SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C.  20549


                                     FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d) of
                        The Securities Exchange Act of 1934


 For Quarter Ended      June 30, 1999           Commission File No.    1-3429


                           Maine Public Service Company
              (Exact name of registrant as specified in its charter)


                Maine                                  01-0113635
  (State or other jurisdiction of                   (I.R.S. Employer
   incorporation or organization)                  Identification No.)



 209 State Street, Presque Isle, Maine                    04769
 (Address of principal executive offices)               (Zip Code)


 Registrant's telephone number, including area code       207-768-5811



 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    .


               (APPLICABLE ONLY TO CORPORATE ISSUERS:)

     Indicate the number of shares outstanding of each of the issuer's classes
 of common stock, as of the close of the period covered by this report.

                  Common Stock, $7.00 par value - 1,617,250 shares



                                                                 Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 1.   Financial Statements

          See the following exhibits - Maine Public Service Company and
          Subsidiaries Condensed Consolidated Financial Statements,
          including a statement of consolidated operations for the
          quarter and six months ended June 30, 1999, and for the
          corresponding period of the preceding year; a consolidated
          balance sheet as of June 30, 1999, and as of December 31,
          1998, the end of the Company's preceding fiscal year; and a
          statement of consolidated cash flows for the period January 1
          (beginning of the fiscal year) through June 30, 1999, and for
          the corresponding period of the preceding year.

          In the opinion of management, the accompanying unaudited
          condensed consolidated financial statements present fairly the
          financial position of the Companies at June 30, 1999 and
          December 31, 1998, and the results of their operations for the
          three and six months ended June 30, 1999 and their cash
          flows for the six months ended June 30, 1999, and for the
          corresponding period of the preceding year.






























                                 -2-

MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited)
(Dollars in Thousands Except Per Share Amounts)

                                      Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                       1999       1998      1999     1998


Operating Revenues                   $16,423    $13,243    $33,892  $28,840
Operating Expenses
   Purchased Power                     9,304      7,389     18,402   15,114
   Other Operation and Maintenance     3,546      3,235      6,851    7,020
   Depreciation                          630        658      1,231    1,317
   Amortization                          376        401        761      803
   Taxes Other Than Income               403        379        850      814
   Provision for Income Taxes            530        290      1,674    1,023
        Total Operating Expenses      14,789     12,352     29,769   26,091
Operating Income                       1,634        891      4,123    2,749
Other Income (Deductions)
   Equity in Income of Associated
        Companies                         88        127        365      253
   Allowance for Equity Funds Used During
      Construction                        12          8         22       15
   Provision for Income Taxes           (113)       (27)      (147)     (43)
   MY Replacement Power Carrying Charges  66         68        135      124
   Other - Net                            10        (28)       (70)     (12)
Total                                     63        148        305      337
Income Before Interest Charges         1,697      1,039      4,428    3,086
Interest Charges
   Long-Term Debt and Notes Payable      992      1,021      1,971    1,966
   Less Allowance for Borrowed Funds
     Used During Construction             (7)        (4)       (14)      (8)
Total                                    985      1,017      1,957    1,958
Net Income Available for Common Stock    712         22     $2,471   $1,128

Average Shares Outstanding (000's)     1,617      1,617      1,617    1,617
Basic Earnings Per Share of
        Common Stock                   $0.44      $0.01      $1.53    $0.70
Dividends Declared per Common Share    $0.25      $0.25      $0.50    $0.50



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








                                     -3-
MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
                                       June 30, 1999     December 31, 1998
                   ASSETS                (Unaudited)
Utility Plant
   Electric Plant in Service               $71,442         $101,211
   Less Accumulated Depreciation            33,863           51,585
      Net Electric Plant in Service         37,579           49,626
   Construction Work-in-Progress             2,445            1,014
        Total                               40,024           50,640
Investment in Associated Companies
   Maine Yankee Atomic Power Company         3,887            3,979
   Maine Electric Power Company, Inc.          476              241
        Total                                4,363            4,220
        Net Utility Plant and Investments   44,387           54,860
Current Assets
   Cash and Cash Equivalents                29,580            1,454
   Deposits for Interest and Dividends         478              477
   Deposits with Trustee-Asset Sale          7,938                0
   Accounts Receivable - Net                 6,279            5,856
   Unbilled Base Revenue                     1,280            1,892
   Deferred Fuel and Purchased Energy        1,887              687
   Current Deferred Income Taxes                 0               31
   Inventory                                 1,124            1,037
   Prepayments                                 416              521
      Total                                 48,982           11,955
Other Assets
   Restricted Investment                     2,399            2,817
   Uncollected Maine Yankee Decommissioning
        Costs                               33,925           36,037
   Recoverable Seabrook Costs               24,163           24,875
   Regulatory Asset - SFAS 109 & 106        11,092           11,886
   Deferred Fuel and Purchased Energy        9,003            9,618
   Regulatory Asset - Power Purchase
        Agreement Restructuring              8,706            8,706
   Other                                     2,858            3,541
      Total                                 92,146           97,480
Total Assets                              $185,515         $164,295
         CAPITALIZATION AND LIABILITIES
Capitalization
   Common Shareholders' Equity
      Common Stock                         $13,071          $13,071
      Paid-in Capital                           38               38
      Retained Earnings                     29,201           27,539
      Treasury Stock, at cost               (5,714)          (5,714)
         Total                              36,596           34,934
      Long-Term Debt (less current
        maturities)                         45,890           45,915
Current Liabilities
   Long-Term Debt Due Within One Year        1,275            1,275
   Notes Payable                             6,000            8,100
   Accounts Payable                          4,727            4,671
   Current Deferred Income Taxes               552                0
   Dividends Declared                          404              404
   Customer Deposits                            17               24
   Interest and Taxes Accrued               11,565            1,029
      Total                                 24,540           15,503
Deferred Credits
   Uncollected Maine Yankee
        Decommissioning Costs               33,925           36,037
   Deferred Income Tax                      21,191           25,812
   Investment Tax Credits                      306              578
   Deferred Revenues                             0            1,170
   Deferred Gain & Related Accounts-
        Generating Asset Sale               18,112                0
   Miscellaneous                             4,955            4,346
      Total                                 78,489           67,943
Total Capitalization and Liabilities      $185,515         $164,295

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

                                    -4-

MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(Unaudited)
(Dollars in Thousands)
                                                      Six Months Ended
                                                           June 30,
                                                       1999         1998
Cash Flow From Operating Activities
   Net Income                                         $2,471       $1,128

Adjustments to Reconcile Net Income to Net Cash
   Provided (Used) by Operations
   Depreciation                                        1,231        1,317
   Amortization                                          779          822
   Income on Tax Exempt Bonds-Restricted Funds           (11)         (51)
   Deferred Income Taxes - Net                         1,033          542
   AFUDC                                                 (36)         (23)
   Change in Deferred Fuel & Purchased Energy            574       (1,711)
   Change in Deferred Regulatory and Debt Issuance Costs 177          258
   Change in Deferred Regulatory Asset - Power Purchase
        Restructuring                                      0       (8,706)
   Change in Deferred Revenues                        (1,170)         133
   Change in Benefit Obligation                          337          422
   Change in Current Assets and Liabilities           (2,191)       1,911
   Other                                                (417)        (233)
Net Cash Flow Provided (Used) By Operating Activities  2,777       (4,191)

