<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 June 30, 1998

                                       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                      August 1, 1998
         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

                       JUNE 30, 1998 AND DECEMBER 31, 1997

                                     ASSETS

                             (Dollars in thousands)




                                                     June 30,      December 31,
                                                       1998            1997    
                                                    (Unaudited)


PROPERTY, PLANT AND EQUIPMENT, at original cost      $380,747        $375,083
  Less -  Accumulated depreciation                    118,400         110,661
                                                      262,347         264,422
  Add  -  Construction work in progress                 2,334             570
                                                      264,681         264,992

CURRENT ASSETS
  Cash                                                      9           1,867
  Advances to affiliates                                  400             -  
  Accounts receivable                                  32,268          49,323
  Unbilled revenues                                     2,658          19,121
  Inventories, at average cost                         21,691          24,526
  Prepaid taxes -
    Property                                              -             3,176
    Income                                              3,607           5,640
  Other                                                 1,687           1,234
                                                       62,320         104,887

DEFERRED CHARGES
  Regulatory assets                                    21,383          20,873
  Other                                                 5,569           5,214
                                                       26,952          26,087

                                                     $353,953        $395,966








                             See accompanying notes.


<PAGE 3>

                            COMMONWEALTH GAS COMPANY

                            CONDENSED BALANCE SHEETS

                       JUNE 30, 1998 AND DECEMBER 31, 1997

                         CAPITALIZATION AND LIABILITIES

                             (Dollars in thousands)



                                                     June 30,      December 31,
                                                       1998            1997    
                                                    (Unaudited)

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                                  18,321          16,871
                                                      117,485         116,035
  Long-term debt, less current sinking
    fund requirements                                 105,800         105,800
                                                      223,285         221,835
CURRENT LIABILITIES
  Interim Financing -
    Notes payable to banks                                -            39,325
                                                          -            39,325
  Other Current Liabilities -
    Current sinking fund requirements                   3,650           3,650
    Accounts payable -
      Affiliates                                        3,820           1,869
      Other                                            15,720          32,450
    Accrued taxes -
      Local property and other                            801           3,366
    Other                                              31,971          20,595
                                                       55,962          61,930
                                                       55,962         101,255
  DEFERRED CREDITS
    Accumulated deferred income taxes                  39,197          38,322
    Unamortized investment tax credits                  5,361           5,461
    Other                                              30,148          29,093
                                                       74,706          72,876

                                                     $353,953        $395,966


                             See accompanying notes.
<PAGE 4>

                            COMMONWEALTH GAS COMPANY

              CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997

                       (Dollars in thousands - unaudited)


                                   Three Months Ended         Six Months Ended
                                     1998       1997          1998        1997


GAS OPERATING REVENUES             $ 56,301   $ 61,062      $165,089   $193,375

OPERATING EXPENSES
  Cost of gas sold                   32,618     33,385        88,163    108,025
  Other operation and maintenance    20,207     26,992        40,057     46,694
  Depreciation                        1,842      1,768         6,500      6,240
  Taxes -
    Income                           (1,145)    (2,337)        7,311      8,113
    Local property                      994      1,233         3,721      3,836
    Payroll and other                   619        643         1,738      1,964
                                     55,135     61,684       147,490    174,872

OPERATING INCOME                      1,166       (622)       17,599     18,503

OTHER INCOME                            100         11           280         87

INCOME BEFORE INTEREST
  CHARGES                             1,266       (611)       17,879     18,590

INTEREST CHARGES
  Long-term debt                      2,186      1,656         4,372      3,312
  Other interest charges                645        926         1,373      1,909
  Allowance for borrowed funds
    used during construction            (20)       (21)          (29)       (32)
                                      2,811      2,561         5,716      5,189

NET INCOME (LOSS)                    (1,545)    (3,172)       12,163     13,401

RETAINED EARNINGS -
  Beginning of period                30,579     27,429        16,871     10,856
  Dividends on common stock         (10,713)    (5,714)      (10,713)    (5,714)

RETAINED EARNINGS -
  End of period                    $ 18,321   $ 18,543      $ 18,321   $ 18,543






