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, 2000

Commission File No.      1-3429

Maine Public Service Company

(Exact name of registrant as specified in its charter)

Maine

(State or other jurisdiction of incorporation or organization)

01-0113635

(I.R.S. Employer Identification No.)

209 State Street, Presque Isle, Maine

(Address of principal executive offices)

04769

(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 - 1,592,502 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, 2000, and for
the corresponding period of the preceding year; a consolidated balance sheet as of June 30, 2000, and as of December
31,1999, 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, 2000, 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, 2000 and  December 31, 1999, and the results of their operations for the
three and six months ended June 30, 2000 and their cash flows for the six months ended June 30, 2000, 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,        
|                                                                                           | 2000               | 1999            
|Operating Revenues                                                                         | $17,571            | $16,423         
|EA-Standard Offer
Service Margin                                                           | 86                 | 0               
|Total Revenues                                                                             | 17,657             | 16,423          
|Operating Expenses                                                                        
|Energy Supply                                                                              | 10,342             | 9,929           
|T & D Operation &
Maintenance                                                              | 2,981              | 2,921           
|Depreciation                                                                               | 580                | 630             
|Amortization of
Stranded Costs                                                             | 3,161              | 0               
|Amortization                                                                               | 15                 | 376             
|Taxes other than
Income                                                                    | (92)               | 403             
|Provision for Income
Taxes                                                                 | (152)              | 530             
|Total Operating
Expenses                                                                   | 16,835             | 14,789          
|Operating Income                                                                           | 822                | 1,634           
|Other Income (Deductions)                                                                 
|Equity in Income of
Associated Companies                                                   | 80                 | 88              
|Allowance for Equity Funds                                                                
|Used During
Construction                                                                   | 3                  | 12              
|Provision for
Income Taxes                                                                 | (183)              | (113)           
|Other - Net                                                                                | 193                | 76              
|Total                                                                                      | 93                 | 63              
|Income Before
Interest Charges                                                             | 915                | 1,697           
|Interest Charges                                                                          
|Long-Term Debt &
Notes Payable                                                             | 794                | 992             
|Less Carrying
Costs-Stranded Costs
& Allowance for
Borrowed Funds used
During Construction | (229)              | (7)             
|Total                                                                                      | 565                | 985             
|Net Income Available
for Common Stock                                                      | $350               | $712            
|Average Shares
Outstanding (000's)                                                         | 1,594              | 1,617           
|Basic & Diluted
Earnings Per Share                                                         | $0.22              | $0.44           
|Dividends Declared
per Common Share                                                        | $0.30              | $0.25           

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

-3-

MINE PUBLIC SERVICE COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)



