<PAGE 1>

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                         Washington, D. C. 20549-1004

                                   Form 10-K

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

(Mark One)
(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [FEE REQUIRED]

     For the fiscal year ended December 31, 1995

                                      OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from _______________ to _______________

                         Commission file number 2-1647

                           COMMONWEALTH GAS COMPANY
            (Exact name of registrant as specified in its charter)

         Massachusetts                                    04-1989250    
(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)

          Securities registered pursuant to Section 12(b) of the Act:

    Title of each class        Name of each exchange on which registered
          None                                   None

          Securities registered pursuant to Section 12(g) of the Act:

                                Title of Class
                                     None

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               March 15, 1996 
        Common Stock, $25 par value           2,857,000 shares

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

Documents Incorporated by Reference           Part in Form 10-K
                None                           Not Applicable

List of Exhibits begins on page 34 of this report.
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                           COMMONWEALTH GAS COMPANY
                        FORM 10-K    DECEMBER 31, 1995

                               TABLE OF CONTENTS


                                    PART I
                                                                     PAGE

Item  1.    Business........................................          3

              General.......................................          3
              Gas Supply
                General.....................................          3
                Hopkinton LNG Facility......................          4
              Rates and Regulation..........................          5
              Competition...................................          7
              Environmental Matters.........................          8
              Construction and Financing....................          8
              Employees.....................................          9

Item  2.    Properties......................................          9

Item  3.    Legal Proceedings...............................          9


                                    PART II

Item  5.    Market for the Registrant's Common Stock and
            Related Stockholder Matters.....................         10

Item  7.    Management's Discussion and Analysis of
            Results of Operations...........................         11

Item  8.    Financial Statements and Supplementary Data.....         14

Item  9.    Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure.............         14


                                    PART IV

Item 14.    Exhibits, Financial Statement Schedules and
            Reports on Form 8-K.............................         34


Signatures..................................................         43
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                           COMMONWEALTH GAS COMPANY

                                    PART I.

Item 1.     Business

      General

      Commonwealth Gas Company (the Company) is engaged in the distribution
and sale of natural gas at retail to approximately 233,000 customers in a
1,067 square mile area which includes 49 communities in eastern, southeastern
and central Massachusetts.  The approximate year-round population of this
service area is 1,128,000.

      The Company, which was organized in 1851 under the laws of the
Commonwealth of Massachusetts, operates under the jurisdiction of the
Massachusetts Department of Public Utilities (DPU), which regulates retail
rates, accounting, issuance of securities and other matters.  The Company is a
wholly-owned subsidiary of Commonwealth Energy System ("System"), which,
together with its subsidiaries, is collectively referred to as "the system." 
Since the date of its organization the Company has, from time to time,
acquired the property and franchises of, or merged with, other gas companies.

      The Company is the only gas distribution utility in its service area
and, by virtue of its existing franchises, no other gas distribution utility
may extend its operations into the Company's service area without the
authorization of the DPU.  Alternative sources of energy are available to
customers within the service territory, but competition from these sources has
not been a significant factor affecting the Company's firm gas sales to
existing customers.  Even with the higher cost of storage and liquefied
natural gas (LNG), which is required to supplement pipeline supply, the
overall long-term cost of gas has been competitive with the cost of
alternative fuel sources for most of the Company's customers.

      Of the Company's 1995 firm gas unit sales, 55.5% was sold to residential
customers, 27.8% to commercial customers, 11.6% to industrial customers and
5.1% to other customers.  Capital expenditures are required to bring gas into
areas of anticipated growth and both the distribution capability and gas
supply must be available when new development begins or potential customers
will seek alternative sources of fuel.  Certain industrial customers with
dual-fuel capability can convert from gas to alternative fuels under terms of
contracts which permit interruption of their service upon short notice or at
contractually scheduled times.

      Gas Supply

      (a)  General

      In April 1992, the Federal Energy Regulatory Commission (FERC) issued
Order No. 636 (Order 636) which became effective on November 1, 1993.  The
order required interstate pipelines to unbundle existing gas sales contracts
into separate components (gas sales, transportation and storage services) and
to provide transportation services that allow customers to receive the same
level and quality of service they had with the previous bundled contracts. 
Prior to the implementation of Order 636 the Company purchased the majority of
its gas supplies from either Tennessee Gas Pipeline Company (Tennessee) or
Algonquin Gas Transmission Company (Algonquin), supplemented with third-party
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                           COMMONWEALTH GAS COMPANY

firm gas purchases, storage services and firm transportation from various
pipelines.  Presently, the Company purchases only transportation, storage and
balancing services from these pipelines (and other upstream pipelines that
bring gas from the supply wells to the final transporting pipelines) and
purchases all of its gas supplies from third-party vendors, utilizing firm
contracts with terms ranging from less than one year to three or more years. 
The vendors vary from small independent marketers to major gas and oil
companies.  Further information concerning Order 636 is contained in Note 6(c)
of the Notes to Financial Statements filed under Item 8 of this report.

      In addition to firm transportation and gas supplies mentioned above, the
Company utilizes contracts for underground storage and LNG facilities to meet
its winter peaking demands.  The underground storage contracts are a
combination of existing and new agreements which are the result of Order 636
service unbundling.  The LNG facilities, described below, are used to liquefy
and store pipeline gas during the warmer months for use during the heating
season.  During 1995, over 99% of the gas utilized by the Company was
delivered by the interstate pipeline system.  The remaining small quantity
(approximately 150,000 MMBTU) was delivered as LNG from Distrigas of
Massachusetts.

      The Company entered into a multi-party agreement in 1992 to assume a
portion of Boston Gas Company's contracts to purchase Canadian gas supplies
from Alberta Northeast (ANE) and have the volumes delivered by the Iroquois
Gas Transmission System and Tennessee pipelines.  The ANE gas supply contract
was filed with the DPU and hearings were completed in April 1993.  The DPU
approved the ANE gas supply contract in November 1995.  The Company should
complete assumption of these contracts during the first half of 1996 upon
final execution of all pertinent agreements and contracts.

      The Company began transporting gas on its distribution system in 1990
for end-users.  There are currently thirty-four customers using this
transportation service, accounting for 6,791 BBTU of throughput in 1995 which
represented approximately 12.9% of system throughput.

      (b)  Hopkinton LNG Facility

      A portion of the Company's gas supply during the heating season is
provided by Hopkinton LNG Corp. (Hopkinton), a wholly-owned subsidiary of the 
System.  The facility consists of a liquefaction and vaporization plant and
three above-ground cryogenic storage tanks having an aggregate capacity of
3 million MCF of natural gas.

      In addition, Hopkinton owns a satellite vaporization plant and two
above-ground cryogenic storage tanks located in Acushnet, Massachusetts with
an aggregate capacity of 500,000 MCF of natural gas and are filled with LNG
trucked from Hopkinton.

      The Company has a contract for LNG service with Hopkinton extending
through 1996, thereafter renewable year to year with notice of termination due
five years in advance.  Contract payments include a demand charge sufficient
to cover Hopkinton's fixed charges and an operating charge which covers
liquefaction and vaporization expenses.  The Company furnishes pipeline gas
during the period April 15 to November 15 each year for liquefaction and
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                           COMMONWEALTH GAS COMPANY

storage.  As the need arises, LNG is vaporized and placed in the distribution
system of the Company.

      Based upon information presently available regarding projected growth in
demand and estimates of availability of future supplies of pipeline gas, the
Company believes that its present sources of gas supply are adequate to meet
existing load and allow for future growth in sales.

      Rates and Regulation

      (a)   Automatic Adjustment Clauses

      The Company has a Standard Seasonal Cost of Gas Adjustment rate schedule
(CGA) which provides for the recovery, from firm customers, of purchased gas
and conservation and load management costs not recovered through base rates. 
These schedules, which require DPU approval, are estimated semi-annually and
include credits for gas pipeline refunds and profit margins applicable to
interruptible and other non-firm sales.  Actual gas costs are reconciled
annually as of October 31, and any difference is included as an adjustment in
the calculation of the decimals for the two subsequent six-month periods.

      The DPU and the Massachusetts Energy Facilities Siting Council (the
Council) were merged in 1992.  The Council is now a division of the DPU. 
Periodically, the Company is required to file a long-range forecast of the
energy needs and requirements of its market area and annual supplements
thereto with the Council.  To approve a long-range forecast, the Council must
find, among other things, that the Company's plans for construction of new gas
manufacturing or storage facilities and certain high-pressure gas pipelines
are consistent with current health, environmental protection, resource use and
development policies as adopted by the Commonwealth of Massachusetts.  The
Company filed a long-range forecast with the Council on July 20, 1990 and
updated aspects of the filing in March 1991.  This forecast was combined with
the DPU review of the ANE contract.  Both issues were approved by the DPU in
November 1995.

      (b) Gas Demand and Transition Costs

      The Company is obligated, as part of its pipeline transportation
contracts, storage contracts and gas purchase contracts, to pay monthly demand 
charges which are recovered from customers through the CGA.

      As a direct result of implementation of Order 636, most pipeline
companies are incurring transition costs which include the cost of
restructuring gas supply contracts, the value of facilities that were
supporting the gas sales function and are no longer used and useful for
transportation only services, the cost of contracts with upstream pipeline
companies and various miscellaneous costs.  For additional information on
these transition costs refer to Note 6(c) of Notes to Financial Statements
filed under Item 8 of this report.

      The Company is collecting all contract restructuring costs from its
customers through the CGA as permitted by the DPU.
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                           COMMONWEALTH GAS COMPANY

      (c) Regulatory Matters

      In May 1994, the Company requested the DPU to change the back-up service
charges under its firm transportation rate.  Back-up charges result when the
Company sells gas from its system supplies to a customer whose off-system gas
supply has failed or is temporarily unavailable for reasons beyond the
customer's control.  The change involved an upward indexing of backup charges
based on changes in the gas supply demand costs occasioned by Order 636.  On
December 22, 1994, the DPU approved the Company's requested change effective
January 1, 1995.  This change, which has no effect on revenue, results in a
more equitable recovery of pipeline capacity costs between Commonwealth Gas'
total requirements and transportation customers.