                             See accompanying notes.
<PAGE 5>

                            COMMONWEALTH GAS COMPANY

                       CONDENSED STATEMENTS OF CASH FLOWS

                 FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997

                       (Dollars in thousands - unaudited)




                                                         1998           1997 

OPERATING ACTIVITIES
  Net income                                          $ 12,163       $ 13,401
  Effects of noncash items -
    Depreciation and amortization                        8,069          7,579
    Deferred income taxes and investment
      tax credits, net                                     650            856
  Change in working capital, exclusive of cash,
    advances to affiliates and interim financing        35,141         37,285
  All other operating items                                 85         (1,454)
Net cash provided by operating activities               56,008         57,667

INVESTING ACTIVITIES
  Additions to property, plant and equipment
   (inclusive of AFUDC)                                 (7,428)        (6,790)
  Advances to affiliates                                  (400)           -  
Net cash used for investing activities                  (7,828)        (6,790)


FINANCING ACTIVITIES
  Payment of dividends                                 (10,713)        (5,714)
  Payment of short-term borrowings                     (39,325)       (34,875)
  Payments to affiliates                                   -           (9,175)
Net cash used for financing activities                 (50,038)       (49,764)

Net increase (decrease) in cash                         (1,858)         1,113
Cash at beginning of period                              1,867            421
Cash at end of period                                 $      9       $  1,534


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest, net of amounts capitalized              $  5,462       $  4,855
    Income taxes                                      $  4,638       $  6,106






                             See accompanying notes.
<PAGE 6>

                            COMMONWEALTH GAS COMPANY

                     NOTES TO CONDENSED 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 collectively
     referred to as "the system."  The System is an exempt public utility
     holding company under the provisions of the Public Utility Holding
     Company Act of 1935 and, in addition to its investment in the Company,
     has interests in other utility and several non-regulated companies.

          The Company has 596 regular employees including 402 (67%) who are
     represented by three collective bargaining units.  In September 1998, a
     collective bargaining unit representing approximately 2% of regular
     employees is scheduled to expire.  Two additional contracts (together
     representing approximately 65% of regular employees) will remain in
     effect until March and June of 2002.

(2)  Significant Accounting Policies

          (a) Principles of Accounting

          The Company's significant accounting policies are described in Note
     2 of Notes to Financial Statements included in its 1997 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.

          Generally, certain 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 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 June 30,
     1998 and 1997 reflect, in the opinion of the Company, all adjustments
     (consisting of only normal recurring accruals, except for a one-time
     charge recorded in June 1997 as described in Management's Discussion and
     Analysis of Results of Operations) necessary to summarize fairly the
     results for such periods.  In addition, certain prior period amounts are
     reclassified from time to time to conform with the 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.
<PAGE 7>

                            COMMONWEALTH GAS COMPANY

          (b) Regulatory Assets and Liabilities

          The Company is regulated as to rates, accounting and other matters
     by the Massachusetts Department of Telecommunications and Energy (DTE).

          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 DTE has
     permitted or is expected to permit recovery of specific costs over time. 
     If all or a separable portion of the Company's operations becomes no
     longer subject to the provisions of SFAS No. 71, a write-off of related
     regulatory assets and liabilities would be required, unless some form of
     transition cost recovery continues through rates established and
     collected for the Company's remaining regulated operations.  In addition,
     the Company would be required to determine any impairment to the carrying
     costs of deregulated plant and inventory assets.

          The principal regulatory assets included in deferred charges were as
     follows:
                                                  June 30,       December 31,
                                                    1998             1997    
                                                   (Dollars in thousands)
      Postretirement benefits costs               $ 9,183          $ 9,607
      FERC Order 636 transition costs               6,652            7,336
      Environmental costs                           5,548            3,930
                                                  $21,383          $20,873

         The principal regulatory liability, reflected in deferred credits-
    other and relating to income taxes, was $8.2 million at June 30, 1998 and
    $8.3 million at December 31, 1997.  These regulatory assets are a
    component that was included in the Company's consensus-based settlement
    that was filed with the DTE on June 29, 1998.