|                                                          | June 30, 2000 | December 31,
|--------------------------------------------------------- | ------------- | ------------
|ASSETS                                                    | (Unaudited)   | 1999        
|Utility Plant                                            
|Electric Plant in Service                                 | $75,421       | $75,531     
|Less Accumulated Depreciation                             | 35,611        | 34,701      
|Net Electric Plant in Service                             | 39,810        | 40,830      
|Construction Work-in-Progress                             | 2,731         | 1,052       
|Total                                                     | 42,541        | 41,882      
|Investment in Associated Companies                       
|Maine Yankee Atomic Power
Company                         | 3,635         | 3,753       
|Maine Electric Power Company, Inc.                        | 318           | 279         
|Total                                                     | 3,953         | 4,032       
|Net Utility Plant and Investments                         | 46,494        | 45,914      
|Current Assets                                           
|Cash and Cash Equivalents                                 | 585           | 6,985       
|Deposits with Trustee-Asset Sale                          | 0             | 18,242      
|Accounts Receivable - Net                                 | 6,111         | 7,043       
|Unbilled Base Revenue                                     | 1,973         | 1,149       
|Inventory                                                 | 757           | 509         
|Prepayments                                               | 2,032         | 643         
|Total                                                     | 11,458        | 34,571      
|Regulatory Assets                                        
|Uncollected Maine Yankee
Decommissioning Costs            | 30,702        | 32,158      
|Recoverable Seabrook Costs                                | 17,774        | 23,451      
|Regulatory Assets - SFAS 109 & 106                        | 7,603         | 10,459      
|Deferred Fuel and Purchased Energy
Costs                  | 11,510        | 11,217      
|Regulatory Asset - Power Purchase
Agreement Restructuring | 8,706         | 8,706       
|Unamortized Debt Expense                                  | 3,087         | 1,014       
|Deferred Regulatory Costs, less
accumulated amortization  | 410           | 581         
|Total                                                     | 79,792        | 87,586      
|Other Assets                                             
|Restricted Investments                                    | 2,391         | 2,402       
|Miscellaneous                                             | 832           | 1,075       
|Total                                                     | 3,223         | 3,477       
|Total Assets                                              | $140,967      | $171,548    
|CAPITALIZATION AND LIABILITIES                           
|Capitalization                                           
|Common Shareholders' Equity                              
|Common Stock                                              | $13,071       | $13,071     
|Paid-in Capital                                           | 38            | 38          
|Retained Earnings                                         | 31,045        | 29,765      
|Treasury Stock, at cost                                   | (6,157)       | (5,714)     
|Total                                                     | 37,997        | 37,160      
|Long-Term Debt (less current
maturities)                  | 26,465        | 41,990      
|Current Liabilities                                      
|Long-Term Debt Due Within One
Year                        | 525           | 25          
|Notes Payable                                             | 5,000         | 3,600       
|Accounts Payable                                          | 4,180         | 5,717       
|Accounts Payable - Standard Offer
Service                 | 1,438         | 0           
|Current Deferred Income Taxes                             | 0             | 195         
|Dividends Declared                                        | 478           | 485         
|Customer Deposits                                         | 21            | 17          
|Interest and Taxes Accrued                                | 1,219         | 9,788       
|Total                                                     | 12,861        | 19,827      
|Deferred Credits                                         
|Uncollected Maine Yankee
Decommissioning Costs            | 30,702        | 32,158      
|Deferred Income Tax                                       | 19,120        | 17,160      
|Investment Tax Credits                                    | 270           | 288         
|Deferred Gain & Related
Accounts-Generating Asset Sale    | 10,625        | 20,227      
|Miscellaneous                                             | 2,927         | 2,738       
|Total                                                     | 63,644        | 72,571      
|Total Capitalization and Liabilities                      | $140,967      | $171,548    

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,        
|                                                                       | 2000            
|Cash Flow From Operating Activities                                   
|Net Income                                                             | $2,241          
|Adjustments to Reconcile Net Income to Net Cash Provided by Operations
|Depreciation                                                           | 1,160           
|Amortization                                                           | 575             
|Amortization of Deferred Gain from
Asset Sale                          | (2,339)         
|Income on Tax Exempt
Bonds-Restricted Funds                            | 0               
|Deferred Income Taxes - Net                                            | 2,478           
|AFUDC                                                                  | (6)             
|Accrued Interest on Generating Asset
Sale Deferred Gain                | 161             
|Rate Stabilization Plan Revenue                                        | (379)           
|Change in Deferred Fuel & Purchased
Energy                             | (294)           
|Change in Deferred Regulatory and
Debt Issuance Costs                  | 209             
|Change in Deferred Reg Asset -
Power Purchase Restructuring            | (44)            
|Gain on Sale of Non-Utility Property                                   | (205)           
|Change in Deferred Revenues                                            | 0               
|Change in Benefit Obligation                                           | 250             
|Change in Current Assets and
Liabilities                               | (2,219)         
|Other                                                                  | 61              
|Net Cash Flow Provided By Operating
Activities                         | 1,649           
|Cash Flow From Financing Activities                                   
|Dividend Payments                                                      | (967)           
|Drawdown of Asset Sale Proceeds
with Trustee                           | 18,957          
|Deposit of Non-Utility Property Sale
Proceeds with Trustee             | (211)           
|FAME Financing Costs                                                   | 0               
|Deposit with Trustee - Asset Sale
Proceeds                             | 0               
|Drawdown of Tax Exempt Bonds
Proceeds                                  | 0               
|Purchase of Common Stock                                               | (448)           
|Premium on Retirement of Long
Term Debt                                | (2,106)         
|Retirements on Long-Term Debt                                          | (15,025)        
|Short-Term Borrowings
(Repayments), Net                                | 1,400           
|Net Cash Flow Provided By (Used For)
Financing Activities              | 1,600           
|Cash Flow From Investing Activities                                   
|Payment of Taxes on Generating
Asset Sale Deferred Gain                | (7,853)         
|Proceeds  from Sale of Generating
Assets                               | 0               
|Proceeds from Sale of Non-Utility
Property                             | 208             
|Investment in Electric Plant                                           | (2,004)         
|Net Cash Flow Provided By (Used For)
Investing Activities              | (9,649)         
|Decrease in Cash and Cash Equivalents                                  | (6,400)         
|Cash and Cash Equivalents at
Beginning of Year                         | 6,985           
|Cash and Cash Equivalents at End of
Period                             | $585            
|Change in Current Assets and Liabilities Providing (Utilizing)        
|Cash From Operating Activities                                        
|Accounts Receivable                                                    | $933            
|Unbilled Revenue                                                       | (824)           
|Deferred Maine Yankee
Replacement Power Costs                          | 0               
|Inventory                                                              | (248)           
|Prepayments                                                            | (1,321)         
|Accounts Payable & Accrued
Expenses                                    | (764)           
|Other Current Liabilities                                              | 5               
|Total Change                                                           | ($2,219)        
|Supplemental Disclosure of Cash Flow Information:                     
|Cash Paid During the Period For:                                      
|Interest                                                               | $2,157          
|Income Taxes  (Includes $7.8 million payment in February, 2000        
|to Revenue Canada for 1999 asset sale
taxes)                           | $7,995          