      (d) Quasi-firm and Off-system Gas Sales Services

      In late August 1994, the Company received regulatory approval for a new
quasi-firm sales service, designed for customers with dual-fuel capability,
that provides a level of service between full firm and interruptible.  In
exchange for prices lower than full firm service, quasi-firm customers receive
interruptible service in peak demand months and firm service in off-peak
months.  The Company sold 1,906 BBTU of gas to quasi-firm customers in 1995. 
Also in 1995, the Company was able to maximize the use of its gas supply
portfolio through off-system sales and capacity release.  In 1995, 4,043 BBTU
of gas was sold in the off-system market and 10,352 BBTU of pipeline capacity
was released.  These efforts helped to reduce the cost of gas to the Company's
firm customers while allowing more flexibility in supply management and
pricing options.

      A portion of the margins realized on quasi-firm and off-system sales
(approximately $2 million as of December 31, 1995) is currently being deferred
pending a ruling on a margin-sharing proposal filed with the DPU in December
1995 for quasi-firm sales.  A similar filing is expected to be filed for off-
system sales in 1996.  Both quasi-firm and off-system sales allow the Company
to more efficiently utilize its gas distribution system and enable fixed costs
to be spread over larger volumes of throughput.  This results in a lower cost
of gas for firm customers helping the Company to remain as competitive as
possible in its traditional core market.

      (e) Conservation and Load Management Program

      The Company offers conservation measures to its residential and multi-
family customers through programs approved by the DPU in June 1992.  The
Company recovers the costs of these programs via separately stated
Conservation Charge (CC) decimals.  The programs have been extended through
subsequent DPU approvals, the most noteworthy being the settlement agreement
approved on November 23, 1994 which enabled the Company to recover "lost
margins" from customers effective January 1995.  Specifically, the settlement
allows the Company to remain whole while it offers programs that reduce sales,
by recovering through the CC decimal the portion of the lost margins revenue
associated with all saved therms resulting from conservation program
installations.  As a result, the Company collected $1.4 million in lost
margins during 1995, and has obtained approval to collect $2.1 million in lost
margins during 1996.
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                           COMMONWEALTH GAS COMPANY

      (f) Potential Impact of Regulatory Restructuring

      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 regula-
tory assets in cases where the DPU has permitted or is expected to permit
recovery of specific costs over time.  These regulatory assets amounted to $22
million (5.9% of total assets) as of December 31, 1995.  Similarly, the
regulatory liability established by the Company is required to be refunded to
customers over time.  In March 1995, the Financial Accounting Standards Board
issued 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.  Management does not expect that
the effects of SFAS No. 121, which the Company adopted on January 1, 1996,
will have a material impact on its financial position or results of
operations.

      Competition

      The Company faces competition from suppliers of fuel oil, propane and
electricity and also, for large commercial and industrial customers, from
other suppliers of natural gas.  The Company is continuously developing and
implementing strategies to deal with the increasingly competitive environment. 
Innovative pricing mechanisms have been developed and will continue to be
developed to retain existing customers, add new retail and wholesale customers
and expand beyond current markets.  Aggressive marketing efforts have
increased our residential heating customer base by more than 1,500 during
1995.  In addition, there are vast opportunities in natural gas engine-driven
cooling systems and absorption chillers which are being actively and
successfully pursued by the Company and will add desirable off-peak summer
load.  The Company has also expanded existing services such as the
merchandising of water-heaters and heating systems.

      FERC Order 636 marked the beginning of the deregulation and
restructuring of the natural gas industry.  In addition to opening up customer
markets to competition, the regulations shifted many supply-related
responsibilities to local distribution companies including direct gas
purchases from suppliers, pipelines and producers, transportation services and
storage services.  The Company has developed a gas control and information
system that has very sophisticated purchasing and tracking systems.  This
ability, coupled with aggressive planning and procurement strategies, will
help to secure the Company's existing market share and permit the expansion of
core and non-core supply capabilities.

      The Company's substantial LNG and storage capabilities provide it with
the reliability needed during the coldest winter days and the flexibility to
sell capacity when supply and pricing conditions are favorable.  Through
expanding non-firm and transportation sales, the Company has been able to
maximize the use of its gas supply and transportation system resulting in a
lower cost of gas for firm customers helping the Company to remain competitive
in its traditional markets.
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                           COMMONWEALTH GAS COMPANY

      The Company continues to reduce costs and improve service through state-
of-the-art technology.  Some of the examples of cost-effective technology
presently in use include: (1) Automated Meter Reading (AMR) which has
dramatically lowered meter reading costs, improved the rate at which meters
are read, and enhanced customer convenience.  To date, 80% of the Company's
meters are equipped with AMR technology and the read rate has improved to
nearly 100%; (2) a new trenchless technology that enables the Company to
maintain or upgrade its distribution system with a minimum of cost and
disturbance with a device known as a "bullet" that allows the replacement of
old gas lines with polyethylene pipe, eliminating the need for costly and
time-consuming street excavations; and (3) the use of a miniature camera that
inspects the inside walls of low pressure mains without interrupting service
to customers and replaces the more traditional method which involved costly
digging and manual inspection to find problem areas.

      Environmental Matters

      The Company is participating in the assessment of a number of former
manufactured gas plant (MGP) sites and alleged MGP waste disposal locations to
determine if and to what extent such sites have been contaminated and whether
the Company may be responsible for remedial actions.

      The costs associated with the assessment and clean-up of these sites are
recoverable in rates through the cost of gas adjustment clause pursuant to a
1990 DPU order over a seven-year amortization period without carrying costs. 
The Company has recorded a $2.6 million liability that reflects its best
estimate (based on current information) of the costs to be incurred in
connection with assessment and remediation activities identified to this
point.  The Company has also recorded a regulatory asset in anticipation of
recovery of these costs.  The Company is unable to predict the total cost to
ultimately resolve these matters due to significant uncertainty as to the
actual site conditions and the extent of any associated remediation activities
and the assignment of responsibility.  However, it is expected that all such
costs will continue to be recovered in rates as described above.

      The Company is also involved in certain other known or potentially
contaminated sites where the associated costs may not be recoverable in rates. 
In 1994 the Company recorded an estimated liability (and a charge to
operations) of $500,000 to cover the expected costs associated with assessment
and remediation activities.  These estimates are reviewed and adjusted
periodically as further investigation and assignment of responsibility occurs. 
As noted above, the Company is unable to estimate its ultimate liability for
future environmental remediation costs.  However, in view of the Company's
current assessment of its environmental responsibilities, existing legal
requirements and regulatory policies, management does not believe that these
matters will have a material adverse impact on the Company's results of
operations or financial position.

      Construction and Financing

      Information concerning the Company's financing and construction programs
is contained in Note 6(a) of the Notes to Financial Statements filed under
Item 8 of this report.
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                           COMMONWEALTH GAS COMPANY

      Employees

      The Company has 699 regular employees which is 3.3% lower than last
year's level.  Approximately 64% of these employees are represented by three
collective bargaining units with agreements in effect through March 31, 1996,
June 30, 1996 and September 18, 1998.  Employee relations have generally been
satisfactory.

Item 2.     Properties

      The Company's principal gas properties consist of distribution mains,
services and meters necessary to maintain reliable service to customers.  At
the end of 1995, the gas system included 2,778 miles of gas distribution
lines, 164,697 services and 240,948 customer meters together with the
necessary measuring and regulating equipment.

      In addition, the Company owns a central headquarters and service
building in Southborough, Massachusetts, five district office buildings and
various natural gas receiving and take stations. 

      The Company's property is subject to encumbrances under its Indenture of
Trust and First Mortgage Bonds.

Item 3.     Legal Proceedings

      The Company is not a party to any pending material legal proceeding.


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                           COMMONWEALTH GAS COMPANY


                                    PART II.


Item 5.     Market for the Registrant's Common Stock and Related Stockholder
            Matters

      (a)   Principal Market

            Not applicable.  The Company is a wholly-owned subsidiary of
            Commonwealth Energy System.

      (b)   Number of Shareholders at December 31, 1995

            One

      (c)   Frequency and Amount of Dividends Declared in 1995 and 1994

                       1995                               1994              
                                Per Share                           Per Share
            Declaration Date      Amount     Declaration Date         Amount 

            January 25, 1995      $1.75      January 24, 1994         $2.10
            April 21, 1995         2.65      April 21, 1994            2.50
                                  $4.40      July 15, 1994              .50
                                                                      $5.10

      (d)   Future dividends may vary depending upon the Company's earnings
            and capital requirements as well as financial and other conditions
            existing at that time.
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                           COMMONWEALTH GAS COMPANY

Item 7.     Management's Discussion and Analysis of Results of Operations

      The following is a discussion of certain significant factors which have
affected operating revenues, expenses and net income during the periods
included in the accompanying statements of income and is presented to
facilitate an understanding of the results of operations.  This discussion
should be read in conjunction with the Notes to Financial Statements filed
under Item 8 of this report.

