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    March 31, 1997    Commission File Number   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
          Subsidiary Condensed Consolidated Financial Statements,
          including a statement of consolidated operations for the
          quarter ended March 31, 1997, and for the corresponding period
          of the preceding year; a consolidated balance sheet as of
          March 31, 1997, and as of December 31, 1996, 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 March 31, 1997, 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 March 31, 1997 and
          December 31, 1996, and the results of their operations for the
          three months ended March 31, 1997 and their cash flows for the
          three months ended March 31, 1997.































                                   -2-

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

                                                    Three Months Ended 
                                                        March 31,     
                                                     1997        1996   

Operating Revenues                                  $15,368     $15,756      
Operating Expenses
   Purchased Power                                   10,694       7,504      
   Other Operation and Maintenance                    2,837       3,385      
   Depreciation                                         627         631      
   Amortization                                         409         399      
   Taxes Other Than Income                              446         443      
   Provision (Benefit) for Income Taxes                (166)      1,099      
      Total Operating Expenses                       14,847      13,461       
Operating Income                                        521       2,295       
Other Income (Deductions)
   Equity in Income of Associated Companies             110          92       
   Allowance for Equity Funds Used During 
     Construction                                         4           2       
   Other Income Taxes                                   (44)        (10)      
   Other - Net                                            3          (6)      
Total                                                    73          78       
Income Before Interest Charges                          594       2,373       
Interest Charges
   Long-Term Debt and Notes Payable                     850         923       
   Less Allowance for Borrowed Funds                       
      Used During Construction                           (2)         (1)      
Total                                                   848         922       
Net Income (Loss) Available for Common Stock           (254)      1,451       
Average Shares Outstanding (000's)                    1,617       1,617       
Earnings (Loss) Per Share of Common Stock            ($0.16)      $0.90       
Dividends Declared per Common Share                   $0.25       $0.46       


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














                                   -3- 

                MAINE PUBLIC SERVICE COMPANY AND SUBSIDIARY                
                       CONSOLIDATED BALANCE SHEETS 
                              (Unaudited)
                         (Dollars in Thousands)

                                                March 31,   December 31,
               ASSETS                             1997         1996
Utility Plant
   Electric Plant in Service                     $90,570     $91,224
   Less Accumulated Depreciation                  41,760      41,670
      Net Electric Plant in Service               48,810      49,554
   Construction Work-in-Progress                   1,021         461 
        Total                                     49,831      50,015
Investment in Associated Companies
   Maine Yankee Atomic Power Company               3,672       3,585
   Maine Electric Power Company, Inc.                 95          74
        Total                                      3,767       3,659
        Net Utility Plant and Investments         53,598      53,674
Current Assets
   Cash and Temporary Investments                  1,369       1,291
   Deposits for Interest and Dividends               467         805
   Accounts Receivable - Net                       5,473       5,021
   Unbilled Base Revenue                           1,343       1,653
   Deferred Fuel and Purchased Energy                125         125
   Current Deferred Income Taxes                     163         222
   Inventory                                       1,310       1,194
   Prepayments                                       772         959
      Total                                       11,022      11,270
Other Assets
   Restricted Investment                           3,650       4,055
   Recoverable Seabrook Costs                     27,367      27,722
   Regulatory Asset - SFAS 109 & 106              12,671      12,713
   Deferred Fuel and Purchased Energy              4,294       3,951
   Other                                           3,268       3,329
      Total                                       51,250      51,770
Total Assets                                    $115,870    $116,714