Cash Flow From Financing Activities
   Dividend Payments                                    (809)      (1,213)
   FAME Financing Costs                                   (5)        (529)
   Deposit - FAME Capital Reserve Fund                     0       (2,378)
   Deposit with Trustee - Asset Sale Proceeds         (7,938)           0
   Issuance of Long Term Debt                              0       11,540
   Drawdown of Tax Exempt Bonds Proceeds                 428          593
   Retirements on Long-Term Debt                         (25)      (2,905)
   Short-Term Borrowings (Repayments), Net            (2,100)         400
Net Cash Flow Provided (Used) In Financing Activities(10,449)       5,508

Cash Flow From Investing Activities
   Proceeds from Sale of Generating Assets            37,547            0
   Investment in Electric Plant                       (1,749)      (1,387)
 Net Cash Provided (Used) For Investment Activities   35,798       (1,387)

Increase (Decrease) in Cash and Cash Equivalents      28,126          (70)
Cash and Cash Equivalents at Beginning of Year         1,454        2,071
Cash and Cash Equivalents at End of Period           $29,580       $2,001

Change in Current Assets and Liabilities Providing (Utilizing)
   Cash From Operating Activities
      Accounts Receivable                              ($473)        $720
      Unbilled Revenue                                   612          448
      Deferred Maine Yankee Replacement Power Costs   (1,200)          16
      Inventory                                         (136)         (49)
      Prepayments                                     (1,509)       1,748
      Accounts Payable & Accrued Expenses                522         (963)
      Other Current Liabilities                           (7)          (9)
   Total Change                                      ($2,191)      $1,911

Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Period For:
   Interest                                           $1,999       $1,799
   Income Taxes                                       $2,242      ($1,628)

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























                                 -5-
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The accompanying unaudited consolidated financial statements include the
    accounts of the Company, its wholly-owned Canadian subsidiary, Maine
    and New Brunswick Electrical Power Company, Limited and its unregulated
    marketing subsidiary, Energy Atlantic, LLC (EA).

    The Company is subject to the regulatory authority of the Maine Public
    Utilities Commission (MPUC) and, with respect to wholesale rates, the
    Federal Energy Regulatory Commission (FERC).

    The accompanying unaudited consolidated financial statements should be
    read in conjunction with the 1998 Annual Report, an integral part of
    Form 10-K.  Certain financial statement disclosures have been condensed
    or omitted but are an integral part of the 1998 Form 10-K.  These
    statements reflect all adjustments that are, in the opinion of
    management, necessary to a fair statement of results for interim periods
    presented.  All such adjustments are of a normal recurring nature.  The
    Company's significant accounting policies are described in the Notes to
    Consolidated Financial Statements of the Company's Annual Report filed
    with the Form 10-K.  For interim reporting purposes, these same
    accounting policies are followed.

    For purposes of the statements of consolidated cash flows,the Company
    considers all highly liquid securities with a maturity, when purchased,
    of three months or less to be cash equivalents.

    Certain reclassification have been made to the 1998 financial
    statement amounts in order to conform to the 1999 presentation.

2.  ENERGY ATLANTIC

    In January, 1999, Energy Atlantic, the Company's wholly-owned
    unregulated marketing subsidiary, formally began operations.  This
    marketing segment is currently involved in wholesale energy transactions
    and intends to enter the retail market in March 1, 2000, the
    commencement of retail competition in the State of Maine.

    During the quarter ended March 31, 1999, the Company adopted Statement
    of Financial Accounting Standards (FAS) No. 131, "Disclosure about
    Segments of an Enterprise and Related Information", which became
    applicable as a result of the start-up of Energy Atlantic.  Segment
    reporting has been presented below for the current period only since
    historically there had not been separate reportable segments.  The
    accounting policies of the segments are the same as those described in
    Note 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES".  The Company
    provides certain administrative support services to Energy Atlantic,
    which are billed to that entity at cost based on a combination of direct
    charges and allocations.  The Company is organized on the basis of
    products and services.  The Company's reportable segments include the
    electric utility portion of the business, consisting of Maine Public
                                    -6-

    Service Company and Maine and New Brunswick Electrical Power Company,
    Limited (MPS), and the energy marketing portion of the business,
    consisting of Energy Atlantic (EA).

                   Three Months Ended 6/30/99     Six Months Ended 6/30/99
                                    (Dollars in Thousands)
                                       Total                       Total
                       EA      MPS    Company        EA     MPS   Company

Operating Revenues  $ 2,863  $ 13,560 $ 16,423    $ 4,324 $29,568 $33,892
Operations & Maintenance
Expense               2,792    11,467   14,259      4,339  23,756  28,095
Taxes                    27       503      530         (7)  1,681   1,674
Total Operating
   Expenses           2,819    11,970   14,789      4,332  25,437  29,769
Operating Income (Loss)  44     1,590    1,634         (8)  4,131   4,123
Other Income &
   Deductions             2        61       63          2     303     305
Income (Loss) Before
Interest Charges         46     1,651    1,697         (6)  4,434   4,428
Interest Charges          4       981      985          6   1,951   1,957
Net Income (Loss)   $    42  $    670 $    712    $   (12)$ 2,483 $ 2,471
Total Assets as of
June 30, 1999       $   872  $184,643 $185,515


3.  IMPLEMENTATION OF MULTI-YEAR RATE PLAN

    A four-year rate plan, approved by the MPUC on November 13, 1995,
    provided retail rate increases of 4.4% on January 1, 1996, 2.9% on
    February  1, 1997, and 3.9% on February 1, 1998.  On April 6, 1999,
    the MPUC approved a Stipulation between the Office of the Public
    Advocate (OPA) and the Company.  Under this stipulation and with
    the April 5, 1999 MPUC approval of the sale of the Company's generating
    assets, customer rates did not increase on April 1, 1999.

    Principal provisions of the Stipulation are as follows:
        a)  The Company is entitled to a 3.66% specified rate increase as
            of April 1, 1999.  Rather than increasing customer rates, the
            Company will recognize the revenues related to this rate
            increase, and recognize a corresponding deferred asset,
            approximately $410,000 through June 30, 1999.  The parties to
            the Stipulation agreed to recommend that the deferred gain from
            the asset sale be reduced in an amount corresponding to the
            specified rate increase which will be addressed by the MPUC's
            determination of allowed stranded cost recovery.
        b)  The Company agreed to begin amortizing on April 1, 1999, an
            additional $150,000 per month of Maine Yankee replacement power
            costs or a total of $1,650,000 for the remaining eleven months
            of the rate plan.

    With higher winter rates for our commercial and industrial customers

                                    -7-

    and the elimination of the fuel clause, revenues will be higher
    during the winter months than during the summer months when rates
    charged to those customers are approximately 25% lower.

4.  INCOME TAXES

    A summary of Federal and State income taxes charged to income is
    presented below.  For accounting and ratemaking purposes, income tax
    provisions included in "Operating Expenses"  reflect taxes applicable to
    revenues and expenses allowable for ratemaking purposes.  The tax effect
    of items not included in rate base is allocated as "Other Income
    (Deductions)".
                                        (Dollars In Thousands)
                              Three Months Ended      Six Months Ended
                                  June 30,              June 30,
                                1999    1998           1999     1998
    Current income taxes     $  4,153     $   231    $ 4,746  $   524
    Deferred income tax        (3,495)        103     (2,894)     577
    Investment credits            (15)        (17)       (31)     (35)
    Total income taxes       $    643     $   317    $ 1,821  $ 1,066

    Allocated to:
    Operating Income         $    530     $   290    $ 1,674  $ 1,023
    Other income                  113          27        147       43
      Total                  $    643     $   317    $ 1,821  $ 1,066

    For the six months ended June 30, 1999 and 1998, the effective income tax
    rates were 42.4% and 48.6%, respectively.  The principal reason for the
    effective tax rates differing from the US federal income tax rate are the
    contribution to net income of the Company's Canadian subsidiary, flow
    through items required by regulation and state income taxes.  Current
    income taxes recorded on the Company's deferred gain from the generating
    asset sale are offset by corresponding deferred income taxes.  Income taxes
    have not been provided on the subsidiary's portion of the generating asset
    sale.  The subsidiary's taxes will be recognized when the subsidiary is
    liquidated and the deferred gain is recognized as income.