      A summary of the period to period changes in the principal items
included in the accompanying statements of income for the years ended December
31, 1995 and 1994 and unit sales for these periods is shown below:


                                      Years Ended            Years Ended
                                      December 31,           December 31,
                                     1995 and 1994          1994 and 1993
                                              Increase (Decrease)
                                             (Dollars in Thousands)

Gas Operating Revenues            $(16 804)    (5.2)%     $21 597       7.1 %

Operating Expenses - 
  Cost of gas sold                 (19 657)   (10.4)       21 162      12.6
  Other operation
    and maintenance                 (2 756)    (3.1)        2 745       3.3
  Depreciation                          97      1.0           620       6.9
  Taxes -
    Federal and state income         1 686     21.1        (1 860)    (18.9)
    Local property                     462      8.7           471       9.7
    Payroll and other                  103      3.8           (64)     (2.3)
                                   (20 065)    (6.6)       23 074       8.3

Operating Income                     3 261     13.8        (1 477)     (5.9)

Other Income                           812    192.9          (216)    (33.9)

Income Before Interest Charges       4 073     16.9        (1 693)     (6.6)

Interest Charges                     1 412     13.4         1 038      10.9

Net Income                         $ 2 661     19.6       $(2 731)    (16.8)



Unit Sales (BBTU)

  Firm                                 (81)    (0.2) %       (680)     (1.7)%
  Interruptible                     (1 437)   (52.0)          302      12.3
  Off-system                        (2 358)   (36.8)        6 401       -  
  Quasi-firm                         1 419    291.4           487       -  
                                    (2 457)    (5.1)        6 510      15.6
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                           COMMONWEALTH GAS COMPANY

The following is a summary of unit sales, transportation volume and customers
for the periods indicated:
                                              Years Ended December 31,   
                                            1995        1994        1993

Unit Sales (BBTU):
  Residential                              21 336      21 515      22 252
  Commercial                               10 710      10 728      10 931
  Industrial                                4 445       4 401       4 205
  Other                                     1 967       1 895       1 831
    Total firm                             38 458      38 539      39 219
  Off-System                                4 043       6 401         -  
  Quasi-Firm                                1 906         487         -  
  Interruptible                             1 324       2 761       2 459
    Total sales                            45 731      48 188      41 678
  Transportation                            6 791       3 003       3 171
    Total                                  52 522      51 191      44 849

Customers at End of Period:
  Residential                             212 329     211 075     211 877
  Commercial                               18 761      18 466      18 323
  Industrial                                  933         928         920
  Other                                     1 168       1 140       1 093
    Total                                 233 191     231 609     232 213

Operating Revenues, Cost of Gas Sold and Unit Sales

      In 1995, operating revenues decreased by $16.8 million or 5.2% mainly
due to a decrease in the cost of gas sold ($19.7 million), lower conservation
and load management (C&LM) costs ($910,000) and a decrease in unit sales. 
Partially offsetting these decreases were higher transportation revenues ($2.3
million).  In 1994, operating revenues increased by $21.6 million or 7.1%
mainly due to a $21 million increase in the cost of gas sold, revenues
associated with off-system and quasi-firm sales, which were non-existent in
1993, and higher transportation revenues ($478,000).  Also contributing to the
increase were higher C&LM costs ($2.6 million).  Partially offsetting these
increases was a decrease in firm unit sales of 1.7%.

      The cost of gas sold in 1995 and 1994 reflects prices and sales levels
as well as the amortization of Order 636 transition costs ($1.3 million in
1995, $3.6 million in 1994 and $396,000 in 1993) and refunds received from gas
suppliers ($9.1 million in 1995, $6.1 million in 1994 and $7 million in 1993).

      Despite extremely mild weather conditions experienced throughout the
region during the first quarter of 1995, a very cold fourth quarter left unit
sales virtually unchanged for the year.  Firm unit sales decreased by 1.7% in
1994 due to the unseasonably warm weather conditions experienced throughout
the region in the fourth quarter.  This more than offset a 5.4% increase in
the first quarter of 1994 resulting from the colder than normal weather. 
Interruptible sales decreased by 52% in 1995 and increased by approximately
12% in 1994 reflecting the competitive market conditions for energy resources
that exists today as well as the conversion of interruptible sales to quasi-
firm.  Interruptible sales have no impact on net income since all of the
margins from these sales are flowed back to firm customers through the CGA.
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                           COMMONWEALTH GAS COMPANY

      Off-system sales and quasi-firm sales fluctuated but are expected to
continue as important elements of the Company's total gas service options. 
The Company anticipates that the aforementioned margin-sharing proposal for
these sales will have a positive impact on earnings while continuing to reduce
the cost of gas to firm customers.

      The customer level increased slightly in 1995 mainly due to new home
construction and conversion activity and was virtually unchanged in 1994.

Other Operating Expenses

      In 1995, other operation and maintenance decreased by $2.8 million or
3.1% mainly due to lower C&LM costs ($910,000), lower distribution expenses
due to fewer leak repair activities ($699,000), a decreased provision for bad
debts ($640,000), lower insurance and employee benefit costs ($471,000) and
decreased engineering expenses ($392,000).  Also contributing to the decrease
was net savings in several areas resulting primarily from the implementation
of automated meter reading (AMR) ($100,000).  These decreases were partially
offset by increased labor costs ($1.2 million).

      Other operation and maintenance increased by approximately 3.3%, or
$2.7 million, in 1994 due mainly to higher C&LM charges ($2.6 million) and
higher insurance and employee benefit costs ($821,000).  These increases were
offset, in part, by a decline in the cost of services rendered by affiliate
COM/Energy Services Company attributable to a second quarter 1993 work force
reduction and a 2% ($683,000) decline in payroll costs reflecting a lower work
force level achieved through attrition and reduced overtime.

Depreciation and Taxes

      The increase in depreciation expense in both 1995 and 1994 resulted
from higher levels of depreciable plant-in-service.

      The increase in federal and state income taxes in 1995 and the decrease
in 1994 was due to the respective levels of pretax income.  The change in
payroll and other taxes in both periods reflects the level of payroll costs in
each period.  The increase in local property taxes during both 1995 and 1994
was due to higher tax rates and assessments in the Company's service
territory.

Other Income and Interest Charges

      In 1995, other income increased by $812,000 due primarily to interest
income received by the Company in connection with its participation in the
COM/Energy Money Pool.  Other income decreased by $216,000 in 1994 due
primarily to the absence of a litigation settlement received in 1993
($193,000) and lower sales of design heating systems offset, in part, by
interest related to a Massachusetts sales tax abatement ($58,000).

      Total interest charges increased by $1.4 million in 1995 mainly due to
higher interest on deferred gas costs partially offset by a decrease in short-
term interest charges reflecting lower levels of debt.
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<PAGE 14>

                           COMMONWEALTH GAS COMPANY

      Total interest charges increased by more than $1 million in 1994 mainly
due to the issuance of $35 million in new long-term debt in December 1993 and,
to a lesser extent, higher interest rates and interest to be refunded to the
Company's customers in connection with the aforementioned sales tax abatement. 
These increases were partially offset by a lower average level of short-term
borrowings.

Item 8. Financial Statements and Supplementary Data

        The Company's financial statements required by this item are filed
herewith on pages 15 through 33 of this report.

Item 9. Changes in and Disagreements with Accountants on Accounting
        and Financial Disclosure

        None.
<PAGE>
<PAGE 15>

                           COMMONWEALTH GAS COMPANY
                        FORM 10-K    DECEMBER 31, 1995

Item 8. Financial Statements and Supplementary Data

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
  of Commonwealth Gas Company:

        We have audited the accompanying balance sheets of COMMONWEALTH GAS
COMPANY (a Massachusetts corporation and wholly-owned subsidiary of
Commonwealth Energy System) as of December 31, 1995 and 1994, and the related
statements of income, retained earnings and cash flows for each of the three
years in the period ended December 31, 1995.  These financial statements and
the schedule referred to below are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.

        We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

        In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Commonwealth Gas
Company as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting prin-
ciples.

        Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole.  The schedule listed in the index
to financial statements and schedule is presented for purposes of complying
with the Securities and Exchange Commission's rules and is not part of the
basic financial statements.  This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required
to be set forth therein in relation to the basic financial statements taken as
a whole.



                                                      ARTHUR ANDERSEN LLP

Boston, Massachusetts
February 16, 1996.
<PAGE>
<PAGE 16>

                           COMMONWEALTH GAS COMPANY
                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

                                   PART II.


FINANCIAL STATEMENTS

      Balance Sheets at December 31, 1995 and 1994

      Statements of Income for the Years Ended December 31, 1995, 1994 and
      1993

      Statements of Retained Earnings for the Years Ended December 31, 1995,
      1994 and 1993

      Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and
      1993

      Notes to Financial Statements


                                   PART IV.


SCHEDULE

      II    Valuation and Qualifying Accounts for the Years Ended December 31,
            1995, 1994 and 1993

SCHEDULES OMITTED

      All other schedules are not submitted because they are not applicable or
      not required or because the required information is included in the
      financial statements or notes thereto.
<PAGE>
<PAGE 17>

                           COMMONWEALTH GAS COMPANY
                                BALANCE SHEETS
                          DECEMBER 31, 1995 AND 1994
                                    ASSETS



                                                          1995        1994
                                                      (Dollars in Thousands)

PROPERTY, PLANT AND EQUIPMENT, at original cost         $348 284   $339 476
  Less - Accumulated depreciation                         92 881     85 162
                                                         255 403    254 314
  Add - Construction work in progress                        738        719
                                                         256 141    255 033

CURRENT ASSETS
  Cash                                                     2 113      4 862
  Accounts receivable -
    Affiliated companies                                     188        462
    Customers, less reserves of $2,691,000 in 1995
      and $2,827,000 in 1994                              40 317     32 890
  Unbilled revenues                                       22 850     20 892
  Inventories, at average cost -
    Natural gas                                           17 339     24 161
    Materials and supplies                                 1 286      1 593
  Prepaid taxes -
    Property                                               3 094      2 861
    Income                                                   384        619
  Other                                                    1 138      1 076
                                                          88 709     89 416

DEFERRED CHARGES
  Order 636 transition costs                              11 711     19 201
  Other                                                   18 054     17 155
                                                          29 765     36 356

                                                        $374 615   $380 805















  The accompanying notes are an integral part of these financial statements.



