are an integral part of these financial statements.

<TABLE>
<CAPTION>
                        BIRMINGHAM UTILITIES, INC.
                         STATEMENTS OF CASH FLOWS
               NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                (Unaudited)

                                          Nine Months Ended  Nine Months Ended
                                            Sept. 30, 1996     Sept. 30, 1995

<S>                                             <C>              <C>       
Cash Flows From Operating Activities
  Net Income                                    $676,803         $250,140 

  Adjustments to reconcile net income to
    net cash provided by operating activities:
  Depreciation and amortization                  335,229          314,012
  Amortization of deferred income, net of tax   (110,071)         (82,079)
  Income from current year land dispositions,
    net of tax                                  (386,709)         (46,494)
  Increases and decreases in assets
    and liabilities:      
  Accounts receivable and accrued utility
    revenue                                      101,192          (47,961)
  Materials and supplies                          (1,327)           1,349
  Prepayments                                    (50,012)         (48,907)
  Accounts payable and accrued expenses         (123,592)         (80,845)      
  Other assets and deferred charges, net        (218,027)        (222,473)
  Deferred income taxes                         ( 11,025)        ( 15,120)
  Customer advance (refund) for construction      34,711          100,458
  Total Adjustments                             (429,631)        ( 97,820)

Net cash flows provided by operating activities  247,172          152,320

Cash flows from investing activities:
  Net construction expenditures               (1,042,753)        (497,128)
  Proceeds from sale of utility plant              1,251              759      
  Proceeds from land dispositions              1,041,350          200,000      
Net Cash flows (used in)      
  investing activities                        (      152)        (296,369)      

Cash flows from financing activities:
  Increase in current note payable                 -0-            124,664 
  Increase (decrease) in long-term debt          (56,814)         293,542      
  Dividends paid, net of reinvested dividends   (240,964)        (250,921)

Net Cash flows provided by  
   financing activities:                        (297,778)         167,285

Net (decrease) in cash & cash equivalents       ( 50,758)          23,236
Cash & cash equivalents, beginning               398,869           58,812      
Cash, ending                                    $348,111         $ 82,048

Supplemental disclosure of cash flow 
 information:
      Cash paid for
        Interest                                $547,022         $569,512
        Income Taxes                            $207,800         $ 60,575      

Supplemental disclosure of non-cash flow information:
      The Company receives contributions
      of plant from builders and developers.
      These contributions of plant are reported in 
      utility plant and in customers' advances for 
      construction.  The contributions are deducted 
      from construction expenditures to determine 
      cash expenditures by the Company.  


            Gross Plant, additions           $1,042,753          $497,128
            Customers' advances for 
              construction                     ( 34,711)         (100,458)
            Capital expenditures, net        $1,008,042          $396,670
</TABLE>
The accompanying notes are an integral part of these financial statements.

                    BIRMINGHAM UTILITIES, INC.
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)

Note A. - UNAUDITED STATEMENTS

      The statements as of and for the three and nine months ended September 30,
1996 are prepared without audit, however, in the opinion of management, all
material adjustments for a fair statement of results have been made.  The 
balance sheet as of December 31, 1995 has been audited.

Note B. - SEASONALITY OF REVENUE

      The Company's business of selling water is to a certain extent
seasonal because water consumption normally increases during the drier and 
warmer summer months.  Accordingly, the results of operations for the three 
and nine months ended September 30, 1996 and September 30, 1995, if 
annualized, do not necessarily reflect annual results.

Note C. - ACCOUNTS RECEIVABLES, NET OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

      Accounts Receivable, net declined $98,188 during the first nine months of
1996, as the result of a more formalized collection effort developed during 
1995, as well as, lower third quarter utility operating revenue in 1996 
versus 1995.