(3)      Commitments

         Construction Program

         The Company is engaged in a continuous construction program presently
    estimated at $93 million for the five-year period 1998 through 2002.  Of
    that amount, $17.9 million is estimated for 1998.  As of June 30, 1998,
    the Company's actual construction expenditures amounted to approximately
    $7.4 million, including an allowance for funds used during construction. 
    The Company expects to finance these expenditures on an interim basis with
    internally-generated funds and short-term borrowings which are ultimately
    expected to be repaid with the proceeds from the issuance of long-term
    debt and/or 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, availability
    and cost of capital and environmental regulations.

<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 six months ended June
30, 1998 and 1997 is shown below:

                                       Three Months             Six Months
                                       Ended June 30,          Ended June 30,
                                       1998 and 1997           1998 and 1997  
                                               Increase (Decrease)
                                             (Dollars in thousands)

Gas Operating Revenues              $(4,761)    (7.8)%     $(28,286)   (14.6)%

Operating Expenses -
  Cost of gas sold                     (767)    (2.3)       (19,862)   (18.4)
  Other operation and maintenance    (6,785)   (25.1)        (6,637)   (14.2)
  Depreciation                           74      4.2            260      4.2
  Taxes -
    Federal and state income          1,192     51.0           (802)    (9.9)
    Local property and other           (263)   (14.0)          (341)    (5.9)
                                     (6,549)   (10.6)       (27,382)   (15.7)

Operating Income                      1,788    287.5           (904)    (4.9)

Other Income                             89    809.1            193    221.8

Income Before Interest Charges        1,877    307.2           (711)    (3.8)

Interest Charges                        250      9.8            527     10.2

Net Income                          $ 1,627     51.3       $ (1,238)    (9.2)

Firm Unit Sales - BBTU               (1,697)   (24.9)        (4,496)   (18.7)


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

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

                                                            Off-       Quasi-
                        Total       Firm   Interruptible   System       Firm 
Three Months Ended
  June 30, 1998          6,461      5,107        466          888        -  
  June 30, 1997          7,990      6,804        428          735         23

Six Months Ended
  June 30, 1998         22,482     19,565        992        1,925        -  
  June 30, 1997         26,498     24,061        879        1,532         26
<PAGE 9>

                            COMMONWEALTH GAS COMPANY

Operating Revenues and Unit Sales

    Operating revenues for the current quarter and first six months of 1998
decreased by $4.8 million and $28.3 million, respectively, due primarily to
the considerable declines in total unit sales.  Also affecting revenues in
both periods was a lower average cost of gas.

    The decline in firm unit sales for both the current quarter and the first
six months of 1998 reflects significant decreases in sales to all customer
segments that were caused by the milder winter weather experienced in our
region.  The fluctuation in non-firm sales reflects the competitive
environment that currently exists in the natural gas industry.

Other Operation and Maintenance

    The $6.8 million and $6.6 million decreases in other operation and
maintenance costs for the current quarter and the first half of 1998,
respectively, reflects the absence of costs associated with a Personnel
Reduction Program (PRP) that was initiated during the second quarter of last
year ($6.7 million) and the resulting labor savings realized during this year
($700,000 in the second quarter and $1.8 million for the six month period). 
These savings were offset, in part, by higher costs ($1.3 million in the
current quarter and $2.8 million year-to-date) relating to the outsourcing of
the information technology, telecommunications and network services function
that include costs associated with Year 2000 compliance.

Depreciation and Taxes

    Depreciation increased slightly during the current quarter and first six
months of 1998 due to a higher level of depreciable plant.  The fluctuation in
federal and state income taxes for both periods was due to the levels of
pretax income.  Local property and other taxes decreased in both current
periods due primarily to lower payroll costs resulting from the PRP discussed
above.

Other Income and Interest Charges

    For both the current quarter and the first half of 1998, the increase in
other income was due primarily to higher revenues associated with the
Company's merchandising program for water heaters and heating systems.

    For the current quarter and the first six months of 1998, total interest
charges increased $250,000 and $527,000, respectively, due primarily to higher
long-term interest charges ($521,000 and $1 million) resulting from the
issuance of two new series of long-term debt in late September 1997 and an
increase in interest charges related to deferred gas costs ($70,000 and
$320,000) offset, in part, by declines in interest on short-term borrowings
($347,000 and $850,000) due primarily to a lower average level of borrowings
reflecting the use of proceeds from the new long-term debt issues.