       CAPITALIZATION AND LIABILITIES
Capitalization
   Common Shareholders' Equity
      Common Stock                               $13,071     $13,071
      Paid-in Capital                                 38          38
      Retained Earnings                           30,039      30,697
      Treasury Stock, at cost                     (5,714)     (5,714)
         Total                                    37,434      38,092
      Long-Term Debt (less current maturities)    39,780      39,805
Current Liabilities
   Long-Term Debt Due Within One Year              1,315       1,315
   Notes Payable                                   1,800       1,400
   Accounts Payable                                5,148       5,475
   Dividends Declared                                404         744
   Customer Deposits                                  58          62
   Interest and Taxes Accrued                        635         962
      Total                                        9,360       9,958
Deferred Credits
   Deferred Income Tax                            23,881      23,694
   Investment Tax Credits                            702         720
   Deferred Revenues                                 691         630
   Miscellaneous                                   4,022       3,815
      Total                                       29,296      28,859
Total Capitalization and Liabilities            $115,870    $116,714

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

                                   -4-

                    MAINE PUBLIC SERVICE COMPANY                              
                  Statement of Consolidated Cash Flows
                             (Unaudited)
                       (Dollars in Thousands)

                                                       Three Months Ended  
                                                              March 31,
                                                          1997       1996

Cash Flow From Operating Activities
   Net Income (Loss)                                     ($254)     $1,451

Adjustments to Reconcile Net Income (Loss) to Net Cash
   Provided by Operations
   Depreciation                                            627         630
   Amortization                                             54          45
   Amortization of Seabrook Costs                          355         355
   Income on Tax Exempt Bonds-Restricted Funds             (46)          0
   Deferred Income Taxes                                   239        (252)
   AFUDC                                                    (6)         (2)
   Change in Deferred Fuel & Purchased Energy             (344)       (344)
   Change in Deferred Regulatory and Debt Issuance Costs   (65)        391
   Change in Deferred Revenues                              62          92
   Change in Benefit Obligation                            197         606
   Change in Current Assets and Liabilities               (730)        295
   Other                                                   107         158
Net Cash Flow from Operating Activities                    196       3,425

Cash Flow From Financing Activities
   Dividend Payments                                      (404)       (744)
   Redemption of Tax Exempt Bonds                            0     (10,000)
   Drawdown of Tax Exempt Bonds Proceeds                   450           0
   Retirements on Long-Term Debt                           (25)        (25)
   Tax Exempt Bond Refunding Note                            0      10,000
   Short-Term Borrowings, Net                              400      (1,400)
Net Cash Flow Provided By (Used In) Financing Activities   421      (2,169)

Cash Flow Used For Investing Activities
   Investment in Electric Plant                           (539)       (552)
   Net Cash Used For Investment Activities                (539)       (552)

Increase in Cash and Temporary Investments                  78         704
Cash and Temporary Investments at Beginning of Year      1,291         976
Cash and Temporary Investments at End of Period         $1,369      $1,680

Change in Current Assets and Liabilities Providing
   Cash From Operating Activities
      Accounts Receivable                                ($452)       $689
      Unbilled Revenue                                     310          89
      Inventory                                           (115)        (76)
      Prepayments                                          187          37
      Accounts Payable & Accrued Expenses                 (655)       (434)
      Other Current Liabilities                             (5)        (10)
   Total Change                                          ($730)       $295

Supplemental Disclosure of Cash Flow Information:
Cash Paid During the Period For:
   Interest                                             $1,301      $1,601
   Income Taxes (1997 is net of a $500,000 refund)       ($390)       $127

     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 and its wholly-owned Canadian subsidiary, Maine 
   and New Brunswick Electrical Power Company, Limited (the Subsidiary).

   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 1996 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 1996 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 temporary equivalents.



2.  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 and 2.9% on   
   February 1, 1997.  The Company has the right to receive additional     
   annual increases in retail rates of 2.75% on February 1, 1998 and       
   February 1, 1999.  Several significant accounting orders that became    
   effective January 1, 1996 included the deferral of $902,000, net of     
   income taxes, annually of Wheelabrator-Sherman purchases, the five year 
   amortization of the Company's $1.3 million, net of income taxes, share of 
   the Maine Yankee 1995 sleeving repair costs, and the $638,000, net of income 
   taxes, amortization over ten years of deferred post-retirement benefits 
   other than pensions (SFAS 106).  In addition, the plan allows the five  
   year amortization of the $139,000 deferral of pension expenses and      
   $92,000 deferral of early retirement expenses, both net of income taxes, 
   related to the lay-up of the Caribou Steam Units and the four year      
   amortization of $300,000, net of tax, of deferred fuel from the December 
   31, 1995 balance.

