<PAGE 1>

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                         Washington, D. C. 20549-1004

                                   Form 10-Q

(Mark One)

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

     For the quarterly period ended September 30, 1995

                                      OR

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

     For the transition period from                 to                

                         Commission file number 2-1647

                           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)

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

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YES [x]  NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                                                    Outstanding at
           Class of Common Stock                   November 1, 1995
        Common Stock, $25 par value                2,857,000 shares

The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q as a wholly-owned subsidiary and is therefore filing this
Form with the reduced disclosure format.
<PAGE 2>

                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                           COMMONWEALTH GAS COMPANY

                           CONDENSED BALANCE SHEETS

                   SEPTEMBER 30, 1995 AND DECEMBER 31, 1994

                                    ASSETS

                                  (Unaudited)




                                                 September 30,  December 31,
                                                     1995           1994    
                                                     (Dollars in Thousands)

PROPERTY, PLANT AND EQUIPMENT, at original cost    $342 603        $339 476
  Less -  Accumulated depreciation                   90 953          85 162
                                                    251 650         254 314
  Add  -  Construction work in progress               1 628             719
                                                    253 278         255 033

CURRENT ASSETS
  Cash                                                1 362           4 862
  Advances to affiliates                              5 320              - 
  Accounts receivable                                12 580          33 352
  Unbilled revenues                                   3 632          20 892
  Inventories, at average cost                       23 119          25 754
  Prepaid taxes -
   Property                                           5 357           2 861
   Income                                             7 275             619
  Other                                               1 188           1 076
                                                     59 833          89 416

DEFERRED CHARGES
  Transition costs                                    6 616          19 201
  Other                                              17 595          17 155
                                                     24 211          36 356

                                                   $337 322        $380 805











<PAGE 3>

                           COMMONWEALTH GAS COMPANY

                           CONDENSED BALANCE SHEETS

                   SEPTEMBER 30, 1995 AND DECEMBER 31, 1994

                        CAPITALIZATION AND LIABILITIES

                                  (Unaudited)




                                                 September 30,  December 31,
                                                     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                                    367           6 837
                                                     99 531         106 001
 Long-term debt, less current
   sinking fund requirements                         91 750          91 750
                                                    191 281         197 751
CURRENT LIABILITIES
 Interim Financing -
   Notes payable to banks                                -           24 950
   Advances from affiliates                              -           11 220
                                                         -           36 170
 Other Current Liabilities -
   Current sinking fund requirements                  3 650           3 650
   Accounts payable -
     Affiliates                                       1 778           2 669
     Other                                           26 990          33 214
     Refundable gas costs                            27 870          27 832
     Accrued local property and other taxes           5 646           3 317
   Other                                              7 552           6 928
                                                     73 486          77 610
                                                     73 486         113 780
 DEFERRED CREDITS
   Accumulated deferred income taxes                 34 495          32 699
   Unamortized investment tax credits and other      31 444          28 764
   Transition costs                                   6 616           7 811
                                                     72 555          69 274
COMMITMENTS AND CONTINGENCIES

                                                   $337 322        $380 805


                            See accompanying notes.

<PAGE 4>

                           COMMONWEALTH GAS COMPANY

             CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS

        FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

                                  (Unaudited)


                                  Three Months Ended        Nine Months Ended
                                    1995      1994          1995       1994
                                            (Dollars in Thousands)

GAS OPERATING REVENUES            $ 42 127  $ 46 979      $217 861  $246 118

OPERATING EXPENSES
 Cost of gas sold                   26 601    32 281       122 364   145 996
 Other operation and maintenance    19 582    20 664        64 636    66 883
 Depreciation                          978       930         6 800     6 577
 Taxes -
   Income                           (3 544)   (4 157)        3 390     5 016
   Local property                      572       508         3 961     3 555
   Payroll and other                   615       580         2 198     2 150
                                    44 804    50 806       203 349   230 177

OPERATING INCOME (LOSS)             (2 677)   (3 827)       14 512    15 941

OTHER INCOME                           519       296           927       404

INCOME (LOSS) BEFORE INTEREST
 CHARGES                            (2 158)   (3 531)       15 439    16 345

INTEREST CHARGES
 Long-term debt                      2 046     2 128         6 147     6 386
 Other interest charges              1 023       455         3 253     1 309
 Allowance for borrowed funds
   used during construction            (34)      (15)          (62)      (29)
                                     3 035     2 568         9 338     7 666

NET INCOME (LOSS)                   (5 193)   (6 099)        6 101     8 679

RETAINED EARNINGS -
 Beginning of period                 5 560     9 476         6 837     7 840
 Dividends on common stock              -     (1 429)      (12 571)  (14 571)

RETAINED EARNINGS -
 End of period                    $    367  $  1 948      $    367  $  1 948








                            See accompanying notes.