<PAGE>
<PAGE 18>

                           COMMONWEALTH GAS COMPANY
                                BALANCE SHEETS
                          DECEMBER 31, 1995 AND 1994
                        CAPITALIZATION AND LIABILITIES

                                                        1995          1994
                                                     (Dollars in Thousands)
CAPITALIZATION
  Common Equity -
    Common stock, $25 par value -
      Authorized and outstanding - 
        2,857,000 shares, wholly-owned
        by Commonwealth Energy
        System (Parent)                              $ 71 425      $ 71 425
    Amounts paid in excess of par value                27 739        27 739
    Retained earnings                                  10 495         6 837
                                                      109 659       106 001
  Long-term debt, less maturing issues and
    current sinking fund requirements                  78 100        91 750
                                                      187 759       197 751

CURRENT LIABILITIES
  Interim Financing -
    Notes payable to banks                             12 200        24 950
    Advances from affiliates                            1 850        11 220
    Maturing long-term debt                            10 000            - 
                                                       24 050        36 170

  Other Current Liabilities -
    Current sinking fund requirements                   3 650         3 650
    Accounts payable -
      Affiliated companies                              2 229         2 669
      Other                                            37 471        33 214
      Refundable gas costs                             33 034        27 832
    Customer deposits                                   1 354         1 433
    Accrued local property and other taxes              3 435         3 317
    Accrued interest                                    1 938           749
    Other                                               3 535         4 746
                                                       86 646        77 610
                                                      110 696       113 780
DEFERRED CREDITS
  Accumulated deferred income taxes                    35 586        32 699
  Unamortized investment tax credits                    5 862         6 065
  Order 636 transition costs                           11 711         7 811
  Other                                                23 001        22 699
                                                       76 160        69 274
COMMITMENTS AND CONTINGENCIES
                                                     $374 615      $380 805







  The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 19>

                           COMMONWEALTH GAS COMPANY
                             STATEMENTS OF INCOME
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993



                                                1995       1994        1993
                                                    (Dollars in Thousands)

  GAS OPERATING REVENUES                     $308 922    $325 726   $304 129

  OPERATING EXPENSES
    Cost of gas sold                          169 112     188 769    167 607
    Other operation                            72 138      74 636     71 776
    Maintenance                                11 577      11 809     11 929
    Depreciation                                9 656       9 559      8 939
    Amortization                                1 212       1 238      1 233
    Taxes -
      Income                                    9 669       7 983      9 843
      Local property                            5 798       5 336      4 865
      Payroll and other                         2 818       2 715      2 779
                                              281 980     302 045    278 971

  OPERATING INCOME                             26 942      23 681     25 158

  OTHER INCOME                                  1 233         421        637

  INCOME BEFORE INTEREST CHARGES               28 175      24 102     25 795

  INTEREST CHARGES
    Long-term debt                              8 174       8 488      6 345
    Other interest charges                      3 827       2 073      3 170
    Allowance for borrowed funds used
      during construction                         (55)        (27)       (19)
                                               11 946      10 534      9 496

  NET INCOME                                 $ 16 229    $ 13 568   $ 16 299


















  The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 20>

                           COMMONWEALTH GAS COMPANY
                        STATEMENTS OF RETAINED EARNINGS
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993




                                               1995       1994       1993
                                                  (Dollars in Thousands)

  Balance at beginning of year               $ 6 837     $ 7 840   $ 6 994

  Add (Deduct):
    Net income                                16 229      13 568    16 299
    Cash dividends on common stock           (12 571)    (14 571)  (15 453)

  Balance at end of year                     $10 495     $ 6 837   $ 7 840






































  The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 21>

                           COMMONWEALTH GAS COMPANY
                           STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

                                                   1995      1994      1993
                                                    (Dollars in Thousands)
OPERATING ACTIVITIES
  Net income                                     $16 229    $13 568  $16 299
  Effects of noncash items -
    Depreciation and amortization                 12 983     15 159   11 363
    Deferred income taxes                         (4 026)     3 883    8 018
    Investment tax credits                          (203)      (205)    (210)
  Change in working capital exclusive
      of cash and interim financing -
    Accounts receivable and unbilled
      revenues                                    (9 111)     8 063   (4 714)
    Prepaid income taxes                             235      1 193    4 878
    Local property and other taxes, net             (115)       145       57
    Accounts payable and other                    15 985     17 925   (6 873)
  Deferred postretirement benefit costs           (2 376)    (2 306)  (3 062)
  Transition costs, net                           11 390     (2 585)  (8 805)
  All other operating items                       10 908     (7 393)  (9 065)
Net cash provided by operating activities         51 899     47 447    7 886

INVESTING ACTIVITIES
  Additions to property, plant and
    equipment (exclusive of AFUDC)               (16 252)   (17 994) (23 272)
  Allowance for borrowed funds used
    during construction                              (55)       (27)     (19)
Net cash used for investing activities           (16 307)   (18 021) (23 291)

FINANCING ACTIVITIES
  Sale of common stock to Parent                      -          -    18 000
  Payment of dividends                           (12 571)   (14 571) (15 453)
  Payment of short-term borrowings               (12 750)   (16 025) (11 500)
  Proceeds from (payment of) affiliate
     borrowings                                   (9 370)     8 385   (5 705)
  Retirement of long-term debt
    through sinking funds                         (3 650)    (3 650)  (3 650)
  Long-term debt issue                                -          -    35 000
Net cash provided by (used for)
  financing activities                           (38 341)   (25 861)  16 692

Net increase (decrease) in cash                   (2 749)     3 565    1 287
Cash at beginning of period                        4 862      1 297       10
Cash at end of period                            $ 2 113    $ 4 862  $ 1 297

Supplemental Disclosures of Cash Flow Information
  Cash paid during the period for:
    Interest (net of amounts capitalized)        $11 035    $ 9 799  $ 8 797
    Income taxes                                 $ 8 118    $ 4 636  $ 3 133

  The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE 22>

                           COMMONWEALTH GAS COMPANY
                         NOTES TO FINANCIAL STATEMENTS

(1) General Information

    Commonwealth Gas Company (the Company) is a wholly-owned subsidiary of
  Commonwealth Energy System.  The parent company is referred to in this
  report as the "System" and, together with its subsidiaries, is 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 companies and several non-regulated companies.

    The Company is engaged in the distribution and sale of natural gas at
  retail to approximately 233,000 customers in a 1,067 square-mile area which
  includes 49 communities in eastern, southeastern and central Massachusetts
  including New Bedford, Cambridge, Plymouth and Worcester.  The approximate
  year-round population of this service area is 1,128,000.

    The Company has 699 regular employees including 447 (64%) who are repre-
  sented by three collective bargaining units.  Agreements with two units
  representing approximately 63% of regular employees are scheduled to expire
  in 1996.  Employee relations have generally been satisfactory.

(2) Significant Accounting Policies

  (a) Principles of Accounting

    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.

    Certain prior year amounts are reclassified from time to time to conform
  with the presentation used in the current year's financial statements.

  (b) Regulatory Assets and Liabilities

    The Company is regulated as to rates, accounting and other matters by 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 has permitted or is
  expected to permit recovery of specific costs over time.  Similarly, the
  regulatory liability established by the Company is required to be refunded
  to customers over time.  In March 1995, the Financial Accounting Standards
  Board issued 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.  Management does
  not expect that the effects of SFAS No. 121, which the Company adopted on
<PAGE>
<PAGE 23>

                           COMMONWEALTH GAS COMPANY

 January 1, 1996, will have a material impact on its financial position or
 results of operations.

    The principal regulatory assets included in deferred charges at
 December 31, 1995 and 1994 were as follows:
                                                         1995        1994
                                                      (Dollars in Thousands)

      Transition costs                                $11 711      $19 201
      Postretirement benefit costs including
        pensions                                        7 744        5 367
      Environmental costs                               2 551        2 346
        Total regulatory assets                       $22 006      $26 914

      The principal regulatory liability, reflected in deferred credits-other
 and relating to income taxes, was $8.6 million and $9.9 million at
 December 31, 1995 and 1994, respectively.

 (c) Transactions with Affiliates

      Operating revenues include sales of gas to affiliate Cambridge Electric
 Light Company as follows:
                                         (Dollars in Thousands)
                                       1995      1994        1993

        Cost                           $  289    $1 493     $1 311
        Margin                             64       220         76
        Total                          $  353    $1 713     $1 387

      The margin realized on these sales is credited to firm customers through
 the Cost of Gas Adjustment (CGA).

      Other intercompany transactions include payments by the Company for
 management, accounting, data processing and other services provided by
 COM/Energy Services Company.  In addition, the Company incurred costs paid to
 affiliate Hopkinton LNG Corp. for liquefaction and vaporization services that
 amounted to $9,988,000, $10,126,000 and $9,587,000 in 1995, 1994 and 1993,
 respectively.  Transactions with system companies are subject to review by
 the DPU.

 (d) Operating Revenues

      Customers are billed for their use of gas on a cycle basis throughout
 the month.  To reflect revenues in the proper period, the estimated amount of
 unbilled sales revenue is recorded each month.

      The Company is permitted to bill customers currently for total gas
 costs, certain conservation and load management costs and environmental costs
 through adjustment clauses.  Amounts recoverable under the adjustment clauses
 are subject to review and adjustment by the DPU.

      The amount of such costs incurred by the Company but not yet reflected
 in customers' bills is recorded as unbilled revenues.  However, as of
 December 31, 1995 and 1994, the Company had overcollected $33,034,000 and
 $27,832,000, respectively, which is reflected as a liability in the
<PAGE>
<PAGE 24>

                           COMMONWEALTH GAS COMPANY

 accompanying balance sheets.  These overcollected amounts, which include
 interest, are returned to customers in subsequent months.

 (e) Depreciation

      Depreciation is provided using the straight-line method at rates
 intended to amortize the original cost and the estimated cost of removal less
 salvage of properties over their estimated economic lives.  The Company's
 composite depreciation rate, based on average depreciable property in
 service, was 2.90% in 1995, 2.98% in 1994 and 2.95% in 1993.

 (f) Maintenance

      Expenditures for repairs of property and replacement and renewal of
 items determined to be less than units of property are charged to maintenance
 expense.  Additions, replacements and renewals of property considered to be
 units of property are charged to the appropriate plant accounts.  Upon
 retirement, accumulated depreciation is charged with the original cost of
 property units and the cost of removal less salvage.

 (g) Allowance for Funds Used During Construction

      Under applicable rate-making practices, the Company is permitted to
 include an allowance for funds used during construction (AFUDC) as an element
 of its depreciable property costs.  This allowance is based on the amount of
 construction work in progress that is not included in the rate base on which
 the Company earns a return.  An amount equal to the AFUDC capitalized in the
 current period is reflected in the accompanying statements of income.

      While AFUDC does not provide funds currently, these amounts are
 recoverable in revenues over the service life of the constructed property. 
 The amount of AFUDC recorded was at a weighted average rate of 6.50% in 1995,
 4.75% in 1994 and 3.50% in 1993.