<PAGE 10>


                            COMMONWEALTH GAS COMPANY 

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 DTE has approved
recovery of costs associated with MGP sites.  The Company is also involved in
certain other known or potentially contaminated sites where the associated
costs may not be recoverable in rates.  For further information on other
related environmental matters, refer to the Company's 1997 Annual Report on
Form 10-K.

Gas Industry Restructuring

    On July 18, 1997, the DTE directed the ten Massachusetts gas utilities,
including the Company, to initiate a collaborative process that will establish
guiding principles and specific procedures for unbundling rates and services
for all customers.

    The DTE listed six principles that it considers important to the success
of a competitive natural gas market that will provide safe and reliable
service at the lowest possible cost to customers.  The natural gas market
would: (1) provide the broadest possible choice; (2) provide all customers
with an opportunity to share in the benefits of increased competition; (3)
ensure full and fair competition in the gas supply market; (4) functionally
separate supply from local distribution services; (5) support and further the
goals of environmental regulation; and lastly (6) rely on incentive regulation
where a fully competitive market cannot or presently does not exist.

    In addition, the DTE outlined several specific issues that it expects the
collaborative to address: (1) services that can be offered on a competitive
basis; (2) terms and conditions of service; (3) consumer protections and
social programs; (4) mitigation of gas related and non-gas related transition
costs; (5) third-party supplier qualifications; and (6) curtailment
principles.  The DTE also suggested that the collaborative reconsider the
pricing and provision of interruptible transportation services.

    On August 18, 1997, the DTE noted that the development of unbundling
principles and procedures constitutes only a part of the effort necessary to
develop full customer choice for gas service.  The DTE recognized that each
local distribution company will be filing a comprehensive unbundling proposal
at some later date.  In the interim, the DTE directed those companies that do
not currently have unbundled rates, including the Company, to have such rates
in effect no later than November 1, 1998.

    The Company and eight other gas utilities initiated the Massachusetts Gas
Unbundling Collaborative (the Collaborative) on September 15, 1997, to explore
and develop generic principles to achieve the goals set forth by the DTE. 
Collaborative participants represented a broad array of stakeholder interests
including the utilities, natural gas marketers, interstate pipelines,
producers, energy consultants, labor unions, consumer advocates and
representatives for the DTE, the Massachusetts Attorney General's Office, and
the Massachusetts Division of Energy Resources.

<PAGE 11>

                            COMMONWEALTH GAS COMPANY

    On November 15, 1997, the Collaborative filed a status report with the DTE
that outlined its progress in moving the gas industry to a more competitive
structure that provides all customers with meaningful access to competitive
markets consistent with public-policy objectives.  The status report
summarized the substantive issues that had been the subject of Collaborative
discussion, including: (1) the disposition of interstate pipeline capacity;
(2) the unbundling of rates; (3) customer enrollment, billing, termination,
and information exchange procedures; and, (4) consumer protections, low-income
discounts, and competitive supplier registration.  The status report also
established a schedule to implement a final unbundling plan by November 1,
1998.

    In accordance with that schedule, the Collaborative submitted to the DTE a
Rate Unbundling Status Report on January 16, 1998.  The report detailed an
overall process for developing unbundled rates consistent with the DTE's rate
structure goals of efficiency, fairness, simplicity, continuity and earnings
stability.  In response to the Collaborative's proposal, the DTE ordered the
Company to submit, by April 15, 1998, a consensus-based settlement, or partial
settlement, of unbundled rate tariffs designed according to the general
concepts set forth in the report.  Subsequently, the DTE granted the Company
an extension to reach a settlement with the Collaborative's participants.

    On March 18, 1998, the Collaborative filed a second status report that
summarized the progress made by the Collaborative since it had last updated
the DTE on its activities.  The Collaborative reported that it had made
substantial progress in the areas of rate unbundling and terms and conditions
for unbundled services.  The report also described at least two policy issues,
capacity disposition and cost responsibility, on which the Collaborative's
participants require specific regulatory guidance before completing a
comprehensive framework for the transition to a more competitive market
structure.

