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            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, 1999

                                   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, 1999
       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.

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                     PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                        COMMONWEALTH GAS COMPANY

                        CONDENSED BALANCE SHEETS

                   JUNE 30, 1999 AND DECEMBER 31, 1998

                                 ASSETS

                         (Dollars in thousands)




                                               June 30,    December 31,
                                                 1999          1998
                                              (Unaudited)


PROPERTY, PLANT AND EQUIPMENT, at original cost$397,298      $392,612
   Less -  Accumulated depreciation            127,429        120,811
                                               269,869        271,801
   Add  -  Construction work in progress         3,506          1,066
                                               273,375        272,867

CURRENT ASSETS
   Cash                                              9            427
   Advances to affiliates                       14,825            -
   Accounts receivable                          27,090         39,741
   Unbilled revenues                             5,009         10,358
   Inventories, at average cost                 19,017         25,885
   Prepaid taxes -
    Property                                       -            3,135
    Income                                       4,647          5,034
   Other                                           928            874
                                                71,525         85,454

DEFERRED CHARGES
   Regulatory assets                            19,724         19,616
   Other                                         4,903          5,307
                                                24,627         24,923

                                              $369,527       $383,244










                         See accompanying notes.

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                        COMMONWEALTH GAS COMPANY

                        CONDENSED BALANCE SHEETS

                   JUNE 30, 1999 AND DECEMBER 31, 1998

                     CAPITALIZATION AND LIABILITIES

                         (Dollars in thousands)



                                               June 30,    December 31,
                                                 1999          1998
                                              (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                           23,845         17,998
                                               123,009        117,162
  Long-term debt, less current sinking
    fund requirements                          102,150        102,150
                                               225,159        219,312
CURRENT LIABILITIES
  Interim Financing -
    Advances from affiliates                       -           30,825
  Other Current Liabilities -
    Current sinking fund requirements            3,650          3,650
    Accounts payable -
      Affiliates                                 4,385          2,527
      Other                                     10,779         27,153
    Accrued taxes -
      Local property and other                     610          3,251
    Other                                       46,122         20,457
                                                65,546         57,038
                                                65,546         87,863
  DEFERRED CREDITS
    Accumulated deferred income taxes           41,847         40,767
    Unamortized investment tax credits           5,166          5,263
    Other                                       31,809         30,039
                                                78,822         76,069

                                              $369,527       $383,244








                         See accompanying notes.

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                        COMMONWEALTH GAS COMPANY

          CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS

        FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998

                   (Dollars in thousands - unaudited)


                               Three Months Ended     Six Months Ended
                                 1999      1998        1999       1998


GAS OPERATING REVENUES         $ 53,898 $ 56,301    $164,218  $165,089

OPERATING EXPENSES
  Cost of gas sold               27,093   32,618      80,006    88,163
  Other operation and maintenance20,724   20,207      41,964    40,057
  Depreciation                    1,930    1,842       6,586     6,500
  Taxes -
    Income                         (103)  (1,145)      9,487     7,311
    Local property                1,091      994       3,914     3,721
    Payroll and other               623      619       1,764     1,738
                                 51,358   55,135     143,721   147,490

OPERATING INCOME                  2,540    1,166      20,497    17,599

OTHER INCOME                        417      100         693       280

INCOME BEFORE INTEREST
  CHARGES                         2,957    1,266      21,190    17,879

INTEREST CHARGES
  Long-term debt                  2,103    2,186       4,207     4,372
  Other interest charges            832      645       1,589     1,373
  Allowance for borrowed funds
    used during construction        (10)     (20)        (24)      (29)
                                  2,925    2,811       5,772     5,716

NET INCOME (LOSS)                    32   (1,545)     15,418    12,163

RETAINED EARNINGS -
  Beginning of period            33,384   30,579      17,998    16,871
  Dividends on common stock      (9,571) (10,713)     (9,571)  (10,713)

RETAINED EARNINGS -
  End of period                $ 23,845 $ 18,321    $ 23,845  $ 18,321









                         See accompanying notes.

