SECURITIES AND EXCHANGE COMMISSION

                    Washington, DC  20549



                        FORM 10-Q



[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 0-493



                    CONSUMERS WATER COMPANY

      (Exact name of registrant as specified in its Charter)



              Maine                    01-0049450 

-------------------------------       ----------------------

(State or other jurisdiction of       (I.R.S. Employer 

 incorporation or organization)        identification number)

  

Three Canal Plaza, Portland, ME                04101 

-------------------------------                -----

(Address of principal executive offices)      (Zip Code)



Registrant's telephone number: (207) 773-6438





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



The number of common shares of Consumers Water Company

outstanding as of August 3, 1998 was 9,010,305.





                        Part I Item I

                        -------------

           Consumers Water Company and Subsidiaries

                  CONSOLIDATED BALANCE SHEETS

                    (Dollars in Thousands)

                                                                 

                                        June 30,     December 31,

                                           1998             1997 

                                        -------------------------

                                        (Unaudited)

ASSETS

-------

PROPERTY, PLANT AND EQUIPMENT, AT COST:

    Plant in service                     $470,852        $499,087

    Less - Accumulated depreciation        93,535          92,787

                                        -------------------------



                                          377,317         406,300

    Construction work in progress          13,529          11,843

                                          -----------------------

Net property, plant and equipment         390,846         418,143

                                          -----------------------

Assets of Discontinued Operations,          2,550           2,679

                                          -----------------------

Investments, at cost                        1,778           1,520

                                          -----------------------



CURRENT ASSETS:

    Cash and cash equivalents               4,071           2,694

    Accounts receivable, net of reserves of

            $944 in 1998 and $924 in 1997   8,302           8,695

    Unbilled revenue                        5,462           5,077

    Inventories                             2,031           2,068

    Prepayments and other                   4,121           6,585

                                          -----------------------

Total current assets                       23,987          25,119

                                          -----------------------



OTHER ASSETS:

  Funds restricted for construction activity  852           1,079

  Deferred charges and other assets        16,481          17,159

                                          -----------------------

                                           17,333          18,238

                                          -----------------------

                                         $436,494        $465,699

                                          =======================



The accompanying notes are an integral part of these consolidated 

financial statements.





           Consumers Water Company and Subsidiaries

                 CONSOLIDATED BALANCE SHEETS

                    (Dollars in Thousands)

SHAREHOLDERS' INVESTMENT AND LIABILITIES

----------------------------------------

CAPITALIZATION:

  Common Stock, $1 par value

    Authorized: 15,000,000 shares

     Issued: 9,008,305 shares in 1998 and

                 8,967,894 in 1997       $  9,008        $  8,968

  Amounts in excess of par value           80,256          79,555

  Reinvested Earnings                      23,906          20,134

                                          -----------------------

                                          113,170         108,657

  Preferred shareholders' investment        1,044           1,044

  Minority interest                         2,371           2,370

  Long-term debt                          151,119         171,771

                                          -----------------------

      Total capitalization                267,704         283,842

                                          -----------------------

Contributions in Aid of Construction       72,630          77,297

                                          -----------------------



CURRENT LIABILITIES:

  Notes payable                            11,660          18,830

  Sinking fund requirements

      and current maturities                  531             836

  Accounts payable                          2,884           5,177

  Accrued taxes                             7,644           9,945

  Accrued interest                          3,702           3,919

  Dividends payable                         2,757           2,754

  Accrued expenses                         10,766          10,310

                                          -----------------------

      Total current liabilities            39,944          51,771

                                          -----------------------

COMMITMENTS AND CONTINGENCIES

-----------------------------

DEFERRED CREDITS:

  Customers' advances for construction     22,464          22,049

  Deferred income taxes                    29,712          26,246

  Unamortized investment tax credits        4,040           4,494

                                          -----------------------

                                           56,216          52,789

                                          -----------------------

                                         $436,494        $465,699

                                         ========================

Book Value Per Share of Common Stock       $12.56          $12.12



The accompanying notes are an integral part of these consolidated 

financial statements.