<PAGE 5>

                           COMMONWEALTH GAS COMPANY

                      CONDENSED STATEMENTS OF CASH FLOWS

             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994

                                  (Unaudited)




                                                       1995           1994 
                                                     (Dollars in Thousands)

OPERATING ACTIVITIES
 Net income                                         $  6 101       $  8 679
 Effects of noncash items -
   Depreciation and amortization                       9 242         10 599
   Deferred income taxes and investment
     tax credits, net                                  1 262          3 465
 Change in working capital, exclusive of cash,
   advances to affiliates and interim financing       27 279         36 740
 Transition costs, net                                11 390         (4 524)
 All other operating items                             5 805         (7 990)
Net cash provided by operating activities             61 079         46 969

INVESTING ACTIVITIES
 Additions to property, plant and equipment
   (exclusive of AFUDC)                              (10 456)       (11 351)
 Allowance for borrowed funds used
   during construction                                   (62)           (29)
 Advances to affiliates                               (5 320)            - 
Net cash used for investing activities               (15 838)       (11 380)

FINANCING ACTIVITIES
 Payment of dividends                                (12 571)       (14 571)
 Payment of short-term borrowings                    (24 950)       (31 425)
 Advances from (payments to) affiliates              (11 220)        10 275
Net cash used for financing activities               (48 741)       (35 721)

Net decrease in cash                                  (3 500)          (132)
Cash at beginning of period                            4 862          1 297
Cash at end of period                               $  1 362       $  1 165


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 Cash paid during the period for:
   Interest (net of capitalized amounts)            $  7 847       $  6 657
   Income taxes                                     $  8 550       $  3 202






                            See accompanying notes.

<PAGE 6>

                           COMMONWEALTH GAS COMPANY

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

(1) Accounting Policies

         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 collectively
    referred to as "the system."

         The Company's significant accounting policies are described in Note
    1 of Notes to Financial Statements included in its 1994 Annual Report on
    Form 10-K filed with the Securities and Exchange Commission.  For interim
    reporting purposes, the Company follows these same basic accounting
    policies but considers each interim period as an integral part of an
    annual period and makes allocations of certain expenses to interim
    periods based upon estimates of revenue from firm sales for the year.

         The Company has established various regulatory assets in cases where
    the Massachusetts Department of Public Utilities (DPU) and/or the Federal
    Energy Regulatory Commission (FERC) have permitted or are expected to
    permit recovery of specific costs over time.  Similarly, the regulatory
    liabilities established by the Company are required to be refunded to
    customers over time.  In March 1995, the Financial Accounting Standards
    Board issued Statement of Financial Accounting Standards No. 121,
    "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
    Assets to be Disposed Of" (SFAS 121).  SFAS 121 imposes stricter criteria
    for regulatory assets by requiring that such assets be probable of future
    recovery at each balance sheet date.  Based on the current regulatory
    framework, the Company accounts for the economic effects of regulation in
    accordance with the provisions of SFAS No. 71, "Accounting for the
    Effects of Certain Types of Regulation" and does not expect that SFAS
    121, which the Company will adopt on January 1, 1996, will have a
    material impact on its financial position or results of operations. 
    However, this conclusion may change in the future if changes are made in
    the current regulatory framework or as competitive factors influence
    wholesale and retail pricing in this industry.  The principal regulatory
    assets included in deferred charges at September 30, 1995 and December
    31, 1994 were as follows:
                                                September 30,  December 31,
                                                     1995          1994    
                                                  (Dollars in Thousands)

    Transition costs                               $ 6 616        $19 201
    Postretirement benefit costs                     7 187          5 367
    Environmental costs                              2 537          2 346
      Total regulatory assets                      $16 340        $26 914

         The regulatory liabilities, included in deferred credits-other and
    principally related to income taxes, amounted to $9.7 million and $9.9
    million at September 30, 1995 and December 31, 1994, respectively.

         Generally, expenses which relate to more than one interim period are
    allocated to other periods to more appropriately match revenues and
    expenses.  Principal items of expense which are allocated other than on
<PAGE 7>

                           COMMONWEALTH GAS COMPANY

    the basis of passage of time are depreciation and property taxes.  These
    expenses are recorded for interim reporting purposes based upon projected
    gas revenue.  Income tax expense is recorded using the statutory rates in
    effect applied to book income subject to tax recorded in the interim
    period.