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                        COMMONWEALTH GAS COMPANY

                   CONDENSED STATEMENTS OF CASH FLOWS

             FOR THE SIX MONTHS ENDED JUNE 30 1999 AND 1998

                   (Dollars in thousands - unaudited)




                                                  1999           1998

OPERATING ACTIVITIES
  Net income                                   $ 15,418      $ 12,163
  Effects of noncash items -
    Depreciation and amortization                 8,196         8,069
    Deferred income taxes and investment
      tax credits, net                              773           650
  Change in working capital, exclusive of cash,
    advances to affiliates and interim financing 36,844        35,141
  All other operating items                       1,008            85
Net cash provided by operating activities        62,239        56,008

INVESTING ACTIVITIES
  Additions to property, plant and equipment
   (inclusive of AFUDC)                          (7,436)       (7,428)
  Advances to affiliates                        (14,825)         (400)
Net cash used for investing activities          (22,261)       (7,828)

FINANCING ACTIVITIES
  Payment of dividends                           (9,571)      (10,713)
  Payment of short-term borrowings                  -         (39,325)
  Payments to affiliates                        (30,825)          -
Net cash used for financing activities          (40,396)      (50,038)

Net decrease in cash                               (418)       (1,858)
Cash at beginning of period                         427         1,867
Cash at end of period                          $      9      $      9


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest (net of capitalized amounts)      $  5,550      $  5,462
    Income taxes                               $  8,195      $  4,638











                         See accompanying notes.

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                        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 "Parent" and together with its subsidiaries is collectively
     referred to as "COM/Energy."  The Parent 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.  In
     December 1998, the Parent signed an Agreement and Plan of Merger with BEC
     Energy, the parent company of Boston Edison Company, that will create an
     energy delivery company serving approximately 1.3 million customers
     located entirely within Massachusetts including more than one million
     electric customers in 81 communities and the Company's 240,000 gas
     customers in 51 communities.

         The Company has 595 regular employees including 401 (67%) who are
     represented by three collective bargaining units with contracts in place
     until March and June of 2002 and April of 2003.

(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 1998 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,
     1999 and 1998 reflect, in the opinion of the Company, all adjustments
     necessary to summarize fairly the results for such periods.  In addition,
     certain prior period amounts are reclassified from time to time to
     conform with the presentation used in the current period's financial
     statements.

         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.


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                        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,
                                               1999           1998
                                              (Dollars in thousands)

      Postretirement benefits costs          $ 8,049        $ 8,568
      FERC Order 636 transition costs          6,206          5,968
      Environmental costs                      5,469          5,080
                                             $19,724        $19,616

         The principal regulatory liability, reflected in deferred credits-
    other and relating to income taxes, was $7.9 million at June 30, 1999 and
    $8 million at December 31, 1998.

(3) Commitments

         Construction Program

         The Company is engaged in a continuous construction program presently
    estimated at $93.4 million for the five-year period 1999 through 2003.  Of
    that amount, $18.6 million is estimated for 1999.  As of June 30, 1999,
    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.


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                        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, 1999 and 1998 and total throughput for these periods is shown below:

                                   Three Months          Six Months
                                   Ended June 30,       Ended June 30,
                                   1999 and 1998        1999 and 1998
                                         Increase (Decrease)
                                       (Dollars in thousands)

Gas Operating Revenues         $(2,403)   (4.3)%    $   (871)   (0.5)%

Operating Expenses -
  Cost of gas sold              (5,525)  (16.9)       (8,157)   (9.3)
  Other operation and maintenance   517    2.6         1,907     4.8
  Depreciation                      88     4.8            86     1.3
  Taxes -
    Federal and state income     1,042    91.0         2,176    29.8
    Local property and other       101     6.3           219     4.0
                                (3,777)   (6.9)       (3,769)   (2.6)