    The following summarizes accumulated deferred income taxes established on
    temporary differences under SFAS 109 as of June 30, 1999 and December 31,
    1998.
                                              (Dollars in Thousands)
                                               June 30,   December 31,
                                                  1999          1998
    Seabrook                                   $13,587       $13,706
    Property                                     6,246         8,532
    Regulatory expenses                          3,568         2,002
    Deferred fuel                                  691         2,056
    Pension and postretirement benefits           (935)         (952)
    Generating asset sale                       (2,748)          -
    W-S up-front payment                         1,456           -
    Other                                         (195)          468
    Net accumulated deferred income taxes      $21,670       $25,812

                                    -8-
5.  MAINE YANKEE

    The Company owns 5% of the Common Stock of Maine Yankee, which
    operated an 860 MW nuclear power plant (the "Plant") in Wiscasset,
    Maine.  On August 6, 1997, the Board of Directors of Maine Yankee
    voted to permanently cease power operations and to begin
    decommissioning the Plant.  The Plant experienced a number of
    operational and regulatory problems and did not operate after
    December 6, 1996. The decision to close the Plant permanently was
    based on an economic analysis of the costs, risks and uncertainties
    associated with operating the Plant compared to those associated
    with closing and decommissioning it. The Plant's operating license
    from the Nuclear Regulatory Commission (NRC) was due to expire on
    October 21, 2008.

    The Maine Public Utilities Commission (MPUC) stayed an investigation
    of the prudency of the shutdown decision and the operation of Maine
    Yankee prior to the shutdown decision, pending the outcome of Maine
    Yankee's rate case before the Federal Energy Regulatory Commission (FERC).

    Since the filing of the FERC rate request, Maine Yankee and the
    active intervenors, including among others the MPUC Staff, the Maine
    Office of the Public Advocate (OPA), the Company and other owners, the
    Secondary Purchasers, and a Maine environmental group (the "Settling
    Parties"), engaged in extensive discovery and negotiations which
    resulted in a settlement agreement filed by those parties with the FERC
    on January 19, 1999.  A separate negotiated settlement filed with the
    FERC on February 5, 1999, resolved the issues raised by the Secondary
    Purchasers by limiting the amounts they will pay for decommissioning the
    Plant and by settling other points of contention affecting individual
    Secondary Purchasers.  Both settlements were found to be in the public
    interest and approved by the FERC on June 1, 1999. The settlement
    constitutes a full settlement of all issues raised in the consolidated
    FERC proceeding including decommissioning-cost issues and issues
    pertaining to the prudence of the management, operation, and decision to
    permanently cease operation of the Plant.

    The primary settlement provides for Maine Yankee to collect $33.1
    million in the aggregate annually, effective August 1, 1999, including
    both decommissioning costs and ISFSI-related costs.  The original filing
    with FERC on November 6, 1997, called for an aggregate annual collection
    rate of $36.4 million for decommissioning and the ISFSI, based on a 1997
    estimate.  Under the approved settlement the amount collected annually
    is to be reduced to approximately $24.4 million as a result of
    legislation allowing Maine Yankee to (1) use for construction the ISFSI
    funds held in trust under Maine law for spent-fuel disposal, and (2)
    access approximately $6.8 million held by the State of Maine for
    eventual payment to the State of Texas pursuant to a compact for low-
    level nuclear waste disposal, the future of which is now in question
    after rejection of the selected disposal site in west Texas by a Texas
    regulatory agency. Both required authorizing legislation in Maine,
    which was adopted on May 13, 1999.

                                    -9-

    The settlement also provides for recovery of all unamortized investment
    (including fuel) in the Plant, together with a return on equity of 6.50
    percent, effective January 15, 1998, on equity balances up to maximum
    allowed equity amounts, which resulted in a pro-rata refund of $9.3
    million (including tax impacts) to the sponsors on July 15, 1999.  The
    Settling Parties also agreed in the settlement not to  contest the
    effectiveness of the Amendatory Agreements submitted to FERC as part of
    the original filing, subject to certain limitations including the right
    to challenge any accelerated recovery of unamortized investment under
    the terms of the Amendatory Agreements after a required informational
    filing with the FERC by Maine Yankee.  In addition, the settlement
    contains incentives for Maine Yankee to achieve further savings in its
    decommissioning and ISFI-related costs and resolves issues concerning
    restoration and future use of the Plant site and environmental matters
    of concern to certain of the intervenors in the proceeding.

    As a separate part of the settlement, the Company, Central Maine Power
    Company, and Bangor Hydro-Electric Company (the other two Maine owners
    of Maine Yankee), the MPUC Staff, and the OPA entered into a further
    agreement resolving retail rate issues and other issues specific to the
    Maine parties, including those that had been raised concerning the
    prudence of the operation and shutdown of the Plant (the "Maine
    Agreement").  Under the Maine Agreement, the Company would continue to
    recover its Maine Yankee costs in accordance with its most recent Rate
    Stabilization Plan ("RSP") order from the MPUC without any adjustment
    reflecting the outcome of the FERC proceeding.  To the extent that the
    Company has collected from its retail customers a return on equity in
    excess of the 6.50 percent contemplated by the settlement, no refunds
    would be required, but such excess amounts would be credited to the
    customers to the extent required by the RSP.

    Finally, a major provision of the Maine Agreement requires the Maine
    owners, for the period from March 1, 2000 through December 1, 2004, to
    hold their Maine  retail ratepayers harmless from the amounts by which
    the replacement power costs for Maine Yankee exceed the replacement
    power costs assumed in the report to the Maine Yankee Board of Directors
    that served as a basis for the Plant shutdown decision, up to a maximum
    cumulative amount of $41 million.  The Company's share of that maximum
    amount would be $4.1 million for the period.  The Maine Agreement, which
    was approved by the MPUC on December 22, 1998, also sets forth the
    methodology for calculating such replacement power costs.

    With the closing of Maine Yankee, a provision of the Company's rate plan
    allowing the deferral of 50% of the Maine Yankee replacement power costs
    went into effect on June 6, 1997.  Beginning in May, 1998, Maine Yankee
    replacement power costs have been offset by net savings from the restruct-
    ured Purchase Power Agreement with Wheelabrator-Sherman, in accordance with
    the rate plan stipulation.  Beginning in April, 1999 the Company began
    amortizing an additional $150,000 per month as part of the stipulation
    described in Note 3, "IMPLEMENTATION OF MULTI-YEAR RATE PLAN", of this Form
    10-Q.  This treatment resulted in a $406,000 net decrease of the deferral
    during the second quarter of 1999.  As of June 30, 1999, the Company has a
    deferred Maine Yankee replacement power cost balance of approximately $3.4
    million, subject to recovery in accordance with the rate plan.