         The unaudited financial statements for the periods ended September
    30, 1995 and 1994 reflect, in the opinion of the Company, all adjustments
    (consisting of only normal recurring accruals) necessary to summarize
    fairly the results for such periods.  In addition, certain prior period
    amounts are reclassified from time to time to conform with the presenta-
    tion used in the current period's financial statements.

         The results for interim periods are not necessarily indicative of
    results for the entire year because of variations in gas consumption due
    to the heating season and also because of the Company's seasonal rate
    structure.


(2) Commitments

         (a) Construction Program

         The Company is engaged in a continuous construction program present-
    ly estimated at $106.4 million for the five-year period 1995 through
    1999.  Approximately $21.2 million of that amount was estimated for 1995. 
    As of September 30, 1995, the Company's construction expenditures
    amounted to approximately $10.5 million, including an allowance for funds
    used during construction.  The latest estimate of expenditures for 1995
    is approximately $17 million.  The Company expects to finance these
    expenditures on an interim basis with internally-generated funds and
    short-term borrowings which are ultimately expected to be repaid with
    proceeds from the issuance of long-term debt and equity securities.

         The program is subject to periodic review and revision because of 
    factors such as changes in business conditions, rates of growth, effects
    of inflation, equipment delivery schedules, licensing delays, availabili-
    ty and cost of capital and environmental regulations.

         (b) FERC Order No. 636

         In May 1995, the DPU allowed the Company to accelerate recovery of
    its FERC Order No. 636 transition costs that were incurred to date. 
    These costs had been deferred and accumulated as a regulatory asset and
    were being recovered through the cost of gas adjustment (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 period was permitted by the DPU due to the
    minimal impact on customers' bills.  At September 30, 1995, a regulatory
    asset totaling $6.6 million was reflected in deferred charges.  In
    addition, a related liability of $6.6 million was reflected in deferred
    credits.  Any further transition costs will be recovered by the Company
    through the CGA as incurred.
<PAGE 8>

                           COMMONWEALTH GAS COMPANY

Item 2.  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 condensed statements of income.  This discussion
should be read in conjunction with the Notes to Condensed Financial Statements
appearing elsewhere in this report.

    A summary of the period to period changes in the principal items included
in the condensed statements of income for the three and nine months ended
September 30, 1995 and 1994 and unit sales for these periods is shown below:

                                      Three Months            Nine Months
                                   Ended September 30,    Ended September 30,
                                      1995 and 1994          1995 and 1994   
                                             Increase (Decrease)
                                           (Dollars in Thousands)

Gas Operating Revenues            $(4 852)   (10.3)%     $(28 257)   (11.5)%

Operating Expenses -
 Cost of gas sold                  (5 680)   (17.6)       (23 632)   (16.2)
 Other operation and maintenance   (1 082)    (5.2)        (2 247)    (3.4)
 Depreciation                          48      5.2            223      3.4
 Taxes -
   Federal and state income           613     14.7         (1 626)   (32.4)
   Local property and other            99      9.1            454      8.0
                                   (6 002)   (11.8)       (26 828)   (11.7)

Operating Income                    1 150     30.0         (1 429)    (9.0)

Other Income                          223     75.3            523    129.5

Income Before Interest Charges      1 373     38.9           (906)    (5.5)

Interest Charges                      467     18.2          1 672     21.8

Net Income                        $   906     14.9       $ (2 578)   (29.7)

Firm Unit Sales - BBTU                181      5.6         (2 364)    (8.4)


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

          Unit Sales - In Billions of British Thermal Units (BBTU)

                                       Inter-     Off-     Quasi-     Trans-
                      Total    Firm    ruptible   System     Firm    portation
Three Months Ended
September 30, 1995    6 890    3 387       308      976      579       1 640
September 30, 1994    8 351    3 206     4 129       -        -        1 016

Nine Months Ended
September 30, 1995   36 678   25 752       899    3 356    1 449       5 222
September 30, 1994   36 878   28 116     6 766       -        -        1 996
<PAGE 9>

                           COMMONWEALTH GAS COMPANY

Operating Revenues and Unit Sales

    Operating revenues for the current nine months decreased $28.3 million or
11.5% due to a reduction in the cost of gas sold of $23.6 million and lower
interruptible unit sales offset, in part, by higher transportation volume and
off-system and quasi-firm unit sales that began in 1994.  During the current
quarter, operating revenues decreased by $4.9 million or 10.3% due primarily
to a $5.7 million decrease in the cost of gas sold and lower interruptible
unit sales partially offset by higher transportation volume, off-system and
quasi-firm sales and an increase in firm unit sales.