   With higher winter rates for our commercial and industrial customers 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.

                                    -6-
3.  INCOME TAXES                                                        
      
   A summary of Federal and State income taxes charged (credited) to income 
   is presented below. For accounting and ratemaking purposes, income tax  
   provisions (benefits) 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   
                                         March 31,        
                                      1997       1996   
      Current income taxes          $  (361)  $ 1,361   
      Deferred income taxes             257      (233)  
      Investment credits                (18)      (19)  
      Total income taxes            $  (122)  $ 1,109    

      Allocated to:
      Operating Income              $  (166)  $ 1,099   
      Other income                       44        10    
      Total                         $  (122)  $ 1,109    
  
   The following summarizes accumulated deferred income taxes established on 
   temporary differences under SFAS 109 as of March 31, 1997 and           
   December 31, 1996.
                                              (Dollars in Thousands)
                                             March 31,    December 31,
                                               1997           1996
      Seabrook                              $15,214         $15,273
      Property                                8,121           8,104
      Regulatory expenses                     1,402           1,201        
      Investment tax credits                   (478)           (478)
      Pension and postretirement
       benefits                                (627)           (670)
      Other                                     249             264 
      Net accumulated deferred income 
       taxes                                $23,881         $23,694 

4.  AMENDMENTS OF INTEREST COVERAGE TESTS IN FINANCIAL INSTRUMENTS
            
    The Company owns 5% of the Common Stock of Maine Yankee Atomic Power   
    Company (Maine Yankee).  As a result of an extended Maine Yankee outage 
    that began December 6, 1996 which may last through the summer of 1997, 
    the Company has been incurring replacement power costs of approximately 
    $170,000 per week. In addition, the Company is responsible for         
    additional operating costs during 1997 of $2.3 million associated with 
    an Independent Safety Assessment of Maine Yankee by the Nuclear        
    Regulatory Commission.  Further costs are being incurred as Entergy    
    Corporation has begun providing management services to Maine Yankee.   
    Additional costs may also be expected, if the complexity of cable      
    separation and associated issues require an extended period for their  
    resolution. These additional costs will adversely impact the Company's 
    1997 financial results.
                                    -7-

   The Company's short-term revolving credit agreement and a letter of     
   credit supporting its 1996 revenue bonds contain interest coverage tests 
   that the Company must satisfy to avoid default. On March 28, 1997, the  
   Company and the Banks agreed on amendments to the revolving credit      
   agreement and letter of credit and reimbursement agreement which adjust 
   the interest coverage tests to exclude Maine Yankee incremental         
   replacement power costs through September 30, 1997. Under the amendment 
   to the revolving credit agreement, the Company was obligated to issue a 
   first mortgage bond of $11 million as collateral for the maximum amount 
   of Company's obligations under the revolving credit agreement.  Both    
   amendments required the issuance of the first mortgage bond on or before 
   May 15, 1997.  On April 28, 1997 the Maine Public Utilities Commission  
   approved the issuance of the first mortgage bonds, and the Company issued 
   the bonds on May 5, 1997.  Without the amendments, the Company would have 
   been in violation of the interest coverage tests for the twelve months  
   ended March 31, 1997 and would have been in default on these instruments. 


   As mentioned above, the amendments to the Company's revolving credit    
   agreement  and letter of credit and reimbursement agreement only exclude 
   Maine Yankee incremental replacement power costs through September 30,  
   1997.  If Maine Yankee does not return to service prior to September 30, 
   1997, interest coverage tests for periods after September 30, 1997 would 
   be required to reflect any incremental Maine Yankee replacement power   
   costs after that date. The Company cannot predict whether or not these  
   tests will be met for the fourth quarter of 1997.  



