Note D. - ACCRUED UTILITY REVENUE

      Accrued Utility Revenue at September 30, 1996 and December 31, 1995
includes $60,707 and $84,380, respectively, in costs incurred by the Company to
date on a Main replacement project required by the State of Connecticut.  At
September 30, 1995 the balance due for that project and included in accrued
utility revenue totaled $80,022.  The Company's costs are reimbursable to the
Company by the State of Connecticut. 

Note E. - PREPAYMENTS
<TABLE>
<CAPTION>
Prepayments consist of:
                           Sept. 30,      Dec. 31,      Sept. 30,
                           1996           1995          1995    
<S>                        <C>            <C>           <C>
Insurance                  $ 38,685       $ 7,545       $ 44,369
Legal & accountg.fees         9,242             0         13,054
Other prepaid expenses       47,927        19,615         30,910

                           $ 77,172       $27,160       $ 88,333
</TABLE>
      The fluctuation in total prepayments as of the ends of the
periods noted was caused primarily by the fluctuation in prepaid
insurance.  Insurance premium payments are made during the first quarter, 
since January 1 is the beginning of the policy period, and amortized 
throughout the year.  

      The fluctuation in "Legal and Accounting Fees" reflects 
certain large accounting and other annual reporting costs which
regularly occur in the first quarter and are amortized over the
remaining part of the year to better match costs to the annual time
period benefitted.  

Note F. - NOTE RECEIVABLE:

      The $1,013,222 note receivable as of September 30, 1995
reflected the balance owed by a real estate developer for the sale
of approximately 152 acres of land.  The promissory note was paid
in full during 1995, with $200,000 of the principal being received
during the first quarter, 1995 and the balance in the fourth
quarter of 1995.  

Note G. - LONG TERM DEBT
<TABLE>
<CAPTION>
                              Sept. 30,            Dec. 31,            Sept. 30,
                              1996                 1995                1995    
<S>                        <C>                   <C>                <C>
First mortgage bonds,
 Series E 9.64% due
 September 2011            $4,700,000            $4,700,000         $4,700,000
 Note Payable               1,243,750             1,300,000          1,919,106
 Other                              0                   564              3,189
                           $5,943,750            $6,000,564         $6,622,295
</TABLE>

First Mortgage Bonds

      Pursuant to its Amended and Restated Mortgage Indenture, the
Company has outstanding a series of first mortgage bonds in the
amount of $4,700,000 due on September 1, 2011.  The terms of the
Indenture provide for, among other things, annual sinking fund
payments commencing September 1, 1997, and limitations on (a)
payment of cash dividends and (b) incurrence of additional bonded
indebtedness.  Pursuant to this agreement, approximately $771,822
was available to pay dividends at September 30, 1996, after the
quarterly dividend payment made on that date.  Interest is payable
semi-annually on the first day of March and September.  The
indenture is secured by a lien on all of the Company's utility
property other than excess land available for sale.

      There are no maturities of bonds until September 1, 1997,
when the Company is required to begin payments of $94,000 on each
September 1, until the bonds are paid in full.

Note Payable

      In 1994, the Company (a) converted certain short term
borrowings to a ten-year $1,500,000 secured term loan, (as of
September 30, 1996 the principal balance has been paid down to
$1,318,750, $75,000 of which is paid down annually, therefore
$1,243,750 is long-term) (b) established a $1,500,000 two-year
secured revolving line of credit to fund additional capital
improvements, and obtained a one-year, unsecured line of credit of
$600,000 to be used for working capital purposes.  The two-year
revolving period expires in April of 1998, at which time the
outstanding balance may be converted to a term loan with the same
maturity and payment terms as the original term loan.  Both the
term loan and the revolving line of credit are secured by a lien
(subordinate to the lien of the Mortgage Bond Indenture;  See Note
First Mortgage Bonds, above) on all of the Company's utility
property other than its excess land available for sale.