Operating Income                 1,374   117.8         2,898    16.5

Other Income                       317   317.0           413   147.5

Income Before Interest Charges   1,691   133.6         3,311    18.5

Interest Charges                   114     4.1            56     1.0

Net Income                     $ 1,577   102.1      $  3,255    26.8

Firm Unit Sales - BBTU            (970)  (19.0)          870     4.4

    The following is a summary of total throughput for the periods indicated:

          Total Throughput - In Billions of British Thermal Units (BBTU)

                                 Total
                             Interruptible    Total   Trans-   Through-
                       Firm     and Other      Sales portation   put
Three Months Ended
 June 30, 1999         4,137      841        4,978     3,139     8,117
 June 30, 1998         5,107    1,354        6,461     2,239     8,700

Six Months Ended
 June 30, 1999        20,435    2,740       23,175     5,920    29,095
 June 30, 1998        19,565    2,917       22,482     5,398    27,880

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                        COMMONWEALTH GAS COMPANY

Operating Revenues and Unit Sales

    Operating revenues for the current quarter decreased by $2.4 million due
primarily to the 23% decrease in total unit sales and a $5.5 million decrease
in the cost of gas sold offset, in part, by a $1.7 million increase in
transportation revenues.  For the current six-month period, operating revenues
decreased by $871,000 due to an $8.2 million decrease in the cost of gas sold
offset to a significant degree by higher transportation revenues ($3 million)
and a 3.1% increase in total unit sales.

    The 4.4% increase in unit sales to firm customers during the current six-
month period reflects higher sales to all customer segments due to colder
weather conditions experienced during the first quarter of 1999 compared to
the same period last year.  The 19% decrease in firm unit sales for the
current quarter reflects the warmer weather experienced throughout the region
during that time.  The fluctuation in interruptible and other sales reflects
the competitive market that exists today in the natural gas industry.

Other Operation and Maintenance

    Other operation and maintenance increased by $517,000 (2.6%) in the
current quarter due primarily to increases in employee benefit and insurance
costs ($338,000) and higher costs associated with a services company affiliate
which provides accounting, legal, computer-related and other services
(approximately $300,000).  The $1.9 million (4.8%) increase in other operation
and maintenance costs for the current quarter reflects higher costs associated
with the aforementioned services company affiliate (approximately $900,000),
the absence in the current period of an adjustment to year-end 1997 payroll
(made in January 1998) related to the 1997 personnel reduction program
($527,000), higher maintenance costs associated with the Company's
distribution system ($197,000) and an increase in the provision for bad debts
($159,000).

Taxes

    The increase in federal and state income taxes for both current periods
was due to the level of pre-tax income.  Local property and other taxes
increased due primarily to higher tax rates and valuations in the Company's
service territory.

Other Income

    The increase in other income for both current periods was due primarily to
higher revenues associated with the Company's merchandising program for water
heaters and heating systems and interest earned from the Company's
participation in the COM/Energy Money Pool.

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

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                        COMMONWEALTH GAS COMPANY

costs may not be recoverable in rates.  For further information on other
related environmental matters, refer to the Company's 1998 Annual Report on
Form 10-K.