                                    -8-

Item 2.   Management's Analysis of Quarterly Income            Form 10-Q
          Statements

                          Results of Operations

          Earnings (loss) per share and net income (loss) available for
          common stock for the three months ended March 31, 1997 along
          with the corresponding information for the previous year are as
          follows:
                                        Three Months Ended
                                             March 31,           

                                         1997     1996      

          Earnings (loss) per share     $(.16)    $ .90     

          Net income (loss)
          available for Common
          Stock - in Thousands          $(254)    $1,451    

          For the first quarter of 1997 compared to the same quarter last
          year, the decrease in consolidated earnings per share (EPS) of
          $1.06 is attributable to the following:
                                                          EPS        
                                                        Increase
                                                       (Decrease)

          Increase in operating expenses resulting
            from extended Maine Yankee outage in 1997:

               Replacement Power Costs                    $(.77)

               Capacity Expenses                           (.26)
                    Total                                 (1.03)

          Increase in purchase power expense associated
            with independent power producer-
            Wheelabrator-Sherman                          ( .11)

          Decrease in retail revenues:
          2.9% rate increase effective 2/1/97   $  .10
          Unbilled revenue adjustment in 1996
            and volume variance                  ( .09)
          Load retention discounts               ( .06)   ( .05)

          1996 voluntary early retirement program
            expense charged in 1996                         .16

          Other                                           ( .03)
               Total                                     $(1.06)



                                   -9-
                                                                 Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

          The additional replacement power and capacity expenses
          associated with the unscheduled Maine Yankee outage that began
          on December 6, 1996 and continued through the entire first
          quarter of 1997 had material impact on the Company's earnings
          and cash flows for the first quarter of 1997.  For the first
          quarter of 1997, Maine Yankee replacement power costs reduced
          earnings by $.77 per share, while additional capacity expense to
          address issues identified in the ISA further reduced earnings by
          $.26 per share.  In addition, a 5% contractual price increase
          and a 2% production increase at Wheelabrator-Sherman (WS), an
          independent power producer, also decreased earnings by $.11 per
          share.  Load retention contract discounts to several large
          customers and unbilled revenue adjustments were partially offset
          by rate increases effective February 1, 1997, resulting in a
          $.05 decrease in earnings per share.  Partially offsetting these
          decreases were the March 1996 recognition of expenses related to
          an early retirement program of $.16 per share.     
               
          Consolidated operating revenues for the quarter ended March
          31, 1997 and 1996, are as follows:

                                   1997                     1996

(Dollars in Thousands)          $       MWH              $        MWH

Retail                       14,442   131,531         14,360    131,690
Sales for Resale                643    18,448            611     18,101
Total Primary Sales          15,085   149,979         14,971    149,791
Secondary Sales                  93     1,876            396     22,051
Other Revenues/Rev. Adjust.     190                      389           
Total Operating Revenues     15,368   151,855         15,756    171,842


          Primary sales, including retail and sales for resale, in the
          first quarter of 1997 were 149,979 MWH, approximately the same
          as last year.  Secondary sales decreased by 20,175 MWH,
          reflecting a decrease in power marketing activities.  During
          the first quarter of 1996, secondary sales of the Company's
          Wyman Unit No. 4 and Maine Yankee entitlements for varying
          lengths of time were made at prevailing market rates,
          representing the Company's power marketing activities.  As
          previously mentioned, since Maine Yankee was not available for
          




                                   -10-

                                                            Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

          the same period in 1997, secondary sales for the quarter were
          limited to Wyman No. 4 entitlements.

          Retail revenues for the first quarter of 1997 were $14,442,000
          compared to $14,360,000 for the same period of 1996,
          reflecting the 2.9% increase in retail rates effective
          February 1, 1997 offset by load retention discounts to certain
          large industrial customers that were approved by the Maine
          Public Utilities Commission.