The term loan portion of the facility has both fixed and variable
interest rate options.  The applicable interest rate at December
31, 1995 and through July 2000 is 8.18%.  Interest is payable
monthly.  The renewed two-year revolving line of credit also has
various interest rate options, including a variable rate at 1%
above the prime rate and LIBOR rate options, fixed for various
short term periods including 30, 60 or 90 days, at 1.75% over the
applicable LIBOR rate.  Interest is payable monthly.  There were no 
outstanding borrowings on the revolving line of credit at September
30, 1996.

In April 1996, the unsecured, working capital line of credit was
extended for one year.  The unsecured line of credit also provides
for various interest rate options, including a variable rate at
0.25% above the prime rate, a variable rate at 1.75% above the
bank's cost of funds (as provided by the bank), and the LIBOR
options also available under the two-year revolving line of credit. 
There were no outstanding borrowings on the unsecured line of
credit at September 30, 1996.

All three facilities provide that a default under any of them or
under the Mortgage Bond Indenture is considered a default under the
others.  They also provide that the net proceeds from the sale of
any of the Company's excess land must be used to reduce the balance
of the two year line of credit first and then the term loan.

Note H - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

                              Sept. 30,            Dec. 31,            Sept. 30,
                              1996                 1995                1995    
Accounts Payable              $193,988             $116,313            $121,126

Accrued Expenses:
  Taxes                        510,469              297,810             154,036
  Interest                      46,513              151,172              37,876
  Pension                       95,429               72,710             120,689
  Other                         69,159               36,483              40,849
                              $915,458             $674,488            $474,576

The fluctuation in "Accounts Payable" reflects primarily a progress payment
owed to a contractor on a main replacement project, included as a payable
at September 30, 1996 with no comparable balance due as of December 31,
1995 or September 30, 1995.  The fluctuation in taxes primarily reflects
the increased liability for federal income taxes as of September 30, 1996,
due to increased taxable income for 1995 resulting from the September 26,
1996 land sale. - See Note I. Deferred Gains on Land Dispositions.

                              Sept. 30,        Dec. 31,        Sept. 30,
                              1996             1995            1995      

Post Retirement Benefit
 Other Than Pensions          $32,400          $ 0             $25,972  

The fluctuation in Other accruals primarily reflects the accrual for post
retirement benefits other than pension ("PBOP") which is funded by year
end.

Note I - DEFERRED GAINS ON LAND DISPOSITIONS

The DPUC has provided for a rate making accounting procedure for income
from land dispositions which has the effect of sharing the economic
benefits of such dispositions between ratepayers and shareholders over a
period of time.  Accordingly, the Company includes in its income in years
in which it has a land disposition only a portion of the income that is
realized from such disposition.  The balance of the income is deferred and
amortized to the Company's rate base and equity for rate making purposes,
and to income for financial reporting purposes, over the period of time
during which the rate making procedure is in effect.  For the three and
nine months ended September 30, 1996 and 1995 such deferred land
disposition gains (net of income taxes) were included in income as follows:
<TABLE>
<CAPTION>
                                   Three Months Ended    Nine Months Ended
                                         Sept. 30,           Sept. 30,
                                   1996          1995    1996         1995
<S>                              <C>           <C>      <C>         <C>
Amortization of Prior Years'
  Deferred Income on 
      Land Dispositions, net     $36,690       $27,831  $110,071    $82,079
</TABLE>

      The increase in the amortization for the three months and nine months
ended September 30, 1996 vs 1995 reflects primarily the additional
amortization in 1996 of the gain deferred from the proceeds received in
November of 1995 from a previous installment sale.  See Note F-Note
Receivable.

      In September 1996, the Company sold excess land for an aggregate
purchase price of $1,041,350 resulting in an after tax gain of $529,739. 
Under the ratemaking procedures approved by the Connecticut Department of
Public Utility Control ("DPUC"), the Company included $386,709 of the gain
in the third quarter.  In accordance with the DPUC's order approving the
sale, the remainder of the gain is deferred and will be recognized over the
four years ending September 30, 2000.