(3)  Income Taxes

      For financial reporting purposes, the Company provides federal and state
 income taxes on a separate return basis.  However, for federal income tax
 purposes, the Company's taxable income and deductions are included in the
 consolidated income tax return of the System, and it makes tax payments or
 receives refunds on the basis of its tax attributes in the tax return in
 accordance with applicable regulations.
<PAGE>
<PAGE 25>

                           COMMONWEALTH GAS COMPANY

      The following is a summary of the provisions for income taxes for the
 years ended December 31, 1995, 1994 and 1993:

                                                1995      1994      1993
                                                (Dollars in Thousands)
      Federal -
        Current                               $11 602    $3 585    $1 619
        Deferred                               (3 155)    3 405     6 956
        Investment tax credits                   (203)     (205)     (210)
                                                8 244     6 785     8 365

      State -
        Current                                 2 296       720       416
        Deferred                                 (618)      667     1 278
                                                1 678     1 387     1 694
                                                9 922     8 172    10 059
      Amortization of regulatory liability
       relating to deferred income taxes         (253)     (189)     (216)

      Total federal and state
        income taxes                          $ 9 669   $ 7 983   $ 9 843

      Deferred tax liabilities and assets are determined based on the
 difference between the financial statement basis and tax basis of assets and
 liabilities using enacted tax rates in effect in the year in which the
 differences are expected to reverse.

      Accumulated deferred income taxes consisted of the following in 1995 and
 1994:
                                                    1995      1994
                                                (Dollars in Thousands)
      Liabilities
        Property-related                          $42 361    $39 768
        Transition costs, net                         -        4 094
        Postretirement benefits plan                2 933      2 101
        All other                                   1 734      3 075
                                                   47 028     49 038

      Assets
        Investment tax credit                       3 783      3 914
        Pension plan                                3 099      2 739
        Regulatory liability                        2 992      3 155
        Inventory repricing                         4 047      4 285
        All other                                   3 707      2 828
                                                   17 628     16 921
      Accumulated deferred income taxes, net      $29 400    $32 117

      The net year-end deferred income tax liability above is net of current
 deferred tax assets of $6,186,000 in 1995 and $582,000 in 1994 which are
 included in other deferred charges in the accompanying balance sheets.
<PAGE>
<PAGE 26>

                           COMMONWEALTH GAS COMPANY

      The total income tax provision set forth on the previous page
 represents 37% in 1995, 37% in 1994 and 38% in 1993 of income before such
 taxes.  The following table reconciles the statutory federal income tax rate
 to these percentages:

                                                    1995      1994      1993

 Federal statutory rate                              35%       35%       35%

 Federal income tax expense at statutory levels    $9 064    $7 543   $9 150
 Increase (Decrease) from statutory rate:
   State tax net of federal tax benefit             1 091       902    1 101
   Amortization of investment tax credits            (203)     (205)    (210)
   Amortization of excess deferred reserves          (253)     (189)    (216)
   Other                                              (30)      (68)      18
                                                   $9 669    $7 983  $ 9 843

 Effective federal tax rate                          37%       37%      38%

(4)  Long-Term Debt and Interim Financing

 (a) Long-Term Debt

      Long-term debt outstanding, exclusive of current maturities and current
 sinking fund requirements, collateralized by substantially all of the
 Company's property, is as follows:

                                          Original    Balance December 31,
                                           Issue        1995        1994
                                              (Dollars in Thousands)
      First Mortgage Bonds -
        8.99%,  Series H, due 1996         $10 000     $   -       $10 000
        8.99%,  Series I, due 2001          40 000      18 100      21 750
        9.95%,  Series J, due 2020          25 000      25 000      25 000
        7.11%,  Series K, due 2033          35 000      35 000      35 000
                                                       $78 100     $91 750

      Under terms of its indenture, the Company is required to make periodic
 sinking fund payments for retirement of outstanding long-term debt.  The
 Company may purchase its outstanding bonds in advance of sinking fund
 requirements under favorable conditions.  The required sinking fund payments
 and balances of maturing debt issues for the five years subsequent to
 December 31, 1995 are as follows:

                     Sinking Fund      Maturing Debt
          Year       Requirements         Issues          Total 
                             (Dollars in Thousands)

          1996          $3 650           $10 000         $13 650
          1997           3 650               -             3 650
          1998           3 650               -             3 650
          1999           3 650               -             3 650
          2000           3 650               -             3 650
<PAGE>
<PAGE 27>

                           COMMONWEALTH GAS COMPANY

 (b) Notes Payable to Banks

      The Company and other system companies maintain both committed and
 uncommitted lines of credit for the short-term financing of their
 construction programs, on a short-term basis, and for other corporate
 purposes.  As of December 31, 1995, system companies had $80 million of
 committed lines that will expire at varying intervals in 1996.  These lines
 are normally renewed upon expiration and require annual fees up to .1875% of
 the individual line.  At December 31, 1995, the uncommitted lines of credit
 totaled $70 million.  Interest rates on the outstanding borrowings generally
 are at an adjusted money market rate and averaged 6.1% and 4.4% in 1995 and
 1994, respectively.  The Company's notes payable to banks totaled $12,200,000
 and $24,950,000 at December 31, 1995 and 1994, respectively.

 (c) Advances from Affiliates

      The Company had short-term notes payable to the System totaling
 $1,425,000 and $2,935,000 at December 31, 1995 and 1994, respectively.  These
 notes are written for a term of up to 11 months and 29 days.  Interest is at
 the prime rate and is adjusted for changes in that rate during the term of
 the notes.  This rate averaged 8.8% and 7.3% in 1995 and 1994, respectively.

      The Company is a member of the COM/Energy Money Pool (the Pool), an
 arrangement among the subsidiaries of the System, whereby short-term cash
 surpluses are used to help meet the short-term borrowing needs of the utility
 subsidiaries.  In general, lenders to the Pool receive a higher rate of
 return than they otherwise would on such investments, while borrowers pay a
 lower interest rate than those available from banks.  Interest rates on the
 outstanding borrowings are based on the monthly average rate the Company
 would otherwise have to pay banks, less one-half the difference between that
 rate and the monthly average U.S. Treasury Bill weekly auction rate.  The
 borrowings are for a period of less than one year and are payable upon
 demand.  Rates on these borrowings averaged 5.8% and 4.3% in 1995 and 1994,
 respectively.  The Company had borrowings from the Pool of $425,000 and
 $8,285,000 at December 31, 1995 and 1994, respectively.

 (d) Disclosures about Fair Value of Financial Instruments

      The fair value of certain financial instruments included in the
 accompanying balance sheets as of December 31, 1995 and 1994 are as follows:

                                  1995                  1994   
                                     (Dollars in Thousands)

                           Carrying    Fair       Carrying    Fair  
                             Value    Value         Value    Value  

      Long-Term Debt        $91 750  $103 055      $95 400  $ 93 134

      The carrying amount of cash, notes payable to banks and advances from
 affiliates approximates the fair value because of the short maturity of these
 financial instruments.
<PAGE>
<PAGE 28>

                           COMMONWEALTH GAS COMPANY

      The estimated fair value of long-term debt is based on quoted market
 prices of the same or similar issues or on the current rates offered for debt
 with the same remaining maturity.  The fair values shown above do not purport
 to represent the amounts at which those obligations would be settled.

(5)  Employee Benefit Plans

 (a) Pension

      The Company has a noncontributory pension plan covering substantially
 all regular employees who have attained the age of 21 and have completed one
 year of service.  Pension benefits are based on an employee's years of
 service and compensation.  The Company makes monthly contributions to the
 plan consistent with the funding requirements of the Employee Retirement
 Income Security Act of 1974.

      Components of pension expense and related assumptions to develop pension
 expense were as follows:
                                                 1995       1994       1993
                                                  (Dollars in Thousands)

      Service cost                            $  1 912   $  2 278   $  1 904
      Interest cost                              7 094      6 378      6 037
      Return on plan assets - (gain)/loss      (18 598)     1 345    (10 821)
      Net amortization and deferral             12 909     (6 297)     6 317
      Total pension expense                      3 317      3 704      3 437
      Transfers from affiliated
        companies, net                             463        478        453
      Less: Amounts capitalized
            and deferred                           342        336        328
      Net pension expense                     $  3 438   $  3 846   $  3 562


 Discount rate                                   8.50%      7.25%      8.50%
 Assumed rate of return                          9.00       8.50       8.50 
 Rate of increase in future compensation         5.00       4.50       5.50 
<PAGE>
<PAGE 29>

                           COMMONWEALTH GAS COMPANY

      Pension expense reflects the use of the projected unit credit method
 which is also the actuarial cost method used in determining future funding of
 the plan.  The funded status of the Company's pension plan (using a
 measurement date of December 31) is as follows:

                                                  1995         1994
                                                (Dollars in Thousands)
      Accumulated benefit obligation:
        Vested                                  $(71 818)    $(58 636)
        Nonvested                                 (7 805)      (6 767)
                                                $(79 623)    $(65 403)

      Projected benefit obligation              $(96 032)    $(81 747)
      Plan assets at fair market value            91 168       75 568
      Projected benefit obligation
        greater than plan assets                  (4 864)      (6 179)
      Unamortized transition obligation            3 717        4 336
      Unrecognized prior service cost              5 327        5 830
      Unrecognized gain                          (10 685)      (9 934)
      Accrued pension liability                 $ (6 505)    $ (5 947)

      The following actuarial assumptions were used in determining the plan's
year-end funded status:
                                                    1995         1994

      Discount rate                                 7.25%        8.50%
      Rate of increase in future compensation       4.25         5.00

      Plan assets consist primarily of fixed-income and equity securities. 
 Fluctuations in the fair market value of plan assets will affect pension
 expense in future years.

 (b)  Other Postretirement Benefits

      Historically, the Company provided postretirement health care and life
 insurance benefits to eligible retired employees.  Employees became eligible
 for these benefits if their age plus years of service at retirement equaled
 75 or more, provided, however, that such service was performed for the
 Company or a subsidiary of the System.  As of January 1, 1993, the Company
 eliminated postretirement health care benefits for those non-bargaining
 employees who were less than 40 years of age or had less than 12 years of
 service at that date.  Under certain circumstances, eligible employees are
 now required to make contributions for postretirement benefits.  Certain
 bargaining employees are also participating under these new eligibility
 requirements.