          For the first quarters ended March 31, 1997 and 1996, total
          operating expenses were $14,847,000 and $13,461,000,
          respectively.  The changes in operating expenses and energy
          sources are as follows:

                                                Increase/(Decrease)
          (Dollars in Thousands)                    $         MWH
          Purchased Power Expenses 
               Maine Yankee                       454       (64,386)
               Wheelabrator-Sherman               303           719 
               NB Power                         2,171        63,769 
               Other Purchases                    262         8,173 
                                                3,190         8,275 
          Generating Expenses                    (145)      (29,625) 
          Other Operation & Maint. Expenses      (403) 
          Depreciation                             (4)
          Amortization                             10 
          Income Taxes                         (1,265)
          Taxes Other than Income                   3                  
               Total                            1,386       (21,350) 
          
          As previously mentioned, Maine Yankee was out of service for
          all of the first quarter of 1997, while it operated at a 90-
          percent level of operation for all but 24 days of the first
          quarter of 1996, resulting in a decrease in production of
          64,386 MWH.  For an update on Maine Yankee, please see the
          following section titled, "Maine Yankee".  Hydro production
          decreased by 25,061 MWH because of abnormally high generation
          during the first quarter of 1996.  To offset the loss of Maine
          Yankee and lower hydro production, purchases from NB Power
          increased by 63,769 MWH to meet the Company's energy
          requirements.  Although energy purchased from Maine Yankee





                                   -11-

                                                            Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

          decreased resulting in a reduction in fuel costs of $240,000,
          capacity expenses increased by $694,000 due to expenses to
          address issues identified in the ISA, resulting in a net
          increase of $454,000.  Other operation and maintenance
          expenses decreased by $403,000 primarily due to the
          recognition of $402,000 in expenses related to an early
          retirement program in 1996.  Generating expenses decreased by
          $145,000 because of reduced activity at the Caribou Steam
          Plant following Steam Units 1 and 2 placement on inactive
          status effective January 1, 1996.

          Maine Yankee

          The Company owns 5% of the Common Stock of Maine Yankee Atomic
          Power Company (Maine Yankee).  As a result of an extended
          Maine Yankee outage that began December 6, 1996 and may last
          through the summer of 1997, the Company has been incurring
          replacement power costs of approximately $170,000 per week. 
          In addition, the Company is responsible for additional
          operating costs of $2.3 million associated with an Independent
          Safety Assessment of Maine Yankee by the Nuclear Regulatory
          Commission.  Further costs are being incurred as Entergy
          Corporation has begun providing management services to Maine
          Yankee.  Additional costs may also be expected, if the
          complexity of cable separation and associated issues require
          an extended period for their resolution.  These additional
          costs will adversely impact the Company's 1997 financial
          results.  Maine Yankee believes the Plant will be out of
          service at least until August 1997, but cannot predict when or
          whether all of the regulatory and operational issues will be
          satisfactorily resolved or what effect the ultimate total of
          the repair and improvements to the Plant will have on the
          economics of operating the Plant.

          For additional information regarding Maine Yankee,
          reference is made to the Company's 1996 Annual Report,
          "Analysis of Financial Condition and Review of Operations-
          1996, Maine Yankee", for discussion of the Nuclear Regulatory
          Commission's Independent Safety Assessment results issued
          October 7, 1996, and the current shutdown that began on
          December 6, 1996, to review and resolve cable separation and 
          cable routing issues.