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

-5-

**NOTES TO CONSOLIDATED 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 (ME&NB) 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 1999 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 1999 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.

As of March 1, 2000, the Company bills customers for the energy supplied by standard offer and competitive energy
providers.  The Company is at risk for the collection of the standard offer supply, as it is required to remit funds within 26
days of the billing date.  Competitive energy providers are paid only after the funds are collected from customers.  The
Company records accounts receivable for the amounts billed to Standard Offer Service (SOS) customers and a
corresponding accounts payable for the amounts due to the energy supplier.  No revenue is recognized as the Company is
acting as an agent.

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 reclassifications have been made to the 1999 financial statement amounts in order to conform to the 2000  presentation.

2.    ENERGY ATLANTIC

In January, 1999, Energy Atlantic, the Company's wholly-owned unregulated marketing subsidiary, formally began
operations.  This marketing subsidiary was  involved in wholesale energy transactions during 1999 and the first two months
of 2000, and began selling to retail customers on March 1, 2000, the commencement of retail competition in the State of
Maine.



Energy Atlantic's retail activity comprises standard offer service (SOS) and competitive energy supply (CES), both of
which utilize power provided via a contract with Engage Energy (Engage).  Revenues are received and expenses are paid
directly by an escrow agent which is controlled by Engage.  EA receives a percentage of the net profit from the sale of
energy.  EA is the SOS provider for approximately 525,000 residential and small non-residential customers in the Central
Maine Power (CMP) service territory and was awarded 20% of the medium non-residential customer base in the
Company's service territory.  The utilities bear SOS account collection risk, as they are required to remit the amounts billed
26 days after the billing date to EA's escrow account and maintain the billing and customer service relationship.  EA
records the accrued net margin of the SOS activity as revenue in the financial statements.  EA's CES activity is principally
two large industrial customers in CMP's service territory, as well as residential and small non-residential customers
throughout Maine.  For CES sales, EA negotiates the price directly with the customer, maintains customer service
responsibility and has collection risk.  CES activity is recorded on a gross basis to include the related revenues and
purchased power expenses.

-6-

Energy Atlantic is subject to risk in scheduling electric load in the New England retail market.  Under the terms of its
Wholesale Power Sales Agreement with Engage, EA is required to forecast its expected hourly load in the New England
market with the New England system operator, ISO-NE.  If EA underforecasts that load, ISO-NE will provide the
deficiency at the spot price in the New England market, which is essentially the highest marginal cost in that market during
that hour.  If that spot price is higher than the price at which EA has contracted to purchase power during that hour, EA is
responsible for a portion of that difference under the terms of its Sale Agreement with Engage.  By way of illustration,
prices in ISO-NE rose as high as $6,000 per MWH during the afternoon of May 8, 2000.  During that same period, EA had
underforecasted its actual load by 4% to 5%.  Although the final numbers have not yet been agreed to, EA estimates this
underforecast could result in settlement costs  up to $580,000. Prices of $6,000 per MWH are approximately 197 times the
average ISO-NE market price of $30.50 per MWH for year-to-date May 7, 2000, and management considers this event
unusual and infrequent. Several steps were taken to mitigate the risks of such occurrences in the future and these  new
procedures have produced  $170,000 in positive market settlements since early May.   EA's financial results for the periods
presented are reflected below.