      The Company adopted the provisions of Statement of Financial Accounting
 Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
 Than Pensions" (SFAS No. 106) as of January 1, 1993 and the cumulative effect
 of implementation of SFAS No. 106 was approximately $34 million, which is
 being amortized over 20 years.  Prior to 1993, the cost of postretirement
 benefits was recognized as the benefits were paid.
<PAGE>
<PAGE 30>

                           COMMONWEALTH GAS COMPANY

      The Company makes contributions to various voluntary employees'
 beneficiary association (VEBA) trusts that were established pursuant to
 section 501(c)(9) of the Internal Revenue Code (the Code).  The Company also
 makes contributions to a subaccount of its pension plan pursuant to section
 401(h) of the Code to satisfy a portion of its postretirement benefit
 obligation.  The Company contributed approximately $4.4 million and $4.5
 million to these trusts during 1995 and 1994, respectively.

      The net periodic postretirement benefit cost for the years ended
 December 31, 1995 and 1994 include the following components and related
 assumptions:

                                                     1995        1994
                                                  (Dollars in Thousands)

      Service cost                                 $   452     $   581
      Interest cost                                  2 848       2 572
      Return on plan assets                         (1 408)        (47)
      Amortization of transition obligation
        over 20 years                                1 700       1 700
      Net amortization and deferral                    811        (320)
         Total postretirement benefit cost           4 403       4 486
      Transfers to affiliated companies, net           524         539
      Less: Amounts capitalized and deferred         2 834       2 785
         Net postretirement benefit cost           $ 2 093     $ 2 240


      Discount rate                                   8.50%       7.25%
      Assumed rate of return                          9.00        8.50
      Rate of increase in future compensation         5.00        4.50

      The funded status of the Company's postretirement benefit plan using a
 measurement date of December 31, 1995 and 1994 is as follows:

                                                        1995        1994
                                                     (Dollars in Thousands)

      Accumulated postretirement benefit obligation:
        Retirees                                     $ (24 263)  $ (20 304)
        Fully eligible active plan participants         (3 848)     (4 060)
        Other active plan participants                 (11 318)    (10 082)
                                                       (39 429)    (34 446)
      Plan assets at fair market value                   9 086       5 681
      Accumulated postretirement benefit obligation
         greater than plan assets                      (30 343)    (28 765)
      Unamortized transition obligation                 28 904      30 604
      Unrecognized (gain) loss                           1 439      (1 839)
                                                     $     -     $     -  
<PAGE>
<PAGE 31>

                           COMMONWEALTH GAS COMPANY

      The following actuarial assumptions were used in determining the plan's
 estimated accumulated postretirement benefit obligation (APBO) and funded
 status for 1995 and 1994:

                                                        1995        1994

      Discount rate                                     7.25%       8.50%
      Rate of increase in future compensation           4.25        5.00
      Medicare part B premiums                         12.20%      12.30%
      Medical care                                      8.00        8.50
      Dental care                                       5.00        5.00

      The above rates, with the exception of the dental rate, which remains
 constant, decrease to five percent in the year 2007 and remain at that level
 thereafter.  A one percent change in the medical trend rate would have a
 $393,000 impact on the Company's annual expense and would change the APBO by
 approximately $4.3 million.

      Plan assets consist primarily of fixed-income and equity securities.
 Fluctuations in the fair market value of plan assets will affect post-
 retirement benefit expense in future years.

      The Company defers its SFAS No. 106 costs and intends to seek recovery
 in its next rate proceeding.  While the Company is unable to predict the
 outcome of this proceeding, it believes the DPU will authorize similar
 treatment as was provided to affiliate Cambridge Electric and other
 Massachusetts electric and gas companies for the recovery of the cost of
 these benefits.  Further, based on historical DPU action, the Company
 believes that it is appropriate to continue deferring the SFAS No. 106
 expense as a regulatory asset.  At December 31, 1995 and 1994, the Company's
 deferral amounted to approximately $7.7 million and $5.4 million.

 (c) Savings Plan

      The Company has an Employees Savings Plan that provides for Company
 contributions equal to contributions by eligible employees of up to four
 percent of each employee's compensation rate.  Effective January 1, 1993, the
 rate was increased to five percent for those employees no longer eligible for
 postretirement health benefits.  The Company's contribution was $1,439,000 in
 1995, $1,447,000 in 1994 and $1,444,000 in 1993.

(6)  Commitments and Contingencies

 (a) Construction and Financing Program

      The Company is engaged in a continuous construction program presently
 estimated at $92 million for the five-year period 1996 through 2000.  Of that
 amount, $17.7 million is estimated for 1996.  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, equipment
 delivery schedules, licensing delays, availability and cost of capital and
 environmental factors.  The Company expects to finance future expenditures on
 an interim basis with internally generated funds and short-term borrowings 
 which are ultimately expected to be repaid with the proceeds from the 
 issuance of long-term debt and/or equity securities.
<PAGE>
<PAGE 32>

                           COMMONWEALTH GAS COMPANY

 (b) LNG Service Contract

      The Company has contracted with Hopkinton LNG Corp., a wholly-owned
 subsidiary of the System, for liquefaction and vaporization services over a
 period ending in 1996, thereafter, renewable year to year with notice of
 termination due five years in advance.  The Company is obligated to pay
 demand charges throughout the contract periods in addition to charges for
 operating costs.

 (c)  FERC Order No. 636

      As a result of implementing FERC Order No. 636 (Order 636), each
 interstate pipeline company is allowed to collect certain transition costs
 from its customers that resulted from the pipelines' need to buy out gas
 supply contracts entered into prior to the issuance of Order 636.  The
 Company has been billed a total of approximately $23.8 million from Tennessee
 Gas Pipeline Company, Algonquin Gas Transmission Company and Texas Eastern
 Transmission Company through December 31, 1995.

      The Company's pipeline suppliers have made certain filings with the FERC
 for the collection of their respective transition costs.  The Company's
 current best estimate of the total remaining transition costs is
 approximately $11.7 million.  This balance has been recorded as a liability
 with a corresponding regulatory asset.  The ultimate level of costs is
 dependent upon future events, including the market price of natural gas and
 final settlements between the FERC and the pipeline suppliers.

      In May 1995, the DPU allowed the Company to accelerate recovery of its
 Order 636 transition costs that were incurred to date.  These costs had been
 deferred as a regulatory asset and were being recovered through the CGA over
 a four-year period that began in November 1993.  The costs are now being
 recovered through the CGA over a one-year period that began May 1, 1995.  The
 accelerated recovery was permitted by the DPU due to the minimal impact on
 customers' bills.  Any further transition costs are expected to be recovered
 by the Company through the CGA as incurred.

(7)   Gas Refunds

      During 1995, 1994 and 1993, the Company received refunds from its gas
 suppliers in settlement of several rate cases that had been pending before
 the FERC.  Operating revenues and the cost of gas sold have been reduced by
 the amounts refunded to firm customers totaling $9,061,000 in 1995,
 $6,077,000 in 1994 and $6,965,000 in 1993.

(8)   Lease Obligations

      The Company leases equipment and office space under arrangements that
 are classified as operating leases.  These lease agreements are for terms of
 one year or longer.  Leases currently in effect contain no provisions that
 prohibit the Company from entering into future lease agreements or
 obligations.
<PAGE>
<PAGE 33>

                           COMMONWEALTH GAS COMPANY

      Future minimum lease payments, by period and in the aggregate, of non-
 cancelable operating leases consisted of the following at December 31, 1995:

                                                   Operating Leases
                                                (Dollars in Thousands)

            1996                                       $ 3 070
            1997                                         1 699
            1998                                         1 084
            1999                                           531
            2000                                           347
            Beyond 2000                                  1 387
            Total future minimum lease payments        $ 8 118

      Total rent expense for all operating leases, except those with terms of
 a month or less, amounted to $3,626,000 in 1995, $3,699,000 in 1994 and
 $3,435,000 in 1993.  There were no contingent rentals and no sublease rentals
 for the years 1995, 1994 and 1993.

(9)   Environmental Matters

      The Company is subject to laws and regulations administered by federal,
 state and local authorities relating to the quality of the environment. 
 These regulations authorize federal and state regulatory agencies to identify
 and remediate hazardous waste sites and to seek recovery from statutorily
 liable parties (usually referred to as potentially responsible parties or
 PRPs), or to order these PRPs to undertake the clean-up themselves. (Refer to
 "Environmental Matters" filed under Item 1 of this report for additional
 information.)

















<PAGE>
<PAGE 34>

                           COMMONWEALTH GAS COMPANY

                                   PART IV.

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) 1.      Index to Financial Statements

            Financial statements and notes thereto of the Company together
            with the Report of Independent Public Accountants, are filed under
            Item 8 of this report and listed on the Index to Financial
            Statements and Schedules (page 14).

(a) 2.      Index to Financial Statement Schedules

            Filed herewith at page indicated is financial statement schedule
            of the Company:

            Schedule II - Valuation and Qualifying Accounts - Years Ended
            December 31, 1995, 1994 and 1993 (page 42).

(a) 3.      Exhibits:

                              Notes to Exhibits -

    a.      Unless otherwise designated, the exhibits listed below are
            incorporated by reference to the appropriate exhibit numbers and
            the Securities and Exchange Commission file numbers indicated in
            parentheses.

    b.      During 1981, New Bedford Gas and Edison Light Company sold its gas
            business and properties to the Company and changed its corporate
            name to Commonwealth Electric Company.

    c.      The following is a glossary of acronyms used throughout the
            Exhibit Index:
<PAGE>
<PAGE 35>

                           COMMONWEALTH GAS COMPANY

               AGT         Algonquin Gas Transmission Company
               CE          Commonwealth Electric Company
               CEC         Canal Electric Company
               CEL         Cambridge Electric Light Company
               CES         Commonwealth Energy System
               CG          Commonwealth Gas Company
               CNG         CNG Transmission Corporation
               CRC         Citizens Resources Corporation
               HOPCO       Hopkinton LNG Corp.
               NBGEL       New Bedford Gas and Edison Light Company
               TET         Texas Eastern Transmission Corporation
               TGP         Tennessee Gas Pipeline Company
               TGT         Tennessee Gas Transmission Corporation

                                Exhibit Index:

Exhibit 3.  Articles of incorporation and by-laws.