                                   -10-
    On September 1, 1997, Maine Yankee estimated the sum of the future
    payments for the closing, decommissioning and recovery of the remaining
    investment in Maine Yankee to be approximately $930 million, of which
    the Company's 5% share would be approximately $46.5 million.  In
    December, 1998 and again in June, 1999, Maine Yankee updated its
    estimate of decommissioning costs based on the Settlement, as discussed
    above.  Legislation enacted in Maine in 1997 calls for restructuring the
    electric utility industry and provides for recovery of decommissioning
    costs, to the extent allowed by federal regulation, through the rates
    charged by the transmission and distribution companies.  Based on the
    Maine legislation and regulatory precedent established by the FERC in
    its opinion relating to the decommissioning of the Yankee Atomic nuclear
    plant, the Company believes that it is entitled to recover substantially
    all of its share of such costs from its customers and, as of June 30,
    1999, is carrying on its consolidated balance sheet a regulatory asset
    and a corresponding liability in the amount of $33.9 million, which is
    the September, 1997 cost estimate of $46.5 million discussed above
    reduced by the Company's post-September 1, 1997 cost-of-service payments
    to Maine Yankee and reflects the cost adjustments agreed to in the
    Settlement.

6.  RESTRUCTURING OF MAINE'S ELECTRIC UTILITY INDUSTRY

    On May 29, 1997, legislation titled "An Act to Restructure the
    State's Electric Industry" was signed into law by the Governor of Maine.
    The principal provisions with accounting impact on the Company are as
    follows:

        1)  Beginning on March 1, 2000, all consumers of electricity
            have the right to purchase generation services directly from
            competitive electricity suppliers who will not be subject to
            rate regulation.

        2)  By March 1, 2000, the Company, Central Maine Power Company
            (CMP) and Bangor Hydro-Electric Company (BHE) must divest of
            all generation related assets and business functions except
            for:
                  a)    contracts with qualifying facilities, such as the
                        Company's power contract with Wheelabrator-Sherman
                        (W-S) and conservation providers;

                  b)    nuclear assets, namely, the Company's investment in
                        the Maine Yankee Atomic Power Company;

                  c)    facilities located outside the United States, i.e.,
                        the Company's hydro facility in New Brunswick,
                        Canada; and
                  d)    assets that the MPUC determines necessary for the
                        operation of the transmission and distribution
                        services.


                                   -11-

            The MPUC can grant an extension of the divestiture deadline if
            the extension will improve the selling price.  For assets not
            divested, the utilities are required to sell the rights to the
            energy and capacity from these assets.  The Company shall submit
            to the MPUC its divestiture plan no later than January 1, 1999.

        3)  The Company, through a regulated affiliate, will continue to
            provide transmission and distribution services which will be
            subject to continued rate regulation by the MPUC.

        4)  Maine electric utilities will be permitted a reasonable
            opportunity to recover legitimate, verifiable and unmitigable
            costs that are otherwise unrecoverable as a result of retail
            competition in the electric utility industry (so-called
            "Stranded Costs").

            The MPUC shall determine these stranded costs by
                considering:

               a) the utility's regulatory assets related to generation,
                  i.e., the Company's unrecovered Seabrook investment;

               b) the difference between net plant investment in generation
                  assets compared to the market value for those assets; and

               c) the difference between future contract payments and the
                  market value of the purchased power contracts, i.e., the
                  W-S contract.

            By the end of 1999, the MPUC will have estimated the stranded
            costs for the Company and the manner for the collection of
            these costs by the transmission and distribution company.
            Customers reducing or eliminating their consumption of
            electricity by switching to self-generation, conversion to
            alternative fuels or utilizing demand-side management measures
            cannot be assessed exit or entry fees.

        5)  The MPUC shall include in the rates charged by the transmission
            and distribution utility decommissioning expenses for Maine
            Yankee.  In 2003 and every three years thereafter until the
            stranded costs are recovered, the MPUC shall review and adjust
            the stranded cost recovery amounts and related transition
            charges.  However, the MPUC may adjust the amounts at any point
            in time that they deem appropriate.  Since the legislation provides
            for our recovery of stranded costs by the transmission and
            distribution company, the Company will continue to recognize
            existing regulatory assets and plant costs as provided by Emerging
            Issues Task Force 97-4 "Deregulation of the Pricing of Electricity".

        6)  Employees, other than officers, displaced as a result of retail
            competition will be entitled to certain severance benefits and
            retraining programs.  These costs will be recovered through charges
            collected by the regulated transmission and distribution company.
                                   -12-
    The MPUC will conduct several rulemaking proceedings associated with the
    new restructuring law.  The Company is presently reviewing its business
    operations and the opportunities that the new restructuring law presents.

    In accordance with EITF 97-4, when the details of the restructuring plan
    are determined by the MPUC rulemaking, the Company will discontinue
    application of the Statement of Financial Accounting Standards No. 71
    (SFAS 71), "Accounting for the Effects of Certain Types of Regulations",
    for the retail generation segment of its business.  As a result, the
    Company continues to defer certain costs as regulatory assets in instances
    where recovery through future regulatory cash flows is anticipated.

    In an August 11, 1999 filing with the MPUC, the Company amended its
    February 9, 1999 determination of stranded costs, transmission and
    distribution costs and rate design with the MPUC.  After application of
    available value from the generating asset sale, the Company estimates
    stranded costs of $76.5 million.  The major components include the
    remaining investment in Seabrook, the above market costs of the amended
    power purchase agreement and recovery of fuel expense deferrals related to
    Wheelabrator-Sherman, the obligation for remaining operating expenses and
    recovery of the Company's remaining investment in Maine Yankee, and the
    recovery of several other regulatory assets.

7.  GENERATING ASSET DIVESTITURE

    On July 7, 1998, the Company and WPS Power Development, Inc. (WPS-PDI)
    signed a purchase and sale agreement for the Company's electric generating
    assets.  WPS-PDI agreed to purchase 91.8 megawatts of generating capacity
    for $37.4 million, which is 3.2 times higher than the net book value of the
    assets.  This sale of assets is required by the State's electric industry
    restructuring law and required the approvals of the MPUC and the FERC.

    On June 8, 1999, after receiving all of the major regulatory approvals, the
    Company completed the sale to WPS-PDI for $37.4 million.  The Company's 5%
    ownership in Maine Yankee was not part of the sale, since the plant is
    being decommissioned.  After paying $13.8 million (U.S.) in Canadian,
    Federal and State income taxes, the remaining proceeds will be used to
    reduce the Company's debt.  The gain from the sale is currently deferred,
    pending the Maine Public Utilities Commission's (MPUC) decision on the
    Company's determination of stranded costs, transmission and distribution
    costs and rate design.  The components of the deferred gain, prior to
    liquidation of the Company's subsidiary, are as follows:

                         (Dollars in Millions)
               Gross proceeds                   $37.5
               Settlement adjustments             (.1)
               Net proceeds                      37.4
               Net book value                   (11.0)
               Taxes                            (10.0)
               Transition costs, net             (2.2)
               Deferred gain, net of tax        $14.2


                                   -13-


    Upon formal liquidation of the subsidiary, approximately $14.1 million
    of the proceeds will be transferred to the first mortgage trustee for
    paydown of long-term debt.