         Consumers Water Company and Subsidiaries

             CONSOLIDATED STATEMENTS OF INCOME

                        (Unaudited)

          (In Thousands Except Per Share Amounts)

For the six months ended June 30,            1998            1997

                                          -----------------------

Operating Revenue                         $47,562         $47,149

                                          -----------------------

Costs and Expenses:

  Operations and maintenance               20,563         21,187

  Depreciation                              6,036          5,679

  Taxes other than income                   6,176          6,297

                                          -----------------------



Operating Expenses                         32,775         33,163

                                          -----------------------



Operating Income                           14,787         13,986

                                          -----------------------



Other Income and (Expense):

  Interest expense                         (6,987)        (7,564)

  Construction interest capitalized           150            191

  Preferred dividends and minority

          interest of subsidiaries            (65)           (70)

  Gains from sales of properties            6,680             16

  Other                                       679            513

                                          -----------------------



                                              457         (6,914)

                                          -----------------------



Earnings From Continuing Operations

           Before Income   Taxes           15,244          7,072

Income Taxes                                5,943          2,552

                                          -----------------------



Total Income from Continuing Operations     9,301          4,520

                                          -----------------------



Loss From Discontinued Operations:

  Before Discontinuance, Net of Taxes           0           (387)

  Provision for Loss on Disposal of 

     Discontinued Operations Net of Taxes       0         (1,500)

                                          -----------------------



  Total from Discontinued Operations            0         (1,887)

                                          -----------------------



Net Income (Loss)                          $9,301         $2,633

                                          =======================

Weighted Average Shares Outstanding         8,997          8,799

Basic Earnings (Loss) per Common Share:

     Continuing Operations                  $1.03          $0.51

                                          =======================

  Discontinued Operations -

     Before Discontinuance                  $0.00         ($0.04)

     Loss from Disposal of 

          Discontinued Operations           $0.00         ($0.17)

                                          -----------------------



     Total Discontinued Operations          $0.00         ($0.21)

                                          -----------------------

Total Basic Earnings (Loss)

           per Common Share                 $1.03          $0.30

                                          =======================



Diluted Earnings (Loss) per Common Share:

     Continuing Operations                  $1.03          $0.51

                                          =======================

  Discontinued Operations -

     Before Discontinuance                  $0.00          ($0.04)

     Loss from Disposal of

           Discontinued Operations          $0.00          ($0.17)

                                          -----------------------



     Total Discontinued Operations          $0.00          ($0.21)

                                          -----------------------



Total Diluted Earnings (Loss)

           per Common Share                 $1.03           $0.30

                                          =======================



Dividends Declared Per Common Share         $0.61           $0.60

                                          -----------------------





The accompanying notes are an integral part of these consolidated 

financial statements.





           Consumers Water Company and Subsidiaries

              CONSOLIDATED STATEMENTS OF INCOME

                        (Unaudited)

            (In Thousands Except Per Share Amounts)



For  the three months ended June 30,        1998            1997

                                          -----------------------



Operating Revenue                         $24,155         $24,218

                                          -----------------------



COSTS AND EXPENSES:

    Operations and maintenance             10,313          10,550

    Depreciation                            2,948           2,828

    Taxes other than income                 2,897           3,175

                                          -----------------------



Operating Expenses                         16,158          16,553

                                          -----------------------



Operating Income                            7,997           7,665

                                          -----------------------



OTHER INCOME AND (EXPENSE):

    Interest expense                       (3,278)         (3,833)

    Construction interest capitalized          83              75

    Preferred dividends and minority

            interest of subsidiaries          (43)            (41)

    Gains on sales of properties            6,680              16

    Other                                     347             324

                                          -----------------------



                                            3,789          (3,459)

                                          -----------------------



EARNINGS FROM CONTINUING OPERATIONS:

    Before Income   Taxes                  11,786           4,206

    Income Taxes                            4,644           1,520

                                          -----------------------



    Total from Continuing Operations        7,142           2,686

                                          -----------------------



Net Income                                 $7,142          $2,686

                                          =======================

Weighted Average Shares Outstanding         9,007           8,831

BASIC EARNINGS PER COMMON SHARE:

Total Basic Earnings per Common Share       $0.79           $0.30

                                          =======================

DILUTED EARNINGS PER COMMON SHARE:

Total Diluted Earnings per Common Share     $0.79           $0.30

                                          =======================

Dividends Declared Per Common Share         $0.305          $0.30

                                          =======================



The accompanying notes are an integral part of these consolidated

financial statements.





            Consumers Water Company and Subsidiaries

             CONSOLIDATED STATEMENTS OF CASH FLOWS

                          (Unaudited)

                                                                 

                 (Dollars in Thousands)



For the six months ended June 30,                1998         1997

                                          ------------------------

OPERATING ACTIVITIES:

    Net income                                 $9,301      $2,633

ADJUSTMENTS TO RECONCILE NET INCOME TO NET

    CASH PROVIDED  BY OPERATING ACTIVITIES:

    Depreciation and amortization               6,754       6,604

    Deferred income taxes and 

             investment tax credits             3,012         630

    Gains on sales of properties               (6,680)        (16)

    Changes in assets and liabilities:

        Increase in accounts receivable 

                  and unbilled revenue           (673)       (480)

        Increase in inventories                   (83)        (91)

        Decrease in prepaid expenses            2,434       2,583

        Decrease in accounts payable 

                and accrued expenses           (2,942)     (2,162)

    Change in other assets, net of change 

         in other liabilities of 

         continuing operations                 (1,014)       (377)

    Change in assets, net of change in 

         liabilities of discontinued operations   129         220

    Loss on disposal of discontinued operations     0       1,500

                                          ------------------------

        Total adjustments                         937       8,411

                                          ------------------------

        Net cash provided by operating

                 activities                    10,238      11,044

                                          ------------------------

INVESTING ACTIVITIES:

    Capital expenditures                      (10,003)     (9,746)

    Decrease in funds restricted for

              construction activity               227         688

    Decrease in construction accounts payable  (1,234)     (2,221)

    Proceeds from sales of properties          33,728          18

                                          ------------------------

        Net cash (used) provided by

                investing activities           22,718     (11,261)

                                          ------------------------



FINANCING ACTIVITIES:

    Net borrowings (repayment)

            of short-term debt                 (7,170)      3,021

    Proceeds from issuance of long-term debt    1,875

    Repayment of long-term debt               (22,832)     (1,076)

    Proceeds from issuance of stock               741       2,219

    Advances and contributions 

          in aid of construction                1,497       2,197

    Repayments of advances                       (164)       (223)

    Taxes paid by developers on advances and

        contributions in aid of construction        0         (28)

    Cash dividends paid                        (5,526)     (5,302)

                                          ------------------------

        Net cash (used) provided by

                   financing activities       (31,579)        808

                                          ------------------------

    Net increase in cash and cash equivalents   1,377         591



    Cash and cash equivalents at

               beginning of year                2,694       1,775

                                          ------------------------

                                                                 

    Cash and cash equivalents at end of period $4,071      $2,366

                                          ------------------------



SUPPLEMENTAL DISCLOSURES OF CASH FLOW 

    INFORMATION FROM CONTINUING OPERATIONS:

  Cash paid during the period for:

    Interest (net of amounts capitalized)      $6,747      $7,188

    Income taxes                               $1,763        $689



NON-CASH INVESTING AND FINANCING

    ACTIVITIES FOR THE PERIOD:

  Property advanced or contributed             $1,681        $550



The accompanying notes are an integral part of these consolidated

financial statements.