3.1.1       Articles of incorporation of CG (Exhibit 1 to the CG 1991 Form 10-
            K, File No. 2-1647).

3.1.2       By-laws of CG, as amended (Exhibit 2 to the CG 1992 Form 10-K,
            File No. 2-1647).

Exhibit 4.  Instruments defining the rights of security holders, including
            indentures.

4.1.        Indentures of Trust or Supplemental Indenture of Trust
            (as filed by the Registrant, except First Supplemental which was
            filed by the System)

    1.      Original Indenture on Form S-1 (Feb., 1949) (Exhibit 7(a), File
            No. 2-7820).
    2.      First Supplemental on Form S-1 (Mar., 1950) (Exhibit 7(a), File
            No. 2-8418).
    3.      Second Supplemental on Form S-1 (Nov., 1952) (Exhibit 4(a)(2),
            File No. 2-10445).
    4.      Third Supplemental on Form S-1 (Nov., 1952) (Exhibit 4(a)(3), File
            No. 2-10445).
    5.      Fourth Supplemental on Form S-9 (Oct. 1954) (Exhibit 2(b)(5), File
            No. 2-15089).
    6.      Fifth Supplemental on Form S-9 (Mar., 1956) (Exhibit 2(b)(6), File
            No. 2-15089).
    7.      Sixth Supplemental on Form S-9 (Apr., 1957) (Exhibit 2(b)(7), File
            No. 2-15089).
    8.      Seventh Supplemental on Form S-9 (June 1959) (Exhibit 2(b)(8),
            File No. 2-20532).
    9.      Eighth Supplemental on Form S-9 (Sept. 1961) (Exhibit 2(b)(9),
            File No. 2-20532).
    10.     Ninth Supplemental on Form 8-K (Aug. 1962) (Exhibit A, File No. 2-
            1647).
    11.     Tenth Supplemental on Form 10-K (1970) (Exhibit 2, File No. 2-
            1647).
<PAGE>
<PAGE 36>

                           COMMONWEALTH GAS COMPANY

    12.     Eleventh Supplemental on Form S-1 (June, 1972) (Exhibit 4(b)(2),
            File No. 2-48556).
    13.     Twelfth Supplemental on Form S-1 (Aug., 1973) (Exhibit     
            4(b)(3), File No. 2-48556).
    14.     Thirteenth Supplemental on Form 10-K (1992) (Exhibit 1, File No.
            2-1647).
    15.     Fourteenth Supplemental on Form 10-K (1990) (Exhibit 1, File No.
            2-1647).
    16.     Fifteenth Supplemental on Form 10-K (1982) (Exhibit 1, File No. 2-
            1647).
    17.     Sixteenth Supplemental on Form 10-K (1986) (Exhibit 1, File No. 2-
            1647).
    18.     Seventeenth Supplemental on Form 10-K (1990) (Exhibit 2, File No.
            2-1647).
    19.     Eighteenth Supplemental on Form 10-Q (March, 1994) (Exhibit 1,
            File No. 2-1647)

Exhibit 10. Material Contracts.

10.1.       Natural Gas Purchase Contracts.

10.1.3      Gas Service Contract between HOPCO and NBGEL dated September 1,
            1971 for the performance of liquefaction, storage and vaporization
            services and the operation and maintenance of an LNG Facility
            located at Acushnet, MA (Exhibit 8 to the CG 1984 Form 10-K, File
            No. 2-1647).

10.1.3.1    Supplement 1 to Gas Service Contract between HOPCO and NBGEL dated
            September 1, 1973 and September 14, 1977 (Exhibit 5(c)5 to the CES
            Form S-16 (June 1979), File No. 2-64731).

10.1.4      Gas Service Contract between HOPCO and CG dated September 1, 1971
            for the performance of liquefaction, storage and vaporization
            services and the operation of LNG facilities located in Hopkinton,
            MA (Exhibit 9 to the CG 1984 Form 10-K, File No. 2-1647).

10.1.4.1    Amendments to 10.1.3 and 10.1.4 as amended December 1, 1976
            (Exhibits 2 and 3 to the CG 1986 Form 10-K, File No. 2-1647).

10.1.4.2    Supplement 2 to 10.1.4 dated September 30, 1982 (Exhibit 2 to the
            CG 1992 Form 10-K, File No. 2-1647).

10.1.5      Supplement 1 to Gas Service Contract between HOPCO and CG dated
            September 14, 1977 (Exhibit 5(c)6 to the CES Form S-16 (June
            1979), File No. 2-64731).

10.1.6      Firm Storage Service Transportation Contract by and between TGT
            and CG providing for firm transportation of natural gas from
            Consolidated Gas Transmission Corporation dated December 15, 1985
            (Exhibit 1 to the CG 1985 Form 10-K, File No. 2-1647).

10.1.7      Agency Agreement for Certain Transportation Arrangements by and
            between CG and CRC whereby CRC arranges for a third party
            transportation of natural gas acquired by CG dated April 14, 1986
            (Exhibit 1 to the CG Form 10-Q (June 1986), File No. 2-1647).
<PAGE>
<PAGE 37>

                           COMMONWEALTH GAS COMPANY

10.1.8      Natural Gas Sales Agreement between CG and CRC dated April 14,
            1986 (Exhibit 2 to the CG Form 10-Q (June 1986), File No. 2-1647).

10.1.9      Gas Sales Agreement by and between Enron Gas Marketing, Inc. and
            CG relating to the sale and purchase of natural gas on an
            interruptible basis, dated June 17, 1986 (Exhibit 3 to the CG Form
            10-Q (June 1986), File No. 2-1647).

10.1.10     Agency Agreement for Certain Transportation Arrangements dated
            June 18, 1985 and Gas Purchase and Sales Agreement dated August 6,
            1985 by and between CG and Tenngasco Corporation and other related
            entities (Exhibit 4 to the CG Form 10-Q (June 1986), File No. 2-
            1647).

10.1.11     Service Agreement dated December 14, 1985 and an amendment thereto
            dated May 15, 1986 by and between TET and CG to receive, transport
            and deliver to points of delivery natural gas for the account of
            the CG dated December 14, 1985 (Exhibit 5 to the CG Form 10-Q
            (June 1986), File No. 2-1647).

10.1.12     Gas Transportation Agreement by and between TET and CG to receive
            transport and deliver on an interruptible basis, certain
            quantities of natural gas for the account of CG dated January 31,
            1986 (Exhibit 6 to the CG Form 10-Q (June 1986), File No. 2-1647).

10.1.13     Gas Sales Agreement by and between Texas Eastern Gas Trading
            Company and CG providing for the sale of certain quantities of
            natural gas to CG dated May 15, 1986 (Exhibit 7 to the CG Form 10-
            Q (June 1986), File No. 2-1647).

10.1.14     Service Agreement Applicable to Rate Schedule F-2 between AGT and
            CG dated April 11, 1985 for the purchase of certain quantities of
            natural gas acquired by AGT from Consolidated Gas Supply
            Corporation (Exhibit 2 to the CG Form 10-Q (March 1987), File No.
            2-1647).

10.1.15     Service Agreement Applicable to Rate Schedule F-3 between AGT and
            CG dated April 11, 1985 for the purchase of certain quantities of
            natural gas acquired by AGT from National Fuel Gas Supply
            Corporation (Exhibit 3 to the CG Form 10-Q (March 1987), File No.
            2-1647).

10.1.16     Service Agreement Applicable to Rate Schedule F-4 between AGT and
            CG dated December 26, 1985 for the purchase of certain quantities
            of natural gas acquired by AGT from TET (Exhibit 4 to the CG Form
            10-Q (March 1987), File No. 2-1647).

10.1.17     Service Agreement Applicable to Rate Schedule TS-3 between TET and
            CG dated April 16, 1987 for Firm natural gas service (Exhibit 1 to
            the CG Form 10-Q (June 1987), File No. 2-1647).

10.1.18     Natural Gas Sales Agreement between Summit Pipeline and Producing
            Company and CG dated April 16, 1987 (Exhibit 2 to the CG Form 10-Q
            (June 1987), File No. 2-1647).
<PAGE>
<PAGE 38>

                           COMMONWEALTH GAS COMPANY

10.1.19     Natural Gas Sales Agreement between Natural Gas Supply Company and
            CG dated May 12, 1987 (Exhibit 3 to the CG Form 10-Q (June 1987),
            File No. 2-1647).

10.1.20     Natural Gas Sales Agreement between Stellar Gas Company and CG
            dated April 15, 1988 (Exhibit 1 to the CG Form 10-Q (March 1988),
            File No. 2-1647).

10.1.21     1986 Consolidating Supplement to CG Service Contract and NBGEL by
            and between CG and HOPCO dated December 31, 1986 amending and
            consolidating the CG Service Contract and the New Bedford Gas
            Service Contract both as amended December 1, 1976 and supplemented
            September 14, 1977 (Exhibit 2 to the CG Form 10-Q (March 1988),
            File No. 2 -1647).

10.1.22     Natural Gas Sales Agreement between Amalgamated Gas Pipeline
            Company and CG dated April 5, 1988 (Exhibit 1 to the CG Form 10-Q
            (June 1988), File No. 2-1647).

10.1.23     Natural Gas Sales Agreement between Gulf Ohio Pipeline Corporation
            and CG dated May 18, 1988 (Exhibit 2 to the CG Form 10-Q (June
            1988), File No. 2-1647).

10.1.24     Natural Gas Sales Agreement between Phillips Petroleum Company and
            CG dated May 18, 1988 (Exhibit 3 to the CG Form 10-Q (June 1988),
            File No. 2-1647).

10.1.25     Service Agreement dated May 19, 1988, by and between TET and CG,
            whereby TET agrees to receive, transport and deliver natural gas
            to CG (Exhibit 1 to the CG Form 10-Q (September 1988), File No. 2-
            1647).

10.1.26     Natural Gas Sales Agreement between TXO Gas Marketing Corp. and CG
            dated April 25, 1988 (Exhibit 1 to the CG 1988 Form 10-K, File No.
            2-1647).