    As part of the generating asset sale on June 8, 1999, the Company has
    entered into two indemnity obligations with the purchaser, WPS-PDI.
    First, the Company will be liable, with certain limitations, for
    certain Aroostook River flowage damage.  This liability will continue
    for ten years after the sale and shall not exceed $2,000,000 in the
    aggregate.  Second, the Company has warranteed the condition of the sites
    sold to WPS-PDI, with an aggregate limit of $3,000,000 for two years after
    the date of sale, and five years after the sale for environmental claims.
    The Company is unaware of any pending claims under either of these
    indemnity obligations.

8. OPEN ACCESS TRANSMISSION TARIFF

    On March 31, 1995, the Company filed an open access transmission
    tariff with the Federal Energy Regulatory Commission (FERC).  This
    tariff provides fees for various types and levels of transmission and
    transmission-related services that are required by transmission
    customers.  The tariff, as filed, substantially increases some of the
    fees for transmission services and provides separate fees for various
    transmission-related services.  On May 31, 1995, the FERC approved the
    filed tariff, subject to refund.  The filing has been vigorously
    contested by the Company's wholesale customers.  On May 31, 1996, the
    FERC issued Order 888, a final rule on open transmission access and
    stranded cost recovery.  As a result the Company has refiled its tariff
    to comply with the Order.

    On December 22, 1998, the FERC issued its order in this proceeding.
    Although many of the major issues were not decided in the Company's favor,
    the order did not have an adverse impact on the Company's financial
    condition.  Based on the FERC order, the Company refunded approximately
    $1.2 million to the customers on May 20, 1999, which had already been
    reflected as a liability.

 9. ACCOUNTING PRONOUNCEMENTS

    In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
    Instruments and Hedging Activities". It requires companies to record
    derivatives on their balance sheet at their fair value depending on the
    intended use of the derivative.  The new standard applies to all entities
    and the original effective date was June 15, 1999.  On May 19,1999, the
    FASB determined that the implementation of the statement should be delayed
    for one year.  Based on current business activities, the Company does not
    expect this pronouncement to have a material impact to the Company's
    financial reporting.




                                   -14-

                                                              Form 10-Q

                      PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        Forward-Looking Statements

        The discussion below may contain "forward-looking statements", as
        defined in the Private Securities Litigation Reform Act of 1995,
        related to expected future performance or our plans and objectives.
        Actual results could potentially differ materially from these
        statements.  Therefore, there can be no assurance that actual results
        will not materially differ from expectations.

        Factors that could cause actual results to differ materially from our
        projections include, among other matters, electric utility
        restructuring; future economic conditions; changes in tax rates,
        interest rates or rates of inflation; developments in our legislative,
        regulatory, and competitive environment; and the decommissioning cost
        of Maine Yankee.

                           Results of Operations

        Earnings per share and the net income available for common stock for
        the three months ended June 30, 1999 along with the corresponding
        information for the previous year are as follows:


                                             Three Months Ended
                                                  June 30,

                                               1999       1998
                Earnings per share            $ .44     $  .01

                Net income in thousands       $ 712     $   22

        For the second quarter of 1999 compared to the same quarter last
        year, the increase in consolidated earnings per share (EPS) of $.43 is
        attributable to the following:













                                  -15-

                                                                 Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.  Management's Analysis of Quarterly Income Statements

         Results of Operations (Continued)

                      Change in EPS - Second Quarter of 1999
                        Compared to Second Quarter of 1998

                                                               EPS
                                                            Increase

         Increase in retail revenues due to rate
              stipulations and a 1.8% sales increase          .26

         Other fuel expense                                   .08

         Decreased wheeling expenses due to termination
               of contract                                    .04

         Net decrease in operating expenses resulting
               from the closure of Maine Yankee               .03

         Other                                                .02

                Total                                      $  .43

         Retail revenues increased due to rate stipulations and a 1.8%
         increase in retail sales, resulting in a $.26 increase in earnings
         per share.  The decrease in other fuel expenses reflects a decrease
         in purchases from the independent power producer, Wheelabrator-
         Sherman (W/S), favorable prices, offset by lower than normal hydro
         resulting in an increased in earnings of $.08 per share.  Under
         contract, the Company's purchases from W/S are limited to a specific
         amount over a twelve-month period.  Once this limit is obtained, the
         Company does not purchase any additional output from the facility.
         Therefore, timing of W/S production can affect earnings comparisons
         from quarter to quarter.  A decrease in wheeling expenses due to the
         termination of the transmission agreement increased earnings by $.04
         per share.  The reduction of Maine Yankee operating and replacement
         power expenses resulted in a net increase in earnings of $.03 per
         share.










                                   -16-

                                                                 Form 10-Q
                      PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        Results of Operations (Continued)

        Consolidated operating revenues for the quarters ended
        June 30, 1999 and 1998, are as follows:

                                        1999                 1998
(Dollars in Thousands)               $         MWH         $        MWH

Retail                            11,893   121,376      11,589    119,180
Sales for Resale                     394    10,902         436     11,941
Total Primary Sales               12,287   132,278      12,025    131,121
Secondary Sales                    3,600   134,656         965     32,859
Other Revenues/Rev. Adjust.          536      -            253        -
Total Operating Revenues          16,423   266,934      13,243    163,980

        Primary sales in the second quarter of 1999 were 132,278 MWH, an
        increase of 1,157 MWH (.9%) from sales in the second quarter of 1998.
        Secondary sales increased by 101,797 MWH, reflecting the return of
        Houlton Water Company in February, 1999 as a customer of the Company's
        wholly-owned unregulated marketing subsidiary, Energy Atlantic (EA).

        Retail sales to customers for the second quarter of 1999 were
        $11,893,000 compared to $11,589,000 for the same period of 1998,
        reflecting the 1.8% increase in retail sales noted above.  The
        $2,635,000 increase in secondary sales to $3,600,000 for the second
        quarter of 1999 is a result of the increase in sales noted above.






















                                   -17-

                                                                 Form 10-Q
                      PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        Results of Operations (Continued)

        For the quarters ended June 30, 1999 and 1998, total operating
        expenses were $14,789,000 and $12,352,000, respectively.  The
        changes in operating expenses and energy sources are as follows:


                                                       Increase/(Decrease)
                  (Dollars in Thousands)                  $         MWH
                  Purchased Power Expenses
                  Maine Yankee                           (516)        -

                  Wheelabrator-Sherman                   (487)    (4,799)
                  NB Power                              1,004     35,295
                  Northeast Empire                         37      1,079
                  Other Purchases                       1,443     74,260
                  Deferred Fuel - amortization            434        -
                                                        1,915    105,835
                  Generating Expenses                      49      1,989
                  Other Operation & Maint. Expenses       262
                  Depreciation                            (28)
                  Amortization                            (25)
                  Income Taxes                            241
                  Taxes Other than Income                  23
                                          Total         2,437    107,824

        Purchases from NB Power increased 35,295 MWH and other purchases
        increased by 74,260 MWH because of the increase in power marketing
        activities classified as secondary sales.  Purchases from Northeast
        Empire increased by 1,079 MWH.  Since February, 1998 and continuing
        until March 1, 2000, Northeast Empire has provided Maine Yankee
        replacement power.  The total increase of 107,824 MWH reflects the
        additional retail and secondary sales.  The Company's share of Maine
        Yankee capacity expenses decreased by $516,000 as previously discussed.
        Wheelabrator-Sherman purchased power expenses decreased by $487,000,
        due to the reduced price under the amended Power Purchase Agreement
        (PPA).  Deferred fuel expense increased $434,000 as a result of the
        additional $150,000 per month amortization of Maine Yankee replacement
        power beginning in April, 1999, as discussed further in Note 5 of the
        Notes to Consolidated Financial Statements, "Maine Yankee".