The Company has determined that EA's activity and related energy contracts are considered non-trading in accordance
with EITF 98-10 "Accounting for Companies Involved in Energy Trading and Risk Management Activities".

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.   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 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).  In
June, 1999, ME&NB sold its generating assets and ceased operations.

|                                 | Three Months Ended    
|-------------------------------- | ----------------------
|                                 | (Dollars in Thousands)
|                                 | 6/30/00               
|                                 | EA                    
|Operating
Revenues               | $10,582               
|EA Standard
Offer Service
Margin | 86                    
|Total Revenues                   | 10,668                
|Operations &
Maintenance
Expense | 10,682                
|Taxes                            | 19                    
|Total Operating
Expenses         | 10,701                
|Operating
Income (Loss)          | (33)                  
|Other Income &
Deductions        | 80                    
|Income Before
Interest Charges   | 47                    
|Interest Charges                 | 21                    
|Net Income                       | $26                   

-7-

|                                       | Six  Months Ended     
|-------------------------------------- | ----------------------
|                                       | (Dollars in Thousands)
|                                       | 6/30/00               
|                                       | EA                    
|Operating
Revenues                     | $13,018               
|EA Standard
Offer Service
Margin       | 398                   
|Total Revenues                         | 13,416                
|Operations &
Maintenance
Exp           | 13,291                
|Taxes                                  | 68                    
|Total Operating
Expenses               | 13,359                
|Operating
Income (Loss)                | 57                    
|Other Income &
Deductions              | 81                    
|Income (Loss)
Before  Interest
Charges | 138                   
|Interest Charges                       | 38                    
|Net Income
(Loss)                      | $100                  
|Total Assets                           | $3,145                

3.    RESTRUCTURING AND IMPLEMENTATION OF MULTI-YEAR RATE PLANS

Four-Year Rate Plan From January, 1996 to February, 2000

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 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 was entitled to a 3.66% specified rate increase as of April 1, 1999.  Rather than increasing
customer rates, the Company recognized the revenues related to this rate increase, approximately $1,695,000 through
March 1, 2000, with $379,000 recognized in the first quarter of  2000.  Subsequently, the MPUC allowed the deferred gain
from the asset sale to be reduced in an amount corresponding to the specified rate increase.

(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, ending
February, 2000, with $300,000 recognized in the first quarter of  2000.

Restructuring

As previously reported, 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 described in the
Company's 1999 Form 10-K.

The MPUC has conducted several rulemaking proceedings associated with the new restructuring law.

-8-

In accordance with EITF 97-4, after the details of the restructuring plan were determined by the MPUC rulemaking, the
Company discontinued 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 in the fourth quarter of 1999.
As a result the Company continues to defer certain costs as regulatory assets in instances where recovery through future
regulatory cash flows is anticipated.

At June 30, 2000, $79.8 million of regulatory assets remained on the Company's books.  These regulatory assets are being
amortized over various periods in accordance with the MPUC approved Phase II filing on stranded cost recovery.  The
major components include the remaining investment in Seabrook 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.  As approved by the MPUC, the
amortization of these regulatory assets is offset by the recognition of the deferred gain from the sale of the generating
assets. As of June 30, 2000, $10.6 million of deferred gain remains to be utilized.

Two -Year  Rate Plan Effective March 1, 2000

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 $95.7 million estimate of stranded costs, net of available value from the sale of the
generating assets, representing the return of and return on stranded cost items as described below, when deregulation began
on March 1, 2000.  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.



On October 15, 1999, the Company filed with the MPUC a Stipulation resolving the revenue requirement and rate design
issues for the Company's Transmission and Distribution (T&D) utility.  This Stipulation has been signed by the Public
Advocate and approval will be recommended by the MPUC staff.  Under the Stipulation, the Company's total annual T&D
revenue requirement will be $16,640,000, effective March 1, 2000.  This revenue requirement includes a 10.7% return on
equity with a capital structure based on 51% common equity.  The Stipulation further provides that the  precise level of
stranded cost recovery cannot be determined until final determination of all costs associated with the sale of the Company's
generating assets, but does set forth some general principles concerning the Company's ultimate stranded costs recovery,
including agreement that the major components of the Company's stranded costs are legitimate, verifiable and unmitigable,
and therefore subject to recovery in rates, and that the 3.66% recovery foregone in Docket 98-865 shall be added to
stranded cost recovery in the manner specified in the stipulation in that Docket.  The stipulation also provides that the
Company's recovery of unamortized investment tax credits and excess deferred income taxes associated with the
Company's generating assets must await a final determination ruling from the IRS, which ruling has been sought by Central
Maine Power Company.  On December 1, 1999, the MPUC approved this Stipulation. In early January, 2000, CMP
received its ruling from the IRS which concluded that the unamortized investment tax credits and excess deferred income
taxes associated with the sale of the generating assets could not be used to reduce customer rates without violating the tax
normalization rules for public utilities.