               CONSUMERS WATER COMPANY AND SUBSIDIARIES

                    NOTES TO FINANCIAL STATEMENTS

                             (Unaudited)

                            June 30, 1998



                           PART I  ITEM 1

                           --------------



A.           PREPARATION OF FINANCIAL STATEMENTS



The condensed financial statements included herein have been 

prepared by the registrant, without audit, pursuant to the rules 

and regulations of the Securities and Exchange Commission.  

Certain information and footnote disclosures normally included in 

financial statements prepared in accordance with generally 

accepted accounting principles have been condensed or omitted 

pursuant to such rules and regulations, although the registrant 

believes that the disclosures which are made are adequate to make 

the information presented not misleading, particularly when read 

in conjunction with the financial statements and notes thereto 

included in the registrants' latest annual report on Form 10-K.  

In management's opinion, the attached interim financial 

statements reflect all adjustments which are necessary for a fair 

statement of the results for the periods presented.  All 

adjustments made were of a normal and recurring nature except for 

the discontinued operations described below.



B.           EARNINGS PER SHARE



Earnings per common share are based on the weighted average 

number of shares and common share equivalents actually 

outstanding during the period.  The effect of employee stock 

options which are included as common share equivalents is not 

material.



C.          MERGER AGREEMENT



On June 27, 1998, The Company entered into a definitive agreement 

to merge with Philadelphia Suburban Corporation (PSC) for 

approximately $270 million in common stock.  The merger, which is 

subject to customary closing conditions, including approval of 

the shareholders of both companies and the various state 

regulatory agencies, is expected to close before the end of the 

year.  Under the terms of the stock merger agreement, Consumers' 

common shareholders will receive 1.459 shares of PSC's common 

stock for each Consumers common share subject to a collar and 

Consumers' preferred shareholders will receive 5.756 shares of 

PSC's common stock for each Consumers' preferred share subject to 

a collar.  Consumers would become a wholly-owned subsidiary of 

PSC.  The merger will be accounted  for as a pooling-of-interests 

under Accounting Principles Board Opinion No. 16.



D.           DISCONTINUED OPERATIONS



On April 29, 1997, the Company announced its intention to dispose 

of its technical services company, Consumers Applied 

Technologies, Inc (CAT).  The Company has been unsuccessful in 

selling CAT as an on-going business and is proceeding with its 

liquidation.  Estimated loss on the disposal of $1.5 million, net 

of tax benefits of $773,000 was recorded in the first quarter of 

1997.  In the fourth quarter an additional reserve of $850,000 

net of tax benefits of $438,000 was recorded to reflect 

additional expenses associated with the completion of contracts.  

CAT's operations were substantially shutdown during 1997.  CAT 

continues to be responsible for certain long-term contracts, 

however.  The operating results of CAT prior to the date of 

discontinuance are shown under Discontinued Operations on the 

accompanying Consolidated Statements of Income and all financial 

statements of prior periods have been restated.  Total sales for 

the discontinued operations for the first half of 1998 and 1997 

were $54,000 and $3,607,000, respectively.  Net assets of the 

discontinued operations approximate realizable value.  A summary 

of the net assets of discontinued operations follows:



                                         June 30,     December 31,

                                             1998             1997

------------------------------------------------------------------

Cash                                   $   46,000       $  332,000

Receivables, net                          997,000        1,815,000

Income taxes receivable                 2,353,000        2,443,000

Other current assets                        5,000           16,000

                                      -----------      -----------

     Total assets                      $3,401,000       $4,606,000

                                      -----------      -----------





Accounts payable                       $   18,000       $   17,000

Accrued expenses                          740,000        1,816,000

Other                                      93,000           94,000

                                      -----------      -----------

Total liabilities                      $  851,000       $1,927,000

                                      -----------      -----------

Net assets of discontinued operations  $2,550,000       $2,679,000

                                      ===========      ===========



E.           SALE OF CONSUMERS NEW HAMPSHIRE WATER COMPANY



On April 9, 1998, Consumers New Hampshire Water Company sold its 

utility assets to the Town of Hudson under the New Hampshire 

condemnation statute for $33.7 million net of certain closing 

costs.  The sale generated a gain of $3.9 million, net of taxes, 

or $0.43 per share which was recorded in the second quarter of 

1998.  Consumers New Hampshire had $6.5 million in sales, 

$744,000 in net income, and 8,229 customers in 1997. 