Note J - EARNINGS PER SHARE

The Company has only one class of stock outstanding; earnings per share are
computed by dividing the outstanding weighted average shares of common
stock, on a year to date basis through the balance sheet date, into the
earnings for all periods presented.  Average shares outstanding were     
755,125 and 749,879 for the three month periods ended September 30, 1996
and 1995, respectively and 753,665 and 749,397 for the nine months ended
September 30, 1996 and 1995, respectively.

Note K - RATE MATTERS

Effective January 1, 1996, the DPUC granted the Company increased rates
designed to produce additional annual revenues of $289,333 (an increase of
approximately 6.89% over previous rates).

Note L - EQUITY

Stock Option Plans

      In 1994, the Company adopted two stock option plans, a non employee
director option plan and a key employee stock option plan.  75,000 shares
were authorized under the two plans, which provide for options to purchase
common stock of the Company at the fair market value at the date of the
grant.  The options vest over various periods.  As of September 30, 1996,
options for 60,750 shares had been granted to directors and employees of
the Company under both plans.  

Dividend Reinvestment Plan

      In 1994, the Company also adopted a dividend reinvestment plan which
provides for the issuance and sale of up to 70,000 shares of the Company's
authorized but unissued common stock to its shareholders who elect to
reinvest cash dividends on the Company's existing shares.  Shares available
under the plan may be purchased at their fair market value price on the
date of the dividends to be invested in the new shares. 

      In 1995 the Company issued 3,114 shares of common stock at a value
of $31,108 in lieu of cash dividends in connection with its dividend
reinvestment plan.  Through September 30, 1996, an additional 4,524 shares
of common stock were issued at a value of $41,689 in lieu of cash
dividends.


                                 ITEM II

                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS

RESULTS OF OPERATIONS

Net Income

      Net income increased $394,848 (343%) to $510,089 in the third quarter
of 1996 from $115,241 in the third quarter of 1995.  The increase for the
quarter reflects the $386,709 current year gain on land sales in the third
quarter of 1996 as compared to no current year gains in the third quarter,
1995.   Without the impact of the current year land sale gain, quarterly
net income increased $8,139 (7%) to $123,380 in the third quarter 1996 from
$115,241 in the third quarter 1995.  This increase was primarily the result
of increased utility operating income. Lower 1996 third quarter operating
revenue, resulting from reduced consumption during the relatively wet 1996
third quarter compared to the record draught conditions in the third
quarter of 1995, was more than offset by lower operating expenses,
particularly purchased water costs.

      For the nine months ended September 30, 1996, net income increased
$426,663 (171%) to $676,803 from $250,140 for the first nine months of
1995.  The increase for the nine months 1996 compared to 1995 also resulted
primarily from the $340,215 increase in current year land sale gains of
$386,709 for the first nine months of 1996 compared to $46,494 for the
first nine months of 1995.  Nine month net income without the impact of the
current year gains increased $86,448 (42%) to $290,094 for the 1996 period
from $203,646 for the 1995 period.  This increase was primarily caused by
increased operating revenue, a reduction in purchased water costs and taxes
other than income, and an increase in the amortization of prior years
deferred gains. (See Note H to the Financial Statements).

Operating Revenues

      For the third quarter of 1996, operating revenues decreased $39,710
(3.4%) from the same period of 1995.  The decrease was primarily the result
of reduced water consumption.  During the third quarter of 1995, the region
experienced record draught conditions as compared to the relatively wet
third quarter of 1996.  Water consumption by all customer classes declined
13.8% in the aggregate during the third quarter of 1996 compared to the
third quarter of 1995.  This decline in consumption was partly offset by
the impact in 1996 of a 6.89% rate increase, which became effective on
January 1, 1996, (see Note K to the Financial Statements).

      For the nine months ended September 30, 1996, operating revenue
increased $73,674 (2.3%) over the same 1995 period reflecting the January
1, 1996 rate increase of 6.89%, which was partly offset by decreased water
consumption.