10.1.27     Gas Transportation Agreement by and between AGT and CG to receive,
            transport and deliver certain quantities of natural gas on a firm
            basis for the account of CG dated December 1, 1988 (Exhibit 2 to
            the CG 1988 Form 10-K, File No. 2-1647).

10.1.28     Natural Gas Sales Agreement between Enermark Gas Gathering
            Corporation and CG dated January 6, 1989 (Exhibit 3 to the CG 1988
            Form 10-K, File No. 2-1647).

10.1.29     Gas Sales Agreement between BP Gas Inc. (seller) and CG
            (purchaser) for the purchase of spot market gas, dated March 31,
            1989 with a contract term of at least one year (Exhibit 1 to the
            CG Form 10-Q (March 1989), File No. 2 -1647).

10.1.30     Gas Sales Agreement between Tejas Power Corporation (seller) and
            CG (purchaser) for the purchase of spot market gas, dated February
            21, 1989 with a contract term of at least one year (Exhibit 2 to
            the CG Form 10-Q (March 1989), File No. 2-1647).
<PAGE>
<PAGE 39>

                           COMMONWEALTH GAS COMPANY

10.1.31     Gas Sales Agreement between Catamount Natural Gas, Inc. (seller)
            and CG (purchaser) for the purchase of spot market gas, dated
            April 5, 1988, with a contract term of at least one year (Exhibit
            1 to the CG Form 10-Q (June 1989), File No. 2-1647).

10.1.32     Gas Sales Agreement between Transco Energy Marketing Company
            (seller) and CG (purchaser) for the purchase of spot market gas,
            dated March 1, 1989, with a contract term of at least one year
            (Exhibit 2 to the CG Form 10-Q (June 1989), File No. 2-1647).

10.1.33     Gas Storage Agreement between Steuben Gas Storage Company and CG
            (customer) for the storage and delivery of customer's natural gas
            to and from underground gas storage facilities, dated May 23,
            1989, with a contract term of at least one year (Exhibit 4 to the
            CG Form 10-Q (June 1989), File No. 2-1647).

10.1.34     Gas Sales Agreement between V.H.C. Gas Systems, L.P. (seller) and
            CG (purchaser) for the purchase of spot market gas, dated June 2,
            1989, with a contract term of at least one year (Exhibit 3 to the
            CG Form 10-Q (June 1989), File No. 2-1647).

10.1.35     Gas Sales Agreement between End-Users Supply System (seller) and
            CG (purchaser) for the purchase of spot market gas, dated June 29,
            1989, with a contract term of at least one year (Exhibit 1 to the
            CG Form 10-Q (September 1989), File No. 2-1647).

10.1.36     Gas Sales Agreement between Entrade Corporation (seller) and CG
            (purchaser) for the purchase of spot market gas, dated August 14,
            1989, with a contract term of at least one year (Exhibit 2 to the
            CG Form 10-Q (September 1989), File No. 2-1647).

10.1.36.1   Amendment to 10.1.36 dated August 28, 1989 (Exhibit 5 to the CG
            Form 10-Q (September 1989), File No. 2-1647).

10.1.37     Gas Sales Agreement between Fina Oil and Chemical Company (seller)
            and CG (purchaser) for the purchase of spot market gas, dated July
            10, 1989, with a contract term of at least one year (Exhibit 3 to
            the CG Form 10-Q (September 1989), File No. 2-1647).

10.1.38     Gas Sales Agreement between Mobil Natural Gas, Inc. (seller) and
            CG (purchaser) for the purchase of spot market gas, dated August
            14, 1989, with a contract term of at least one year (Exhibit 4 to
            the CG Form 10-Q (September 1989), File No. 2-1647).

10.1.39     Gas Sales Agreement between PSI, Inc. (seller) and CG (purchaser)
            for the purchase of spot market gas, dated September 25, 1989,
            with a contract term of at least one year (Exhibit 1 to the CG
            1989 Form 10-K, File No. 2-1647).
<PAGE>
<PAGE 40>

                           COMMONWEALTH GAS COMPANY

10.1.40     Gas Sales Agreement between Hadson Gas Systems (seller) and CG
            (purchaser) for the purchase of firm gas, dated August 15, 1990,
            with a contract term of at least six years (Exhibit 1 to the CG
            Form 10-Q (September 1990), File No. 2-1647).

10.1.41     Gas Sales Agreement between Odeco Oil Company (seller) and CG
            (purchaser) for the purchase of firm gas, dated August 15, 1990,
            with a contract term of at least five years (Exhibit 2 to the CG
            Form 10-Q (September 1990), File No. 2-1647).

10.1.42     AGT, CG, and Distrigas of Massachusetts Corporation have entered
            into an agreement in connection with the deliveries of regasified
            liquified natural gas into the Algonquin J-system dated August 1,
            1990 (Exhibit 3 to the CG Form 10-Q (September 1990), File No. 2-
            1647).

10.1.43     Gas Sales Agreement between TEX/CON Marketing Gas Company (seller)
            and CG (purchaser) for the purchase of firm gas, dated September
            12, 1990, with a contract term of five years (Exhibit 3 to the CG
            1990 Form 10-K, File No. 2-1647).

10.1.44     Transportation Agreement between AGT and CG to provide for firm
            transportation of natural gas on a daily basis, dated December 1,
            1988 (Exhibit 3 to the CG 1991 Form 10-K, File No. 2-1647).

10.1.45     Transportation Assignment Agreement between AGT and CG regarding
            Rate Schedule ATAP Agreement No. 9020016 which  provides for the
            assignment, on an interruptible basis, of firm service rights on
            TET's system under Rate Schedule FT-1, dated January 3, 1990, for
            a term ending October 31, 1999 (Exhibit 4 to the CG 1991 Form 10-
            K, File No. 2-1647).

10.1.46     Gas Sales Agreement between AGT and CG to reduce the volume of
            Rate Schedule F-1, dated October 15, 1990 (Exhibit 5 to the CG
            1991 Form 10-K, File No. 2-1647).

10.1.47     Transportation Agreement between AGT and CG for Rate Schedule AFT-
            1, Agreement No. 90103, dated November 1, 1990 (Exhibit 6 to the
            CG 1991 Form 10-K, File No. 2-1647).

10.1.48     Transportation Assignment Agreement between AGT and CG regarding
            Rate Schedule ATAP Agreement No. 90202, which provides for the
            assignment, on a firm basis, of firm service rights on TET's
            system under Rate Schedule FT-1, dated November 1, 1990 (Exhibit 7
            to the CG 1991 Form 10-K, File No. 2-1647).

10.1.49     Gas Sales Agreement Between TGP and CG under TGP's CD-6 Rate
            Schedules dated September 1, 1991, (Exhibit 8 to the CG 1991 Form
            10-K, File No. 2-1647).

10.1.50     Transportation Agreement between TGP and CG dated September 1,
            1991 (Exhibit 9 to the CG 1991 Form 10-K, File No. 2-1647).
<PAGE>
<PAGE 41>

                           COMMONWEALTH GAS COMPANY

10.1.51     Transportation Agreement between CNG and CG to provide for
            transportation of natural gas on a daily basis from Steuben Gas
            Storage Company to TGP, dated September 24, 1991 (Exhibit 10 to
            the CG 1991 Form 10-K, File No. 2-1647).

10.1.52     Service Line Agreement by and between CG and Milford Power Limited
            Partnership dated March 12, 1992 for a term ending January 1, 2013
            (Exhibit 1 to the CG Form 10-Q (March 1992), File No. 2-1647).

10.2        Other Agreements.

10.2.1      Pension Plan for Employees of Commonwealth Energy System and
            Subsidiary Companies as amended and restated January 1, 1993
            (Filed as Exhibit 1 to the System's Form 10-Q (September 1993),
            File No. 1-7316).

10.2.2      Employees Savings Plan for Employees of Commonwealth Energy System
            and Subsidiary Companies as amended and restated January 1, 1993
            (Filed as Exhibit 2 to the System's Form 10-Q (September 1993),
            File No. 1-7316).

Filed herewith:

Exhibit 27.
            Financial Data Schedule for the year ended December 31, 1995
            (Filed herewith as Exhibit 1)

(b)         Reports on Form 8-K.

            No reports on Form 8-K were filed during the three months ended
            December 31, 1995.
<PAGE>
<PAGE 42>

                                                          SCHEDULE II

                           COMMONWEALTH GAS COMPANY
                       VALUATION AND QUALIFYING ACCOUNTS
             FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 and 1993

                            (Dollars in Thousands)




                                       Additions      
                      Balance   Provision                Deductions    Balance
                     Beginning  Charged to                Accounts     at End
Description           of Year   Operations  Recoveries   Written Off   of Year

Allowance for
  Doubtful Accounts                Year Ended December 31, 1995      

                      $ 2 827     $ 4 855     $ 1 375      $ 6 366     $ 2 691


                                   Year Ended December 31, 1994     

                      $ 3 162     $ 5 496     $ 1 405      $ 7 236     $ 2 827


                                   Year Ended December 31, 1993      

                      $ 2 890     $ 5 585     $ 1 079      $ 6 392     $ 3 162
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                           COMMONWEALTH GAS COMPANY
                        FORM 10-K    DECEMBER 31, 1995

                                  SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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.

                                                 COMMONWEALTH GAS COMPANY
                                                       (Registrant)

                                            By:  WILLIAM G. POIST         
                                                 William G. Poist,
                                                 Chairman of the Board and
                                                 Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Principal Executive Officers:

WILLIAM G. POIST                                          March 28, 1996
William G. Poist,
Chairman of the Board and
Chief Executive Officer

KENNETH M. MARGOSSIAN                                     March 29, 1996
Kenneth M. Margossian,
President and Chief Operating Officer

Principal Financial and Accounting Officer:
JAMES D. RAPPOLI                                          March 28, 1996
James D. Rappoli,
Financial Vice President and Treasurer


A majority of the Board of Directors:

WILLIAM G. POIST                                          March 28, 1996
William G. Poist, Director

JAMES D. RAPPOLI                                          March 28, 1996
James D. Rappoli, Director

KENNETH M. MARGOSSIAN                                     March 29, 1996
Kenneth M. Margossian, Director