                          PART I   ITEM 2

                          ---------------



Management's Discussion and Analysis of Financial Conditions and 

Results of Operations.



The following discussion and analysis sets forth certain factors 

relative to the Company's financial condition at June 30, 1998 

and the results of  its operations for the six months and the 

three months then ended as compared to the same period of the 

prior year.



LIQUIDITY AND CAPITAL RESOURCES



CONSTRUCTION PROGRAM



Capital construction expenditures totaled $8.7 million, net of 

contributions and advances, in the first half of 1998, 

substantially all of which relates to the Company's utility 

subsidiaries. Projects included $2.4 million spent on the major 

plant replacement described below, and many smaller projects 

around the Company.



The Company expects capital expenditures for 1998 through 2000 to 

be $72 million, net of contributions and advances.  The capital 

construction budget is down from its peak of $103 million for the 

1995-1997 planning period as a result of the completion of many 

of the improvements required by the Safe Drinking Water Act 

(SDWA), the Clean Water Act (CWA), and other regulations.  With 

the reduced capital spending due to regulatory requirements, the 

Company has increased its focus on replacing aging 

infrastructure.



The Company is engaged in a project that will replace a major 

plant at Consumers Pennsylvania Water Company - Shenango Valley 

Division (Shenango).  The cost of this project is estimated at 

$32 million when it is completed in 2000.  This will replace one 

of the Company's oldest water treatment plants.  Current and 

future water quality regulations along with future demand 

projections require that the existing plant be retired and 

replaced with a new facility.  The design is complete and 

construction has commenced.  The Company expects to finance this 

project with tax exempt debt and equity.



Several of the Company's water utility subsidiaries have filed or 

plan to file rate cases in their respective jurisdictions for 

recovery of and return on capital used to fund their capital 

expenditure programs.  Costs which have been prudently incurred 

in the judgement of the appropriate public utility commission 

have been, and are expected to continue to be, recognized in rate 

setting. The Company has had large rate increases in prior years 

which lead to increased scrutiny of rate filings.  With the 

declining capital construction budgets the Company is seeing an 

improvement in its ability to obtain timely rate relief.





FINANCING AND CAPITALIZATION



Water utilities now require higher equity ratios than in the past 

to maintain favorable debt ratings due to the recognition by 

Standard & Poor's rating system of the additional risk of the 

SDWA requirements and the uncertainty of future regulatory 

treatment of the cost of these requirements. Due to this need for 

higher equity ratios and the size of the Company's capital 

spending program, the Company had expected to return to the 

equity market.  However, the sale of Consumers New Hampshire 

generated over $19 million in cash which was used to pay down 

long-term debt.  This is expected to delay the Company's need to 

return to the equity market for a few years. The Company's 

subsidiaries anticipate continuing to fund their immediate cash 

flow needs with short-term lines of credit until a subsidiary's 

short-term debt level is high enough to warrant placement of 

long-term debt, generally, in the $4-6 million range.  The 

Company's subsidiaries had unused lines of credit available at 

June 30, 1998 of $77.6 million.  In addition, the Company has 

three revolving credit agreements with a total availability of 

$35.0 million.  Two of these agreements are committed until mid-

1999 and one for $15 million is committed until mid-2000.  

Borrowings under these agreements were used primarily to provide 

equity infusions to the subsidiaries.  In addition to short-term 

debt, the Company's water utility subsidiaries plan to continue 

to use tax-exempt, long-term debt financing in appropriate 

situations.



Retained earnings increased by $3,772,000 in the first half of 

1998.  This reflects the gain from the sale of Consumers New 

Hampshire of $3.9 million, the seasonality of the Company's 

business and the continuation of its dividend policy.