Operating Expenses

      Operating expenses decreased $48,557 (5.1%), when comparing the third
quarter of 1996 to the third quarter of 1995.  The decrease primarily
reflects lower water consumption, resulting in a $44,625 (20.4%) reduction
in purchased water expense.  Taxes other than income decreased $35,761,
primarily due to a re-valuation and reduced mill rate for personal property
taxes in one of the towns in the Company's service area.  

      Operating expenses of $2,708,300 for the first nine months of 1996
decreased $13,433 from $2,721,733 for the same period of 1995.  This
reduction was primarily caused by a $74,955 (13%) decrease in purchased
water expense resulting from reduced consumption of water in 1996 compared
to 1995.  Taxes other than income decreased $17,310 for the nine months of
1996 compared to 1995, reflecting the re-valuation and mill rate reduction. 

Amortization of Prior Years' Deferred Income on Land Dispositions, net

      The amortization of prior years' deferred income on land dispositions
increased $8,859 (32%) to $36,690 for the third quarter of 1996 from
$27,831 in the same quarter of 1995.  For the nine months ended September
30, 1996 compared to the same period of 1995, the amortization of prior
years' deferred income increased $27,992 (34%).  The increase for both
periods reflects primarily the additional amortization of gains deferred
from land sales which occurred during 1995.

Other Income, net

      Other income, net, decreased $6,160 and $42,573 between 1996 and 1995
for the three months and nine months, respectively, due primarily to the
decrease in interest income on the note receivable, which was accruing at
the prime rate in 1995 until it was paid in full in November 1995.

Interest and Amortization of Debt Discount & Expense

      The fluctuation in the average level of outstanding debt resulting
from the timing of capital expenditures and the application of land sale
proceeds, caused interest expense to increase for the three months ended
September 30, 1996, compared to the same quarter of 1995, and decrease for
the nine months comparison.


                           FINANCIAL CONDITION

      Effective January 1, 1996, the DPUC granted the Company increased
rates designed to provide additional annual revenues of $289,333 (6.89%).

      The Company generates sufficient funds available from operations to
meet its day-to-day operational needs.  It will not, however, be able to
generate sufficient funds from sales of water to satisfy all of its
construction plans.  Completion of the Company's Long-Term Capital
Improvement Program is dependent upon the Company's ability to raise
capital from external sources, including, for the purpose of this analysis,
proceeds from the sale of the Company's holdings of excess land.  The
Company believes that by selling excess lands and reinvesting the net
proceeds it can generate sufficient equity capital to support its recently
updated 10 year capital budget, currently estimated at $11,602,000.  Such
land dispositions are subject to approval by the DPUC.

      The Company's 1996 Capital Budget of $1,140,000 is two-tiered.  The
first tier, totalling $805,000, includes $268,000 for routine annual
expenditures for services, mains, hydrants, and meters, as well as $240,000
for low system distribution improvements, $115,000 for the painting of two
storage tanks, $150,000 for small main replacements and $32,000 toward
Level "A" Mapping to be used in the process of protecting the Housatonic
Well Field aquifer.  The Company has expended $691,000 on its tier one
budget through the first nine months of 1996.  The Company has funded and
expects to continue to fund the routine annual expenditures from internally
generated funds and the balance of the first tier budget from external
sources.  These external sources include either borrowings under its
$1,500,000 secured, two-year revolving line of credit, net proceeds from
land sales or a combination of both.

      The second tier of the 1996 Capital Budget consists of replacements
and betterments which are part of the Company's Long Term Capital
Improvement Program and includes $335,000 of budgeted plant additions. 
Plant additions from this part of the 1996 budget will require external
financing in addition to the Company's two-year revolving line of credit. 
Through September 30, 1996, the Company has expended approximately $182,000
on projects included in the second tier budget.  The balance of planned
second tier plant additions can be, and portions of them are expected to
be, deferred to future years if funds are not available for their
construction in 1996.