-9-

On January 27, 2000, the MPUC approved a Stipulation in Phase II of Docket No. 98-577 that provided for the recovery in
rates of the Company's stranded investment.  The major element of the Phase II Stipulation was the $12.5 million of
stranded investment recoverable annually beginning March 1, 2000. This revenue requirement includes a return on
unrecovered stranded investment based on the capital structure approved by the MPUC in its December 1, 1999 Order. The
approved capital structure will consist of 51% common equity with an authorized return on equity of 10.7%.  The Phase II
Stipulation also allowed the Company to offset its unrecovered stranded investment in Seabrook by approximately $7
million, representing an amount equal to 35% of the available value from the sale of the generating assets.

The parties to the Phase II Stipulation also resolved several rate design issues, principally the elimination of the inclining
block rate for residential customers.  In addition, the Company was granted several accounting orders incorporating certain
accounting methodologies used in determining the elements of stranded costs.  The annual revenue requirement associated
with the recovery of stranded costs will be reviewed every two years.

With the award of the standard offer rate on November 18, 1999, and orders approving the Company's T&D rates and
stranded investment recovery rates described above, the MPUC has established all elements of customer rates effective
March 1, 2000, the beginning of deregulation in Maine.  On average, our customers' rates will be reduced by approximately
6%.

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 rate making purposes, with the exception of Energy Atlantic activity, which is above the line and not
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    
|                     | June 30,              
|                     | 2000                  
|Current income taxes | $(1,858)              
|Deferred income tax  | 1,898                 
|Investment credits   | (9)                   
|Total income taxes   | $31                   
|Allocated to:       
|Operating Income     | $(152)                
|Other income         | 183                   
|Total                | $31                   

For the six months ended June 30, 2000  and 1999, the effective income tax rates were 38.6% and 42.4%, respectively.
During the second quarter of 2000, the Company paid a premium of $2.1 million to retire the $15 million  9.775% bonds
using proceeds from the sale of the Company's generating assets.  This premium is currently deductible for tax purposes,
but is deferred for book purposes, resulting in the decrease in current income taxes.  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, principally Seabrook, 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.



-10-

The following summarizes accumulated deferred income taxes established on temporary differences under SFAS 109 as of
June 30, 2000 and December 31, 1999.

|                                      | (Dollars in Thousands)
|------------------------------------- | ----------------------
|                                      | June 30 ,             
|                                      | 2000                  
|Seabrook                              | $9,217                
|Property                              | 6,231                 
|Deferred fuel                         | 4,503                 
|Pension and postretirement benefits   | (248)                 
|Generating asset sale                 | (3,764)               
|W-S up-front payment                  | 2,801                 
|Other                                 | 380                   
|Net accumulated deferred income taxes | $19,120               



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).

During 1998 and early 1999 the active interveners, including among others the MPUC Staff, the 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 the filing of a settlement agreement 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 settlements constitute a full settlement of all issues raised in the FERC proceeding including
decommissioning-cost issues and issues pertaining to the prudence of management, operation and decision to permanently
cease operation of the Plant.

The primary settlement provided for Maine Yankee to collect $33.1 million in the aggregate annually, effective August 1,
1999, including both decommissioning costs and  costs related to Maine Yankee's planned independent spent fuel storage
installation (ISFSI).  The 1997 FERC filing had  called for an aggregate annual collection rate of $36.4 million for
decommissioning and the ISFSI, based on a 1997 estimate.  Pursuant to  the approved settlement the amount collected
annually has been  reduced to approximately $25.6 million, effective October 1, 1999,  as a result of 1999 Maine legislation
allowing Maine Yankee to (1) use for decommissioning 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.



-11-

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 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 ISFSI-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.

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, 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 the
maximum amount would be $4.1 million for the period. Based on the results of the two year entitlement auction already
completed, the Company will not incur any liability for this provision in 2000 and does not believe that it will incur any
liability in 2001.