    In response to the March report, the DTE issued a Notice of Inquiry to
address the Collaborative's unresolved issues.  On May 1, 1998, the Company
filed initial written comments in the proceeding arguing in favor of a
mandatory capacity assignment proposal.  On June 8, 1998, the DTE, as part of
the aforementioned Notice of Inquiry, received final comments regarding the
feasibility of implementing comprehensive unbundling for all local
distribution companies by November 1, 1998.  On June 29, 1998, the Company and
three other Massachusetts local distribution companies submitted unbundled
rate settlements to the DTE for consideration.

      The DTE issued a procedural order regarding the Notice of Inquiry on
July 2, 1998 which stated that the introduction of comprehensive unbundling
for all classes of customers for all local distribution companies is not
feasible by November 1, 1998.  The DTE stated that unbundled rates for the
four local distribution companies that filed settlements on June 29, 1998
(including the Company) shall be in place by November 1, 1998 and that
comprehensive unbundling shall be implemented no later than April 1, 1999. 
Also, as part of the July 2, 1998 procedural order, the DTE ordered that a set
of proposed Model Terms and Conditions be submitted by the Collaborative no
later than July 15, 1998.  These Model Terms and Conditions were submitted on
July 10, 1998 and a decision will be issued by the DTE no later than September
30, 1998.  The DTE intends to issue an order on capacity assignment and cost
responsibility by October 30, 1998.
<PAGE 12>
                             COMMONWEALTH GAS COMPANY

Year 2000

    The Company has been involved in Year 2000 compliancy since 1996.  A
complete inventory and review of software, information processing, delivery
systems and operational components for certain facilities has been completed,
and work continues on computer systems wherever necessary.  While some
computer systems have already been updated, tested and placed in production,
the system expects to complete the balance of the modifications by mid-1999.

    Costs associated with Year 2000 compliancy are being expensed as incurred. 
The total cost of this project is expected to be funded with internally
generated funds.

    Management believes that, with appropriate modifications, the Company will
be fully compliant regarding all Year 2000 issues and will continue to provide
its products and services uninterrupted through the millennium change. 
Failure to become fully compliant could have a significant impact on the
Company's operations.

New Accounting Standard

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS No. 133), "Accounting for
Derivative Instruments and Hedging Activities."  SFAS No. 133 establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts possibly
including fixed-price gas supply contracts) be recorded on the balance sheet
as either an asset or liability measured at its fair value.  SFAS No. 133
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge accounting criteria are met.  Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting.

    SFAS No. 133 is effective for fiscal years beginning after June 15, 1999
and may be implemented as of the beginning of any fiscal quarter after
issuance but cannot be applied retroactively.  SFAS No. 133 must be applied to
derivative instruments and certain derivative instruments embedded in hybrid
contracts that were issued, acquired or substantively modified after December
31, 1997 and, at the company's election, before January 1, 1998.

    The Company has not yet quantified the impacts of adopting SFAS No. 133 on
its financial statements and has not determined the timing of its method of
adopting SFAS No. 133.

Forward-Looking Statements

    This discussion contains statements which, to the extent it is not a
recitation of historical fact, constitute "forward-looking statements" and is
intended to be subject to the safe harbor protection provided by the Private 
Securities Litigation Reform Act of 1995.  A number of important factors
<PAGE 13>

                            COMMONWEALTH GAS COMPANY

affecting the Company's business and financial results could cause actual
results to differ materially from those reflected in the forward-looking
statements or projected amounts.  Those factors include developments in the
legislative, regulatory and competitive environment, certain environmental
matters, demands for capital and the availability of cash from various
sources.
<PAGE 14>

                            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

         None.

Item 6.  Exhibits and Reports on Form 8-K

    (a)  Exhibits

         Exhibit 27 - Financial Data Schedule

         Filed herewith as Exhibit 1 is the Financial Data Schedule for the 
         three months ended June 30, 1998.

    (b)  Reports on Form 8-K

         No reports on Form 8-K were filed for the three months ended June 30,
         1998.
<PAGE 15>

                            COMMONWEALTH GAS COMPANY

                                   SIGNATURES

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



                                           COMMONWEALTH GAS COMPANY
                                                 (Registrant)


                                           Principal Financial and
                                           Accounting Officer:


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



Date:  August 14, 1998