    Firm unit sales decreased 8.4% in the current nine-month period as sales
to all customer classes reflect the mild weather conditions experienced
throughout the region in the first quarter compared to a colder than normal
first quarter last year.  Firm unit sales were 5.6% higher during the current
quarter as heating degree days totaled 249 compared to 207 for the same period
in 1994.  Although interruptible sales decreased dramatically during both
periods, fluctuations in these sales have little, if any, impact on net
income.  Off-system and quasi-firm sales have contributed to the Company's
total sales but, at this time, have no impact on net income.  One-half of the
margin realized on these sales is used to reduce the cost of gas to firm
customers.  The remaining half is being deferred pending DPU approval of the
Company's margin sharing proposals that are expected to be filed later this
year for quasi-firm sales and early next year for off-system sales.

Other Operation and Maintenance

    Other operation and maintenance decreased for the current nine months by
$2.2 million or 3.4% due to a decline in distribution and customer service
expenses mainly due to fewer leak repair activities and a reduction in meter
work ($1.1 million), lower customer relations and customer contact expenses
due primarily to workforce reductions resulting from the automation of meter
reading ($746,000), a lower provision for bad debts reflecting the level of
billed sales ($656,000), a decline in conservation and load management
expenses (340,000), decreased engineering expenses due to lower environmental
costs (262,000) and the Company's continuing cost-containment efforts.  These
decreases were partially offset by higher costs associated with the leasing of 
automated meter reading (AMR) equipment ($1.1 million), an increase in labor
costs ($771,000) and higher insurance and benefits expenses ($215,000).  Other
operation and maintenance decreased by $1.1 million or 5.2% during the current
quarter due primarily to a lower level of C&LM costs ($655,000), a decline in
distribution and customer service expenses ($592,000) and lower customer
relations and customer contact expenses ($221,000), offset, in part, by higher
costs associated with the leasing of AMR equipment ($394,000) and increased
labor costs ($436,000).

Depreciation and Taxes

    Depreciation expense increased during the current three and nine-month
periods due to higher levels of depreciable plant-in-service.  The change in
federal and state income taxes in both periods reflects the level of pretax
income.  The increase in local property and other taxes for both periods was
due to higher rates and assessments.
<PAGE 10>

                           COMMONWEALTH GAS COMPANY

Other Income and Interest Charges

    The increase in other income for both periods was due primarily to
interest income received by the Company in connection with its participation
in the COM/Energy Money Pool.  This was partially offset by lower
merchandising and jobbing revenue.

    Total interest charges were 18.2% and 21.8% higher during the current
three and nine-month periods due to an increase in interest on deferred gas
costs offset somewhat by a decline in short-term interest charges reflecting a
lower average level of short-term borrowings.  The Company had no short-term
borrowings throughout the entire third quarter.

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 Company is also
involved in certain other known or potentially contaminated sites where the
associated costs may not be recoverable in rates.  There were no significant
new developments that occurred during the current nine-month period.  For
further information on these matters, refer to the Company's 1994 Annual
Report on Form 10-K.

<PAGE 11>

                           COMMONWEALTH GAS COMPANY

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 5.  Other Information

         Effective October 1, 1995, John A. Whalen, formerly the Company's
         Comptroller, was appointed Vice President and General Manager of
         COM/Energy Services Company, an affiliate of the Company.  James D.
         Rappoli, the Company's Financial Vice President and Treasurer,
         assumed Mr. Whalen's former duties as Comptroller.

Item 6.  Exhibits and Reports on Form 8-K

    (a)  Exhibits

         Exhibit 27 - Financial Data Schedule

         Filed herewith as Exhibit 1 is the Financial Data Schedule for the
         nine months ended September 30, 1995.

    (b)  Reports on Form 8-K

         No reports on Form 8-K were filed for the three months ended
         September 30, 1995.
<PAGE 12>

                           COMMONWEALTH GAS COMPANY

                                   SIGNATURE

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



                                          COMMONWEALTH GAS COMPANY
                                                (Registrant)


                                          Principal Financial and
                                          Accounting Officer:



                                          JAMES D. RAPPOLI             
                                          James D. Rappoli,
                                          Financial Vice President
                                            and Treasurer
Date:  November 13, 1995