      As of September 30, 1996, the Company has approximately 1,400 acres
of excess land available for sale, consisting of land currently classified
as Class III, non-watershed land under the statutory classification system
for water company lands. The Company defers the costs it incurs to prepare
the excess land for sale.  It allocates non-specific land sale costs among
all parcels available for sale, based upon the total acres available for
sale when the costs are incurred.  The costs are charged against the
proceeds received when a parcel is sold.  The $87,481 net increase in
deferred charges during the first nine months of 1996 primarily reflects
costs for surveys and maps related to readying these land parcels for sale,
as well as costs incurred during the application process for a 10-acre
parcel subdivision.

      On September 26, 1996, the Company sold approximately 59.24 acres of
unimproved real property to the City of Ansonia (the "City") for an
aggregate purchase price of $1,041,350.  On November 7, 1996, the Company
agreed to sell to the Connecticut Department of Transportation ("DOT") a
3.68 acre parcel of land in Seymour, Connecticut for $175,000. The DOT sale
is subject to approval by the DPUC, and the Company does not expect the
transaction to be consummated until mid-1997.

      The Company is actively pursuing additional sales of real property. 
Because of the delays required by the regulatory process, however, it does
not expect to be able to consummate any such sales during 1996, even if
current discussions lead to a sales agreement or sales agreements in the
near future.

      The Company maintains a credit facility with Fleet Bank, N.A.
consisting of a $1,500,000 term loan due in the year 2004 and a secured
line of credit also in the principal amount of $1,500,000 which expires in
April, 1998.  The secured line of credit is being used to provide funds to
continue the Company's construction program; at the Company's option it may
be converted to a six year term loan at the end of the two year revolving
period.  The Company also maintains an additional one-year, unsecured line
of credit in the amount of $600,000 to be used for working capital
purposes. 

      The DPUC has prohibited the Company from drawing down funds under the
revolving line of credit, if at the time of or as a result of the draw
down, the amount of the Company's long-term debt (including amounts
outstanding under the two year revolving line of credit) would exceed 67%
of the Company's total capitalization.  There was no outstanding balance
under the two year revolving line of credit at September 30, 1996.  The
limitation noted above, as of September 30, 1996, would not, given the
Company's ratio of long term debt to total capital of 61% at that time,
limit additional borrowings under the revolving line of credit.  The DPUC
has also required that the Company's ratio of long-term debt to total
capital be no greater than 62% by the end of the new two-year revolving
period.

      In 1994, the Company's Board of Directors approved a common stock
Dividend Reinvestment Plan (the "Plan") pursuant to which shareholders will
be entitled to purchase up to 70,000 new shares of the Company's common
stock by applying to the purchase price of the new shares cash dividends
which otherwise would be issued by the Company with respect to its existing
common stock.  The Dividend Reinvestment Plan provides that the purchase
price for the new shares will be their fair market value at the time of the
purchase.  The plan was approved by the DPUC on May 24, 1995.  The Company
cannot predict what percentage of its cash dividends will from time to time
be reinvested in new shares of the Company's common stock.  Since the
plan's implementation just prior to the June 30, 1995 dividend, a total of
$31,108 was reinvested in 1995 and an additional $41,689 was reinvested
during the first nine months of 1996. 


PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.  Not applicable.

Item 2.  Changes in Securities.  Not applicable.

Item 3.  Default Upon Senior Securities.  Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders.  None.

Item 5.  Other Information.  None.

Item 6.  Exhibits and Reports on Form 8-K.

      (a)  Exhibits -  None. 
      (b)  Reports on Form 8-K - None.



                           SIGNATURES

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

                        

                          BIRMINGHAM UTILITIES, INC.
                          Registrant



                          /s/ Aldore J. Rivers                               
Date: November 14, 1996   Aldore J. Rivers, President


                          /s/ Paul V. Erwin
Date: November 14, 1996   Paul V. Erwin, Treasurer