Merger with BEC Energy

    The electric utility industry has continued to change in response to
legislative and regulatory mandates that are aimed at lowering prices for
energy by creating a more competitive marketplace.  These pressures have
resulted in an increasing trend in the electric industry to seek competitive
advantages and other benefits through business combinations.  On December 5,
1998, COM/Energy and BEC Energy (BEC), headquartered in Boston, Massachusetts,
entered into an Agreement and Plan of Merger (the Merger Agreement).  Pursuant
to the Merger Agreement, COM/Energy and BEC will be merged into a new holding
company to be known as NSTAR.  The merger will create an energy delivery
company serving approximately 1.3 million customers located entirely within
Massachusetts, including more than one million electric customers in 81
communities and 240,000 gas customers in 51 communities.  The merger is
expected to occur shortly after the satisfaction of certain conditions,
including the receipt of the required approvals.  On June 24, 1999, common
shareholders of COM/Energy and BEC approved the merger.  On June 30, 1999, the
FERC approved the merger.  On July 27, 1999, the DTE approved the rate plan
filed by the retail utility subsidiaries of the two companies that is an
integral part of the merger.  On August 16, 1999, the Massachusetts Attorney
General's Office and a group of four intervenors filed appeals of the DTE's
rate plan order with the Massachusetts Supreme Judicial Court.  The
significant elements of the rate plan include a four-year distribution rate
freeze for each of the NSTAR retail utility subsidiaries and recovery of all
merger-related costs including an acquisition premium of approximately $516
million.  On August 11, 1999, the Nuclear Regulatory Commission approved the
transfer of control of Canal Electric's interest in the Seabrook nuclear
generating plant from COM/Energy to NSTAR.  The remaining merger approval from
the Securities and Exchange Commission is expected to be issued in August.

    The Merger Agreement may be terminated under certain circumstances,
including by any party if the merger is not consummated by December 5, 1999,
subject to an automatic extension of six months if the requisite regulatory
approvals have not yet been obtained by such date.  The merger will be
accounted for as an acquisition of COM/Energy by BEC using the purchase method
of accounting.

    Upon effectiveness of the merger, Thomas J. May, BEC's current Chairman,
President and Chief Executive Officer (CEO), will become the Chairman and CEO
of NSTAR.  Russell D. Wright, COM/Energy's current President and CEO, will
become the President and Chief Operating Officer of NSTAR and will serve on
NSTAR's board of trustees. Also, upon effectiveness of the merger, NSTAR's
board of trustees will consist of COM/Energy's and BEC's current trustees.

Year 2000

    The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year.  Any computer
program that has date sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000.  This could result in a temporary

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                        COMMONWEALTH GAS COMPANY

inability to process transactions or engage in normal business activities.
COM/Energy has been involved in Year 2000 compliancy since 1996.

    COM/Energy, on a coordinated basis and with the assistance of RCG Informa-
tion Technologies and other consultants, is addressing the Year 2000 issue.
COM/Energy has followed a five-phase process in its Year 2000 compliance
efforts, as follows: Awareness (through a series of internal announcements to
employees and through contacts with vendors); Inventory (all computers,
applications and embedded systems that could potentially be affected by the
Year 2000 problem); Assessment (all applications or components and the impact
on overall business operations and a plan to correct deficiencies and the cost
to do so); Remediation (the modification, upgrade or replacement of deficient
hardware and software applications and infrastructure modifications); and
Testing (a detailed, comprehensive testing program for the modified critical
component, system or software that involves the planning, execution and
analysis of results).

    COM/Energy's inventory phase required an assessment of all date sensitive
information and transaction processing computer systems and determined that
approximately 90% of its software systems needed some modifications or
replacement.  Plans were developed, implemented, and all of these systems have
been modified, upgraded or replaced.  COM/Energy is currently at a 98%
completion level in its five-phase process for all systems, with completion of
the last stages of its extensive testing process for the final six systems
expected by September 30, 1999.

    COM/Energy has also inventoried its non-information technology systems
that may be date sensitive (facilities, electric and gas operations, energy
supply/production and distribution) that use embedded technology such as
micro-controllers and micro-processors.  COM/Energy has completed its
assessment of these non-information technology systems and determined that 20%
of these systems required remediation or replacement.  COM/Energy has reported
to the North American Electric Reliability Council (NERC) that it met the NERC
target date of June 30, 1999 for 100% readiness of all its mission critical
components required for the continued safe and reliable delivery of electrici-
ty into the Year 2000.  COM/Energy's gas and other operations are also at a
100% completion level for all mission critical issues regarding Year 2000
readiness.  Overall, the non-information technology systems are at a 99%
completion level, with the final items scheduled for completion by August 31,
1999.