ACQUISITIONS AND DISPOSITIONS



Over the past five years, the Company has acquired six water 

systems.  Management anticipates continuing the acquisition 

policy of recent years.



The Company has sold six divisions with customers totaling 

approximately 23,000 under the threat of eminent domain since 

1991.  The gain on these sales totaled over $10.9 million.  This 

includes the April 9, 1998 sale of Consumers New Hampshire Water 

Company's utility assets to the Town of Hudson under the New 

Hampshire condemnation statute for $33.7 million net of certain 

closing costs.  The sale generated a gain of $3.9 million, net of 

taxes, or $0.43 per share, and was recorded in the second quarter 

of 1998.  Consumers New Hampshire had $6.5 million in sales, 

$744,000 in net income and 8,229 customers in 1997.  It is 

expected that interest savings associated with paying off the 

revolving credit agreements will help offset the loss of New 

Hampshire's normal contribution to income.  The Company continues 

to work with the local communities in its service areas in an 

effort to prevent future eminent domain proceedings.



OTHER



On June 27, 1998, The Company entered into a definitive agreement 

to merge with Philadelphia Suburban Corporation (PSC) for 

approximately $270 million in common stock.  The merger, which is 

subject to customary closing conditions, including approval of 

the shareholders of both companies and the various state 

regulatory agencies, is expected to close before the end of the 

year.  Under the terms of the stock merger agreement, Consumers' 

common shareholders will receive 1.459 shares of PSC's common 

stock for each Consumers' share subject to a collar and 

Consumers' preferred shareholders will receive 5.756 shares of 

PSC's common stock for each Consumers' preferred share subject to 

a collar.  Consumers would become a wholly-owned subsidiary of 

PSC which may have a significant impact on the Company's 

liquidity and capital resources.  The merger will be accounted  

for as a pooling-of-interests under Accounting Principles Board 

Opinion No. 16.



In 1985, the Company's subsidiary, Consumers Maine Water Company, 

started construction of a transmission main to Fish and Hobbs 

ponds, which are located in Hope, Maine, to increase the 

available water supply of its Camden and Rockland Division.  Due 

to local opposition related to the uncertainty about the 

environmental impact of withdrawing water from these ponds, the 

project was delayed.  In 1989, final legislation was passed that 

imposed a moratorium on the withdrawal of water from these ponds. 

 The Maine Public Utilities Commission (MPUC) ordered Consumers 

Maine to defer the costs of the project, the legal costs of 

defending its water rights and carrying costs until its first 

rate case after June 1, 1997.  Consumers Maine currently has 

approximately $600,000 on its balance sheet related to this 

project and expects to file a rate case with the MPUC in 1998 

seeking recovery of these costs.



Following an audit of the Company, the Maine State Tax Assessor 

assessed additional state corporate income taxes against the 

Company for the period 1988 to 1993 due to the application of the 

unitary tax method.  The amount of the additional taxes, 

penalties and interest assessed was $586,207.11 as of February 

15, 1998.  As a result of the denial of the Company's request for 

reconsideration of the additional assessment, the Company filed a 

petition for Review and DeNovo Determination of the assessment 

with the Cumberland County Superior Court of the State of Maine 

on March 5, 1998.  In its petition, the Company seeks a final 

determination that a portion of the assessment is barred by the 

statute of limitations and that the entire assessment is improper 

on several grounds, including that it represents an inappropriate 

application of the state's unitary tax method for the years 

subject to the audit.  As part of its normal business practice, 

the Company maintains a reserve for possible additional tax 

assessments from taxing authorities.  The Company expects this 

reserve to be adequate to cover this assessment.  Therefore the 

Company does not expect that the amount of taxes, interest and 

penalties finally determined to be due will have a material 

impact on its financial position, results of operations or cash 

flows.