        Hydro production was 71.6% and 80.5% of normal in the second quarters
        of 1999 and 1998, respectively, reflecting a decrease of 5,494 MWH.
        Generating expenses increased by $49,000 because of increased operation
        at Wyman No. 4.  Other operation and maintenance expenses increased by
        $262,000 because of increased medical and regulatory expenses.


                                   -18-

                                                                 Form 10-Q
                      PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        Results of Operations (Continued)

                                 Asset Sale
        On June 8, 1999, after receiving all of the major regulatory approvals,
        the Company completed the sale of the generating assets to WPS-PDI for
        $37.4 million.  The Company's 5% ownership in Maine Yankee was not part
        of the sale, since the plant is being decommissioned.  After paying
        $13.8 million (U.S.) in Canadian, Federal and State income taxes, the
        remaining proceeds will be used to reduce the Company's debt.  The gain
        from the sale is currently deferred, pending the MPUC's decision on the
        Company's determination of stranded costs, transmission and
        distribution costs and rate design.  The components of the deferred
        gain, prior to liquidation of the Company's subsidiary, are as follows:

                                (Dollars in Millions)
                    Gross proceeds              $  37.5
                    Settlement adjustments          (.1)
                    Net proceeds                   37.4
                    Net book value                (11.0)
                    Taxes                         (10.0)
                    Transition costs, net          (2.2)
                    Deferred gain, net of tax    $ 14.2

        Upon formal liquidation of the subsidiary, approximately $14.1
        million of the proceeds will be transferred to the first mortgage
        trustee for paydown of long-term debt.

        As part of the generating asset sale on June 8, 1999, the Company has
        entered into two indemnity obligations with the purchaser, WPS-PDI.
        First, the Company will be liable, with certain limitations, for
        certain Aroostook River flowage damage.  This liability will
        continue for ten years after the sale and shall not exceed $2,000,000
        in the aggregate.  Second, the Company has warranteed the condition of
        the sites sold to WPS-PDI, with an aggregate limit of $3,000,000 for
        two years after the date of sale, and five years after the sale for
        environmental claims.  The Company is unaware of any pending claims
        under either of these indemnity obligations.

                                 Liquidity
        Net cash flows from operating activities were $2,776,000 for the first
        six months of 1999.  The Company received $37,547,000, adjusted for
        closing items, from the sale of its generating assets, with $7,938,000
        required to be deposited with the first mortgage trustee.  The Company
        drew down $428,000 from the trustee of the tax-exempt revenue bond
        proceeds based on qualifying property.  For the period, the Company
        invested $1,748,000 in electric plant, paid $809,000 in dividends and
        used $25,000 to reduce long-term debt.  Short-term borrowings decreased
        by $2,100,000 because of the cash flows from operations.
                                    -19-

                                                                 Form 10-Q
                      PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        Net cash flows from operating activities were negative $4,191,000
        for the first six months of 1998, reflecting the $8,706,000 up-front
        payment to W-S for the amended PPA.  The Company received
        $11,540,000 from the issuance of FAME's Taxable Electric Rate
        Stabilization Revenue Notes.  The proceeds were used for the W-S
        payment discussed above, a $2,378,000 deposit to a Capital Reserve
        Fund and bond issuance costs of $529,000.  For 1998, the receipt of
        $2,052,000 of tax refunds associated with the 1997 net operating
        loss carryback improved operating cash flows.  The Company drew down
        $593,000 of tax-exempt revenue bond proceeds from the trustee.  For
        the period, $1,387,000 was invested in electric plant, $1,213,000
        was paid in dividends and $2,905,000 was used to reduce long-term
        debt including the May 1, 1998 final sinking fund payment of
        $2,880,000 on the 7-1/8% First Mortgage and Collateral Trust Bonds.
        Short-term borrowings increased by $400,000 for the additional Maine
        Yankee replacement power costs.

        Year 2000 Issues

        The Year 2000 issue is the result of computer programs being written
        using two digits rather than four to define the applicable year.
        Computer programs that have date-sensitive software using two digits
        would recognize a date using "00" as the year 1900 rather than the year
        2000, resulting in system failure or miscalculations.  The Company
        conducted an assessment of its computer systems, including embedded
        chip technology, to determine the potential technical and economic
        impact which the Year 2000 issues might have on the Company, its
        systems and its business operations.  The Company is currently
        rewriting the computer application systems responsible for billing to
        meet the electric industry restructuring requirements and is
        incorporating changes that achieve Year 2000 compliance.  If these new
        systems are not functional by December 31, 1999, the current systems
        will continue to be used with a minor alteration to achieve Year 2000
        compliance.  The Company also reviewed its other mission critical
        systems in order to identify Year 2000 remediation or renovation
        measures needed for those systems.  No material modifications are
        necessary to mission critical systems to attain Year 2000 compliance.
        The compliance plans and implementation and testing milestones are
        based on the Company's best estimates, which were derived from numerous
        assumptions of future events, including the continued availability of
        certain resources, third party modification plans and other known
        factors.  In addition to the review of internal systems, the Company is
        requesting assurances of Year 2000 compliance from third parties upon
        whom the Company relies.  The responses are being reviewed and concerns
        of noncompliance are being addressed.  As of June 30, 1999, the Company
        has incurred approximately $32,000 of internal labor for review and
        testing which has not revealed material system modifications necessary
        to obtain Year 2000 compliance for mission critical systems, other
                                     -20-
                                                                Form 10-Q
                       PART 1.  FINANCIAL INFORMATION

Item 2. Management's Analysis of Quarterly Income Statements

        than the changes necessary for electric industry restructuring
        discussed above.  However, $50,000 has been budgeted in 1999 for
        external expenditures for unforeseen modifications to achieve Year
        2000 compliance for mission critical technology.  The assessment
        phase of the Year 2000 compliance project is essentially complete
        and the Company is identifying risks and most reasonable likely
        worse case scenarios specific to the Year 2000 non-compliance by
        the Company and third-party sources.  For example, for every day of
        a Company-wide shutdown, the Company would lose approximately $187,000
        in revenues.  The Company has developed contingency plans for these
        risks for the mission critical systems, which anticipate that the most
        reasonable likely worst case scenario would be a system-wide outage for
        approximately six hours.  The Company has worked with generating
        companies and neighboring electric utilities to establish procedures
        for providing sufficient capacity and an orderly return to a fully
        energized system.  Although all reasonable and available efforts will
        be made, the Company cannot predict the ultimate achievement of Year
        2000 compliance due to its reliance on systems and third-parties
        outside the Company's control.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

(a)     The Company has interest rate risk with two variable rate debt
        issues of the regulated business for purposes other than trading.
        These issues are discussed in detail in the Company's 1998 Annual
        Report, which is Exhibit 13 of the Company's 1998 Form 10-K, which
        information is incorporated herein by reference.  The discussion
        occurs in Note 8, "Long-Term Debt", of the Notes to Consolidated
        Financial Statements.

(b)     The Company's unregulated marketing subsidiary, Energy Atlantic, LLC
        (EA) is engaged in wholesale energy transactions for purposes other
        than trading.  This activity exposes EA to a number of risks such as
        deliverability, market liquidity and credit risk.  EA seeks to
        assure that risks are identified, evaluated and actively managed.