    Modifying and testing COM/Energy's information and transaction processing
systems from 1996 through 2000 is currently expected to cost approximately
$10.2 million, including approximately $900,000, $3.1 million and $3.2 million
incurred through 1997, 1998 and the first half of 1999, respectively.
Approximately $3 million is expected to be spent during the remainder of 1999
and in 2000.  Year 2000 costs have been expensed as incurred and will continue
to be funded from operations.

    In addition to its internal efforts, COM/Energy has initiated formal
communications with its significant suppliers to determine the extent to which
COM/Energy may be vulnerable to its suppliers' failure to correct their own
Year 2000 issues.  COM/Energy has ranked its vendors in terms of importance,
and as of June 30, 1999 has received adequate responses from 100% of its
"critical" and "high" rated vendors.  Failure of COM/Energy's significant

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                        COMMONWEALTH GAS COMPANY

suppliers to address Year 2000 issues could have a material adverse effect on
COM/Energy's operations, although it is not possible at this time to quantify
the amount of business that might be lost or the costs that could be incurred
by COM/Energy.  Contact with all other vendors is continuing and inadequate
responses are being pursued by COM/Energy.  COM/Energy is prepared to replace
certain suppliers or to initiate other contingency plans for any vendor not
responding to COM/Energy's satisfaction.

    In addition, parts of the global infrastructure, including national
banking systems, electrical power grids, gas pipelines, transportation
facilities, communications and governmental activities, may not be fully
functional after 1999.  Infrastructure failures could significantly reduce
COM/Energy's ability to acquire energy and its ability to serve its customers
as effectively as they are now being served.  COM/Energy has identified the
elements of the infrastructure that are critical to its operations and has
requested and obtained information as to the expected Year 2000 readiness of
these elements.

    COM/Energy has completed the development of its Year 2000 contingency
plans for all operational areas that may be effected by Year 2000 issues.
COM/Energy's gas and electric operations currently have emergency operating
plans, as well as information technology disaster recovery plans, as compo-
nents of their standard operating procedures.  These plans have been enhanced,
identifying potential Year 2000 risks to normal operations and the appropriate
response to these potential failures.  These plans also include actions to be
taken in the event of third party and infrastructure failures with regard to
the Year 2000 event, although in certain cases, there may be no practical
alternative course of action available to COM/Energy.  The implementation of
the contingency plans will continue throughout the remainder of 1999.

    COM/Energy is working with other energy industry entities, both regionally
and nationally, with respect to Year 2000 readiness and is cooperating in the
development of local and wide-scale contingency planning.

    While COM/Energy believes its efforts to address the Year 2000 issue will
allow it to be successful in avoiding any material adverse effect on
COM/Energy's operations or financial condition, it recognizes that failing to
resolve Year 2000 issues on a timely basis would, in a "most reasonably likely
worst case scenario," significantly limit its ability to acquire and distrib-
ute energy and process its daily business transactions for a period of time,
especially if such failure is coupled with third party or infrastructure
failures.  Similarly, COM/Energy could be significantly effected by the
failure of one or more significant suppliers, customers or components of the
infrastructure to conduct their respective operations after 1999.  Adverse
affects on COM/Energy could include, among other things, business disruption,
increased costs, loss of business and other similar risks.

    The foregoing discussion regarding Year 2000 project timing, effective-
ness, implementation and costs includes forward-looking statements that are
based on management's current evaluation using available information.  Factors
that might cause material changes include,but are not limited to, the avail-
ability of key Year 2000 personnel, the readiness of third parties, and
COM/Energy's ability to respond to unforeseen Year 2000 complications.

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                        COMMONWEALTH GAS COMPANY

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, 2000
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
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.

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                        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
         six months ended June 30, 1999.

    (b)  Reports on Form 8-K

         No reports on Form 8-K were filed for the three months ended June 30,
         1999.

<PAGE>
<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 16, 1999