                                   -12-

                                                            Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

                          Financial Condition

          Net cash flows from operating activities were $196,000 for the
          first three months of 1997.  The $3,229,000 decrease in net
          cash flow from operating activities reflects the additional
          replacement power costs and capacity expenses totalling
          approximately $1.7 million required in 1997 due to the
          unscheduled Maine Yankee outage that began on December 6, 1996
          and continues until Maine Yankee is able to restart.  For the
          period, $539,000 was invested in electric plant, $404,000 was
          paid in dividends and $25,000 was used to reduce long-term
          debt.  Short-term borrowings increased by $400,000 for working
          capital and construction requirements.  The Company drew down
          $450,000 in 1997 from the 1996 tax-exempt revenue bond
          proceeds based on qualifying property.     

          For the three months ended March 31, 1996, net cash flows from
          operating activities were $3,425,000.  For the first three
          months of 1996, the Company invested $552,000 in electric
          plant, paid $744,000 in dividends, reduced long term debt by
          $25,000, and reduced short-term borrowings by $1.4 million. 
          In March 1996, the Company borrowed $10,000,000 under a
          refunding note from Fleet Bank of Maine to retire the 1991
          tax-exempt bonds.  In June, 1996, the refunding note was
          repaid using proceeds from the issuance of new tax-exempt
          bonds.

          The previously mentioned rate plan, approved by the MPUC on
          November 13, 1995 and effective January 1, 1996, will assist
          the Company in dealing with the economic uncertainties that
          lay ahead with the loss of Loring and Houlton.  The Plan
          provides stable, predictable rates for our customers, economic
          development rates to encourage investment in our service
          territory, and competitive returns for our shareholders.

          Reduction of Dividend

          As reported on the Company's March 7, 1997, Form 8-K, the
          Company's Board of Directors declared a quarterly dividend of
          $.25 (annualized rate of $1.00 per share) on the Company's
          Common Stock, payable April 1, 1997, to holders of record at
          the close of business March 14, 1997.  This represents a




                    
                                   -13-

                                                            Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

          reduction of 46% from the Company's previous quarterly level
          of $.46 (annualized rate of $1.84) per share.  This reduction
          was in response to the impact on the Company's earnings and
          cash flows of the ongoing outage at Maine Yankee.

          Amendments of Interest Coverage Tests in Financial Instruments

          The Company's short-term revolving credit agreement and a
          letter of credit supporting its 1996 tax-exempt revenue bonds
          contain interest coverage tests that the Company must satisfy
          to avoid default.  As previously mentioned, the extended
          outage at Maine Yankee has adversely impacted the financial
          results for the first quarter of 1997.

          On March 28, 1997, the Company and the Banks agreed on
          amendments to the revolving credit agreement and letter of
          credit and reimbursement agreement which adjust the interest
          coverage tests to exclude Maine Yankee incremental replacement
          power costs through September 30, 1997.  Under the amendment
          to the revolving credit agreement, the Company was obligated
          to issue a first mortgage bond of $11 million as collateral
          for the maximum amount of Company's obligations under the
          revolving credit agreement.  Both amendments required the
          issuance of the first mortgage bond on or before May 15, 1997. 
          On April 28, 1997 the Maine Public Utilities Commission
          approved the issuance of the first mortgage bonds, and the
          Company issued the bonds on May 5, 1997.  Without these
          amendments, the Company would have been in violation of its
          interest coverage tests for the twelve months ended March 31,
          1997 and would have been in default on these instruments.

          As mentioned above, the amendments to the Company's revolving
          credit agreement and letter of credit and reimbursement
          agreement only exclude Maine Yankee incremental replacement
          power costs through September 30, 1997.  If Maine Yankee does
          not return to service prior to September 30, 1997, interest
          coverage tests for periods after September 30, 1997 would be
          required to reflect any incremental Maine Yankee replacement
          power costs after that date. 