                                   -21-
                                                                Form 10-Q
                       PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

(a)       Restructuring of Maine's Electric Utility Industry

          In the Company's Form 10-K's for December 31, 1996, 1997 and
          1998 the Company described electric utility restructuring
          efforts in Maine, including the Maine Public Utilities
          Commission's (MPUC) recommendation to the legislature.  After
          months of hearings and deliberations, the Maine legislature
          passed L.D. 1804, "An Act to Restructure the State's Electric
          Industry", which the Governor signed into law on May 29, 1997.

          The principal provisions of the new law are as follows:

          1)   Beginning on March 1, 2000, all consumers of electricity
          have the right to purchase generation services directly from
          competitive electricity suppliers who will not be subject to
          rate regulation.

          2)   By March 1, 2000, the Company, Central Maine Power
          Company (CMP) and Bangor Hydro-Electric Company (BHE) must
          divest of all generation related assets and business functions
          except for:

             (a)   contracts with qualifying facilities, such as
             the Company's power contract with Wheelabrator-Sherman (W-S), and
             conservation providers;

             (b)   nuclear assets, namely, the Company's investment in
             the Maine Yankee Atomic Power Company, however, the MPUC
             may require divestiture on or after January 1, 2009;

             (c)   facilities located outside the United States, i.e.,
             the Company's hydro facility in New Brunswick, Canada; and

             (d)   assets that the MPUC determines necessary for
             the operation of the transmission and distribution services.

          The MPUC can grant an extension of the divestiture deadline if
          the extension will improve the selling price.  For assets not
          divested, the utilities are required to sell the rights to the
          energy and capacity from these assets.  See item (b) below
          regarding the divestiture of the Company's generating assets.

          3)   Billing and metering services will be subject to
          competition beginning March 1, 2002, but permits the MPUC to
          establish an earlier date, no sooner than March 1, 2000.



                                   -22-

                                                                  Form 10-Q
                         PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          4) The Company, through an unregulated affiliate, may market
          and sell electricity both within and outside its current
          service territory, without limitation.  Both CMP and BHE are
          limited to 33% of the load within their respective service
          territories, but may sell an unlimited amount outside their
          service territories.  Consumer-owned utilities are allowed to
          market and sell within their service territories, but the MPUC
          can limit or prohibit competition in their service territory,
          if the tax-exempt status of the consumer-owned utility is
          threatened.

          5)   The Company will continue to provide transmission and
          distribution services which will be subject to continued
          regulation by the MPUC.

          6)   Maine electric utilities will be permitted a reasonable
          opportunity to recover legitimate, verifiable and unmitigable
          costs that are otherwise unrecoverable as a result of retail
          competition in the electric utility industry.  The MPUC shall
          determine these stranded costs by considering:

            a)    the utility's regulatory assets related to generation,
            i.e., the Company's unrecovered Seabrook investment;

            b)    the difference between net plant investment in generation
            assets compared to the market value for those assets; and

            c)    the difference between future contract payments and the
            market value of the purchased power contracts, i.e., the W-S
            contract.

          By the end of 1999, the MPUC will have estimated the stranded
          costs for the Company and the manner for the collection of
          these costs by the transmission and distribution company.
          Customers reducing or eliminating their consumption of
          electricity by switching to self-generation, conversion to
          alternative fuels or utilizing demand-side management measures
          cannot be assessed exit or entry fees.  In an August, 1999
          MPUC filing, as detailed further in item (d), below, the Company
          estimated its stranded costs to be approximately $76.5 million,
          net of available value from the sale of the generating assets
          when deregulation occurs on March 1, 2000.

          The MPUC shall include in the rates to be charged by the
          transmission and distribution utility decommissioning
          expenses for Maine Yankee.  In 2003 and every three years
          thereafter until the stranded costs are recovered, the MPUC
          shall review and revaluate the stranded cost recovery.
                                  -23-

                                                            Form 10-Q
                         PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          7)  All competitive providers of retail electricity must be licensed
          and registered with the MPUC and meet certain financial standards,
          comply with customer notification requirements, adhere to customer
          solicitation requirements and are subject to unfair trade practice
          laws.  Competitive electricity providers must have at least 30%
          renewable resources in their energy portfolios, including
          hydro-electric generation.

          8)   A standard-offer service will be available, ensuring
          access for all customers to reasonably priced electric power.
          Unregulated affiliates of CMP and BHE providing retail electric power
          are prohibited from providing more than 20% of the load within their
          respective service territories under the standard offer service,
          while any unregulated affiliate of the Company does not have a
          similar restriction.

          9)   Unregulated affiliates of CMP and BHE marketing and selling
          retail electric power must adhere to specific codes of conduct,
          including, among others:

              a)    employees of the unregulated affiliate providing
              retail electric power must be physically separated from
              the regulated distribution affiliate and cannot be shared;

              b)    the regulated distribution affiliate must provide
              equal access to customer information;

              c)    the regulated distribution company cannot participate
              in joint advertising or marketing programs with the
              unregulated affiliate providing retail electric power;

              d)    the distribution company and its unregulated
              affiliated provider of retail electric power must keep
              separate books of accounts and records; and

              e)    the distribution company cannot condition or tie the
              provision of any regulated service to the provision of any
              service provided by the unregulated affiliated provider of
              electricity.

              The MPUC shall determine the extent of separation required in the
              case of the Company to avoid cross-subsidization and shall
              consider all similar relevant issues as well as the Company's
              small size.

          10) Employees, other than officers, displaced as a result of retail
          competition will be entitled to certain severance benefits and
          retraining programs.  These costs will be
                                   -24-
                                                                     Form 10-Q
                         PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          recovered through charges collected by the regulated
          distribution company.

          11) Other provisions of the new law include provisions for:

              a)    consumer education;
              b)    continuation of low-income programs and demand side
                    management activities;
              c)    consumer protection provisions;
              d)    new enforcement authority for the MPUC to
                    protect consumers.

(b)       Maine Public Service Company, Request for Approval of Sale of
          Generating Assets, Docket No. 98-584

          Reference is made to the Company's Form 8-K for July 7, 1998 and Form
          10-Q for the quarter ended June 30, 1998, in which the Company
          reported that it had agreed to sell all of its generating assets to
          WPS Power Development, Inc. (WPS-PDI) for $37.4 million.

          Further reference is made to the Company's Form 10-Q for the quarter
          ended March 31, 1999 in which the Company described the process
          through which it obtained all necessary State and Federal approvals.

          The Company consummated the sale to WPS-PDI on June 8, 1999, as
          reported in its Form 8-K dated June 9, 1999.  On June 8, 1999,
          after receiving all of the major regulatory approvals, the Company
          completed the sale to WPS-PDI for $37.4 million.  The Company's
          5% ownership in Maine Yankee was not part of the sale, since the
          plant is being decommissioned.  After paying $13.8 million (U.S.)
          in Canadian, Federal and State income taxes, the remaining proceeds
          will be used to reduce the Company's debt.  The gain from the sale is
          currently deferred, pending the MPUC's decision on the Company's
          determination of stranded costs, transmission and distribution costs
          and rate design.  The components of the deferred gain, prior to the
          liquidation of the Company's subsidiary, are as follows:

                                (Dollars in Millions)
                    Gross proceeds              $ 37.5
                    Settlement adjustments         (.1)
                    Net proceeds                  37.4
                    Net book value               (11.0)
                    Taxes                        (10.0)
                    Transition costs, net         (2.2)
                    Deferred gain, net of tax   $ 14.2

          Upon formal liquidation of the subsidiary, approximately $14.1
          million of the proceeds will be transferred to the first mortgage
                                      -25-
                                                                 Form 10-Q
                          PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          trustee for paydown of long-term debt.