The Company has completed a review of the computer programs used 

in its business to determine the risk that those systems might 

fail due to the so-called "millennium bug" which causes 

computer systems to fail or malfunction as a result of their 

inability to distinguish dates after December 31, 1999 using a 

two digit entry field. The Company's computer systems can be 

divided into three categories: the Financial Information System, 

the Customer Information System, and other systems.  The Company 

plans on replacing the Financial Information System during 1998 

due primarily to the age of the system.  The new system is 

expected to cost approximately $2.5 million in total.  Most of 

the costs of the new system pertain to hardware or software and 

therefore will be capitalized.  Training, data conversion, and 

other costs will be expensed.  It is expected that efficiency 

gains from the new system will offset many of these costs.  The 

Company has completed and tested updates to the Customer 

Information System.  This work was completed with in-house 

resources and therefore added no significant incremental costs.  

The Company is continuing to evaluate its other systems but does 

not expect the cost of updating these systems to be material.  

The Company believes that its plan minimizes the risk of failure 

in its computer systems due to the millennium bug.



The Company recently announced its intention to form Consumers 

Services Company to provide financial support services to the 

Company's water utilities beginning in September of 1998.  

Consumers Service Company is currently operating as a division of 

the Company.  These services are now provided by the Company in 

part and by each water utility subsidiary in part.  Other support 

services such as engineering and human resources may be added in 

the future.







RESULTS OF OPERATIONS



First Half 1998, Compared to First Half 1997



REVENUE



Revenues increased $413,000 or .9% for the six months ended June 

30, 1998 compared to the same period in 1997 due primarily to 

rate increases of $1,463,000 and increased consumption.  These 

increases were offset, in part, by the lost revenues due to the 

sale of Consumers New Hampshire on April 9, 1998 of $1,678,000.  

Two rate cases have been settled in 1998 for additional annual 

revenues of $2,749,000.  Currently, two additional rate cases 

have been filed with annual revenue requests totaling $601,000.



OPERATING EXPENSE



Operating expenses decreased $388,000 or 1.2% for the six months 

ended June 30, 1998 compared to the same period in 1997.  The 

impact on expenses from the sale of Consumers New Hampshire was a 

$1,120,000 decrease.  This was partly offset by expense increases 

in the rest of the Company.  Depreciation in the rest of the 

Company increased $487,000.  Increased depreciation on the old 

Shenango Plant accounted for $340,000 of the increase.  Shenango 

is in the process of building a new treatment plant.  In their 

last rate case they were allowed these accelerated depreciation 

rates in order to recover the cost of the old plant.  The 

remainder of the increase is due to higher plant balances 

throughout the Company.  Other operating expenses increased by 

just $161,000, or .8%, due to the Company's cost control efforts. 

 The Company began an aggressive cost control program in the 

second quarter of 1997 which continues to date.



INTEREST EXPENSE



Interest expense net of interest capitalized decreased $536,000 

or 7.3% for the six months ended June 30, 1998 compared to the 

same period in 1997 due to debt which was paid down with the 

proceeds from the sale of Consumers New Hampshire.









Second Quarter 1998, Compared to Second Quarter 1997



REVENUE



Revenues decreased $63,000 for the three months ended 

June 30, 1998 compared to the same period in 1997 due primarily to 

lost revenues due to the sale of Consumers New Hampshire on 

April 9, 1998 of $1,678,000 partially offset by the impact of rate 

increases of $877,000 and increased consumption.



OPERATING EXPENSE



Operating expenses decreased $395,000 or 2.4% for the three 

months ended June 30, 1998 compared to the same period in 1997.  

The impact on expenses from the sale of Consumers New Hampshire 

was a $1,120,000 decrease.  This was partly offset by expense 

increases in the rest of the Company.  Depreciation in the rest 

of the Company increased $250,000.  Increased depreciation on the 

old Shenango Plant accounted for $170,000 of the increase.  

Shenango is in the process of building a new treatment plant.  In 

its last rate case Shenango was allowed to institute accelerated 

depreciation rates in order to recover the cost of the old plant. 