                                   -14-

                                                            Form 10-Q
                    PART 1.  FINANCIAL INFORMATION

Item 2.   Management's Analysis of Quarterly Income Statements
          Results of Operations (Continued)

          1997 Earnings

          As previously mentioned, Maine Yankee is not expected to
          return to service until later in the summer of 1997.  The
          related replacement power and additional capacity expenses to
          address the cable separation issues and items addressed in the
          Independent Safety Assessment will adversely impact 1997
          earnings, as demonstrated in this quarterly report.  For 1997,
          based on the current estimate of Maine Yankee's return to
          service and replacement power costs, the Company estimates a
          small operating loss for the year.  Under the Company's multi-
          year rate plan, described in the Company's 1996 Annual Report,
          the Company has the right to receive specified retail rate
          increases through 1999.  This plan also includes provisions
          for additional cost recovery in certain extraordinary
          situations such as very low earnings or in the event of a
          Maine Yankee plant outage exceeding six consecutive months. 
          The Company will continue to assess whatever options it may
          have to recover any additional costs and, in addition, is
          making every effort to reduce its 1997 cash expenditures. 
          These efforts will include a review of the level of dividends
          on the Company's Common Stock.

          Forward-Looking Statements

          The above discussion 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 results of safety investigations, the cost of
          maintenance or the operating performance of Maine Yankee.







                                   -15-

                                                             Form 10-Q
                      PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings and Regulatory Matters 

          (a)  Maine Public Utilities Commission, Re: Electric Utility
               Industry Restructuring Study, Docket No. 95-462.

               In 1995, the Maine Legislature passed Resolve 89 "To  
               Require a Study of Retail Competition in the Electric
               Utility Industry" (the "Resolve"), to begin a process for
               developing recommendations on the future structure of the
               electric utility industry in Maine.  The process included
               the appointment of a Work Group on Electric Utility
               Restructuring to develop a plan for the orderly
               transition to a competitive market for retail purchases
               and sales of electricity.  The Company participated in
               this Work Group, which was unable to reach a consensus on
               a recommended plan by its reporting deadline.

               The Resolve also directed the MPUC to conduct a study to
               develop at least two plans for the orderly transition to
               retail competition in the electric utility industry in
               Maine and to submit a report of its findings by January
               1, 1997.  One plan would be designed to achieve "... full
               retail market competition for purchases and sales of
               electric energy by the year 2000" and the other to
               achieve a more limited form of competition.  The Resolve
               also stated that the MPUC's findings would have no legal
               effect, but would "... provide the Legislature with
               information in order to allow the Legislature to make
               informal decisions when it evaluates these plans."

               On December 12, 1995, the MPUC issued a Notice of Inquiry
               (the "Notice") initiating its study.  In the Notice, the
               MPUC solicited detailed proposals and plans for achieving
               retail competition in Maine by the year 2000 and
               requested the proposals include specific plans for an
               orderly transition to a more competitive market.  The
               Notice required that plans and proposals be filed with
               the MPUC by interested parties no later than January 31,
               1996, and outlined a schedule calling for submittal of a
               final report to the Legislature in December, 1996.

               On January 30, 1996, the Company filed its restructuring
               proposal with the MPUC.  The major elements of this
               proposal were:

               (a)  The separation of the Company's generation assets
               (including contracts and entitlements) from its



                                   -16-

                                                             Form 10-Q
                      PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings and Regulatory Matters (Continued)

               transmission and distribution assets.  The Company
               suggested this separation could be accomplished by either
               a functional separation of generation from distribution
               and transmission within the Company's existing corporate
               structure or by separating generation, on the one hand,
               and distribution and transmission, on the other, into two
               wholly-owned subsidiaries.  The Company strongly opposes
               any recommendation that it be required to divest itself
               of its generation assets.

               (b)  The economic and resource planning regulation of
               generation would cease.  The FERC would continue to
               regulate transmission, and distribution would remain a
               franchised monopoly subject to continued regulation by
               the MPUC.  The owner of the distribution system would be
               obligated to connect all willing customers.

               (c)  If certain necessary changes in the operation and
               management of the regional transmission grid are in
               place, all retail customers in Maine would, by the year
               2000, be entitled to purchase electric energy directly
               from any entity that wished to supply it to them.