          As part of the generating asset sale on June 8, 1999, the Company has
          entered into two indemnity obligations with the purchaser, WPS-PDI.
          First, the Company will be liable, with certain limitations, for
          certain Aroostook River flowage damage.  This liability will continue
          for ten years after the sale and shall not exceed $2,000,000 in the
          aggregate.  Second, the Company has warranteed the condition of the
          sites sold to WPS-PDI, with an aggregate limit of $3,000,000 for two
          years after the date of sale, and five years after the sale for
          environmental claims.  The Company is unaware of any pending claims
          under either of these indemnity obligations.

(c)       Maine Public Utilities Commission, Inquiry Into Bulk Power System
          Administration and Settlement System in Northern Maine, MPUC Docket
          No. 98-929

          On December 1, 1998, the MPUC issued its Notice of Inquiry into the
          structure and operation of a bulk power system administrator and
          retail settlement system for northern Maine.  This Inquiry was
          assigned MPUC Docket No. 98-529.  The MPUC based the need for this
          proceeding on the fact that northern Maine is not electrically
          connected to the New England grid and therefore systems in place in
          the rest of New England that are necessary to support a marketable
          competitive environment do not yet exist in northern Maine.

          The MPUC Notice acknowledges that the four northern Maine utilities
          - the Company, the Houlton Water Company, the Eastern Maine Electric
          Cooperative, Inc. and the Van Buren Light and Power District - have
          formed a working group for the express purpose of developing these
          systems.  The northern Maine utilities developed and filed a proposal
          for these systems on April 30, 1999.  The proposal consisted of an
          Independent System Administrator for northern Maine, which must be
          approved by the FERC.  The working group, together with various
          market participants, is in the process of filing this matter with the
          FERC.  The Company cannot predict the success of any final outcome.

(d)       Maine Public Service Company Investigation of Stranded Costs,
          Transmission and Distribution Utility Revenue Requirements and Rate
          Design, Docket No. 98-577

          On October 14, 1998, and subsequently amended on February 9, 1999 and
          August 11, 1999, the Company filed its determination of stranded
          costs, transmission and distribution costs and rate design with the
          MPUC.  The Company's amended testimony supports its $76.5 million
          estimate of stranded costs, net of available value from the sale of
          the generating assets, when deregulation occurs on March 1, 2000.
          The major components include the
                                   -26-
                                                                     Form 10-Q
                         PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          remaining investment in Seabrook, the above market costs of the
          amended power purchase agreement and recovery of fuel expense
          deferrals related to Wheelabrator-Sherman, the obligation for
          remaining operating expenses and recovery of the Company's
          remaining investment in Maine Yankee, and the recovery of
          several other regulatory assets.  The Company's proposed annual
          revenue requirements supported in the August 11, 1999 filing
          would be approximately $29.6 million:  $16.8 million for
          transmission and distribution and $12.8 million for
          stranded investment.

(e)       Maine Public Utilities Commission Approves Rate Plan
          Stipulation, MPUC Docket No. 98-865

          Reference is made to the Company's Form 10-K for December
          31, 1996 where the Company's rate stabilization plan
          approved by the Maine Public Utilities Commission (MPUC)
          (Docket No. 95-052) in November, 1995 is described.  In
          addition, the Company's Form 10-K for December 31, 1998,
          describes a January, 1998 Stipulation approved by the
          MPUC in Docket No.97-830, which established the rate increase
          beginning February 1, 1998 and the minimum rate increase
          effective February 1, 1999.  The Stipulation also prescribes that the
          savings from the restructured Wheelabrator-Sherman (W-S) Power
          Contract would offset Maine Yankee replacement power costs.  For the
          final year of the rate plan beginning February 1, 1999, the
          Company filed on November 13, 1998, with the MPUC for a 6.4%
          increase.  The Company also stated that it would forego
          part or all of this 1999 increase if the sale of its
          generating assets was allowed to go forward.  On December
          15, 1998, the MPUC granted the Company's request to defer
          the increase to April 1, 1999, as well as extend the rate
          plan by one month to February 29, 2000, to coincide with
          the start of retail competition in Maine.

          In its April 6, 1999 Order, the MPUC approved a March 25,
          1999 Stipulation between the Office of the Public
          Advocate (OPA) and the Company.  Under this Stipulation,
          customer rates will not increase on April 1, 1999, if the
          MPUC approved the sale of the Company's generation assets
          as described in Item 5(c) above.  The approval of the
          Stipulation also resolved certain issues associated with
          the treatment of capacity cost savings from the closure
          of Maine Yankee under the Company's rate stabilization plan.




                                   -27-

                                                                    Form 10-Q
                         PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings - continued

          The principal provisions are as follows:

                    1)  The Company is entitled to a 3.66% specified rate
                    increase as of April 1, 1999.  Rather than increase
                    customer rates, the Company will recognize the revenues
                    that this increase would have generated and,
                    correspondingly, record a deferred asset on the Company's
                    books of account.  The parties to the stipulation also
                    agreed to recommend the use in rates of available value
                    from the asset sale corresponding with the specified rate
                    increase once the MPUC determines the Company's allowed
                    stranded cost recovery in Docket No. 98-577, Public
                    Utilities Commission, Investigation of Stranded Costs,
                    Transmission and Distribution Utility, Revenue
                    Requirements and Rate Design of Maine Public Service
                    Company.

                    2)   The Stipulation also resolves a dispute over the
                    determination of Maine Yankee replacement power costs.
                    The Stipulation allows the Company to continue to
                    recognize and defer Maine Yankee replacement power costs
                    on an energy-only basis, offset by Wheelabrator-Sherman
                    contract restructuring savings, through the end of the
                    rate plan.  The Company agreed to begin amortizing on
                    April 1, 1999, Maine Yankee replacement power costs in
                    the amount of $150,000 per month or a total of $1,650,000
                    for the remaining eleven months of the rate plan.

                    3)   With the Commission's approval of the generation
                    asset sale, the parties agreed that the Company would not
                    increase retail rates on April 1, 1999, to reflect any
                    increase under the Maine Yankee replacement power
                    provisions of the rate plan.  Any Maine Yankee deferred
                    replacement costs will be deferred, and, beginning on
                    March 1, 2000, will be offset by a corresponding amount
                    of available value as allowed in Docket No. 98-577.












                                   -28-

                                                                 Form 10-Q
                        PART II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders

          At the Company's 1999 Annual Meeting of Stockholders, held on May
          11, 1999, the only matter voted upon was the uncontested election
          of the following directors to serve until the 2002 Annual Meeting
          of Stockholders, each of whom received the votes shown:

                                                                Non-votes and
          Nominee                 For             Against        Abstentions

          D. James Daigle      1,322,208          18,886          276,156
          Deborah L. Gallant   1,322,741          18,353          276,156
          G. Melvin Hovey      1,320,288          20,806          276,156

Item 5.   Other Information

          None


Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits - None

          (b)  A Form 8-K was filed on:  June 9, 1999, under Item 5, Other
               Events.

                                 SIGNATURE

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

                                    MAINE PUBLIC SERVICE COMPANY
                                    (Registrant)


Date:  August 13, 1999              By: /s/  Larry E. LaPlante
                                        Larry E. LaPlante
                                        Vice President, Treasurer and
                                        Chief Financial Officer










                                   -29-

\TEXT>
/DOCUMENT>