 The remainder of the increase is due to higher plant balances 

throughout the Company.  Other operating expenses increased by 

$451,000.  The Company began an aggressive cost control program 

in the second quarter of 1997 which continues to date.  Normal 

operating expense increases are reflected in the second quarter 

increase.



INTEREST EXPENSE



Interest expense net of interest capitalized decreased $563,000 

or 15.0% for the three months ended June 30, 1998 compared to the 

same period in 1997 due to debt which was paid down with the 

proceeds from the sale of Consumers New Hampshire.





                             PART II

                             -------







Item 4.      Submission of Matters to Vote of Security Holders



(a)     Election of Directors



At the Annual Meeting of Shareholders held in Portland, 

Maine on May 6, 1998, (the Annual Meeting) the shareholders 

of the Company elected the following directors until the 

1999 Annual Meeting and until their successors are elected 

and qualified, each receiving the vote of the holders of the 

Company's outstanding common and preferred shares, voting as 

one class, as follows:



                    ----------SHARES VOTED----------        BROKER

                      FOR       AGAINST     WITHHELD     NON-VOTES

Michel Avenas       6,829,550     ---        24,646         ---

Peter L. Haynes      6,830,013     ---        24,184         ---

Jack S. Ketchum      6,832,514     ---        21,681         ---

John E. Menario      6,832,268     ---        21,927         ---

Jane E. Newman      6,828,728     ---        25,469         ---

John E. Palmer, Jr. 6,831,764     ---        22,432         ---

John H. Schiavi     6,816,865     ---        37,332         ---

Robert O. Viets      6,831,636     ---        22,559         ---



No existing director's term of office continued after the 

meeting.  There was no solicitation in opposition to 

management's nominees and all nominees were elected without 

contest.



Item 6.      Exhibits and Reports on Form 8-K

(a)     Exhibits



          2.1     Agreement for Purchase and Sale of assets dated 

October 24, 1997 by and between Consumers New Hampshire Water 

Company and the Town of Hudson is incorporated by reference to 

Exhibit 2.1 to Consumers Water Company's Quarterly Report on Form 

10-Q for the Quarter ended September 30, 1997.



          2.2     Amended and Restated Agreement and Plan of 

Merger as of August 5, 1998 by and among Philadelphia Suburban 

Corporation, Consumers Acquisition Company and Consumers Water 

Company is filed herewith as Exhibit 2.2.  The Company agrees to 

furnish supplementally a copy of the schedules omitted to the 

Commission upon request.



          27.      Financial Data Schedule is submitted herewith 

as Exhibit 27.



(b)     Reports on Form 8-K



        On June 29, 1998 Consumers Water Company filed a report on 

        Form 8-K with respect to a press release reporting a 

        definitive agreement providing for the merger of Consumers 

        Water Company with and into a newly-formed subsidiary of 

        Philadelphia Suburban Corporation.







                           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.







                    CONSUMERS WATER COMPANY



                         (Registrant)







8/12/98                                    /s/ Peter L. Haynes

___________                                ___________________

Date                                       Peter L. Haynes

                                           Chief Executive Officer







8/12/98                                    /s/ John F. Isacke

___________                                __________________

Date                                       John F. Isacke

                                           Chief Financial Officer







Exhibit Index



          2.1     Agreement for Purchase and Sale of assets dated 

October 24, 1997 by and between Consumers New Hampshire Water 

Company and the Town of Hudson is incorporated by reference to 

Exhibit 2.1 to Consumers Water Company's Quarterly Report on Form 

10-Q for the Quarter ended September 30, 1997.



          2.2     Amended and Restated Agreement and Plan of 

Merger as of August 5, 1998 by and among Philadelphia Suburban 

Corporation, Consumers Acquisition Company and Consumers Water 

Company is filed herewith as Exhibit 2.2.  The Company agrees to 

furnish supplementally a copy of the schedules omitted to the 

Commission upon request.



          27.      Financial Data Schedule is submitted herewith 

as Exhibit 27.