               (d)  The Company would be entitled to full recovery of
               all its stranded costs.  This recovery would be
               accomplished by a charge on the distribution system that
               would apply to all retail customers.  In its filing, the
               Company estimates that its stranded costs could be as
               high as $68 million.  This amount consists primarily of
               the above-market costs of the Company's contract with
               Wheelabrator-Sherman, a non-utility generator, estimated
               at $44 million and deferred regulatory assets, such as
               its Seabrook investment of $24 million.

               On December 31, 1996, the MPUC issued its Recommended
               Plan on how to restructure Maine's electric utility
               industry.  The Plan recommends the following:

                    *    As of January, 2000, all Maine consumers would
                    have the option to choose an electric power
                    supplier.

                    *    As of January, 2000, Maine would not regulate,
                    as public utilities, companies producing or selling
                    electric power.



                                   -17-

                                                             Form 10-Q
                      PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings and Regulatory Matters (Continued)

                    *    Regulated public utilities would continue to
                    provide electric transmission and distribution
                    (T&D) services.

                    *    As of January, 2000, the Company, Central
                    Maine Power Company (CMP) and Bangor Hydro-Electric
                    Company (BHE), the State's three largest electric
                    utilities, would be required to structurally
                    separate their generation assets and functions from
                    transmission and distribution functions.  CMP and
                    BHE would be required to fully divest themselves of
                    their generation assets by 2006.  

                    *    The Plan does not recommend generation
                    divestiture for the Company, but instead proposed
                    to allow the Company to retain its generation
                    assets in a separate, but wholly-owned, subsidiary. 
                    In making this recommendation, the MPUC relied upon
                    MPS's relatively small size, its isolation from the
                    rest of New England and concerns about the
                    Company's Canadian Subsidiary.  The Plan further
                    stated that the MPUC would "periodically review
                    whether divestiture [of the Company's generation
                    assets] would be required".

                    *    The T&D utilities would retain their ownership
                    interests in Maine Yankee, but would be required to
                    transfer the rights to the output to an affiliated
                    generation company.  After 2005, BHE and CMP, but
                    not the Company, would be required to sell the
                    rights to the output to the highest bidder.

                    *    All contracts between the utilities and any
                    qualifying facilities under PURPA will remain with
                    the T&D companies.

                    *    The utilities should be provided a reasonable
                    opportunity to fully recover its generation-related
                    stranded costs.  All of the Company's anticipated
                    stranded costs are generation-related.

               Because the MPUC's Recommended Plan does not have any
               binding legal effect, this issue must ultimately be
               resolved by the Maine Legislature.  Many parties to this
               proceeding have taken positions that vary substantially 
               


                                   -18-

                                                             Form 10-Q
                      PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings and Regulatory Matters (Continued)

          from those set forth in this Plan and those parties can be
          expected to advocate their positions before the Legislature. 
          The Company cannot, therefore, predict what form the
          restructuring of Maine's electric utility industry will
          ultimately take or what effect that restructuring will have on
          the Company's business operations or financial results.

          (b)  Maine Public Service Company, Request For Open Access
               Transmission Tariff, FERC Docket No. ER 95-836-000.

               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. 
               A decision by the FERC regarding the fees under the
               Company's tariff is not expected until later in 1997. 
               The Company cannot predict the FERC's ultimate decision
               in this matter.
          

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

          None

Item 5.   Other Information

          None











                              -19-

                                                             Form 10-Q
                      PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits - none.

          (b)  A Form 8-K was filed on: January 31, 1997, under Item 5,
               Other Events; February 14, 1997, under Item 5, Other
               Events; March 7, 1997, under Item 5, Other Events; and
               March 31, 1997, under Item 5, Other Events, and Item 7,
               Exhibits.


                               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:  May 12, 1997                 /s/  Larry E. LaPlante          
                                   Larry E. LaPlante, Vice President
                                   Finance, Administration and Treasurer


























                                   -20-

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