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 restructured 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 a  stipulation described in Note 3, "Implementation of Multi-Year
Rate Plan".   As of June 30,  2000,  the Company has a deferred Maine Yankee replacement power cost balance of
approximately $3.0 million, subject to recovery in accordance with the rate plan.

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 regulation 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, 2000, is carrying on its consolidated balance sheet a
regulatory asset and a corresponding liability in the amount of $30.7 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.

-12-

The MPUC on January 27, 2000, approved a Stipulation providing for the recovery of stranded investment, which includes
the Company's share of Maine Yankee decommissioning expenses, Maine Yankee replacement costs, and the remaining
Maine Yankee investment.

On May 4, 2000, Maine Yankee notified its decommissioning operations contractor, Stone & Webster Engineering
Corporation ("Stone & Webster"), that it was terminating its decommissioning operations contract pursuant to the terms of
the contract.  Subsequently, Stone & Webster notified Maine Yankee that it was disputing Maine Yankee's grounds for
terminating the contract.  On May 8, 2000, Stone & Webster announced that it had signed a letter of intent with Jacobs
Engineering Group, Inc. ("Jacobs"), regarding a proposed transaction in which Jacobs would acquire substantially all of
Stone & Webster's assets in exchange for an immediate credit facility and other consideration, including cash and stock.
Stone & Webster said  the credit facility was intended to enable it to address its  liquidity difficulties and continue to
operate its businesses until the asset sale was completed.   Stone & Webster also announced that it intended to seek
bankruptcy court approval of the asset sale and credit agreement.

On June 2, 2000, Stone & Webster filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code with
the United States Bankruptcy Court for the District of Delaware.  By Sale Order dated July 13, 2000, the Bankruptcy Court
approved the sale of substantially all of Stone & Webster's assets to the successful bidder in the Chapter 11 sale, The Shaw
Group, Inc. ("Shaw"), for cash, stock, and the assumption of certain liabilities of Stone & Webster, and the earlier
agreement with Jacobs was terminated.  Stone & Webster reported that the Shaw transaction was effectively closed on July
14, 2000, and that it would continue to operate as a Debtor-in-Possession subject to the supervision and orders of the
Bankruptcy Court.

On May 10, 2000, Maine Yankee entered into an interim agreement with Stone & Webster in order to allow
decommissioning work to continue and avoid the adverse consequences of an abrupt or inefficient demobilization from the
Plant site.  After obtaining assignments of several subcontracts from Stone & Webster and upon termination of the interim
agreement on July 1, Maine Yankee at least temporarily assumed the general contractor role, utilizing a reduced number of
Stone & Webster personnel under a revised interim agreement that expires September 30, 2000.  The decommissioning of
the Plant site is progressing, with major emphasis being directed to maintaining the schedule on critical-path projects such
as a construction of the ISFSI and preparation of the Plant's reactor vessel for eventual shipment to an off-site disposal facility.

On June 30, 2000, Federal Insurance Company ("Federal"), which provided performance and payment bonds in the
amount of $37.6 million each in connection with the decommissioning operations contract, filed a Complaint for
Declaratory Judgement against Maine Yankee in the United States Bankruptcy Court for the District of Delaware.  The
Complaint alleges that Maine Yankee improperly terminated the decommissioning operations contract with Stone &
Webster and failed to give proper notice of the termination to Federal under the contract, and that Federal therefore had no
further obligations under the bonds.  Maine Yankee believes that its termination of the decommissioning operations
contract was proper, but cannot predict the outcome of the litigation.

Maine Yankee is evaluating all available long-term alternatives for safely and efficiently completing the decommissioning
of the Plant site, including the possibilities of contracting with a new decommissioning operations contractor or assuming
that function itself on a long-term basis.  However, Maine Yankee cannot predict at this point what effect the financial
difficulties of Stone & Webster and the termination of its decommissioning operations contract with Maine Yankee will
have on the cost or schedule of the decommissioning project.

6.    GENERATING ASSET DIVESTITURE

On July 7, 1998, the Company and WPS Power Development, Inc. (WPD-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.

-13-

On June 8, 1999, after receiving all of the major regulatory approvals, the Company completed the sale to WPD-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  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, and is being recognized according
to 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  are as follows:



|                                               | (Dollars in Millions)
|---------------------------------------------- | ---------------------
|Gross proceeds                                 | $37.5                
|Settlement adjustment                          | (.1)                 
|Net proceeds                                   | 37.4                 
|Net book value                                 | (11.5)               
|Excess taxes on sale of Canadian assets        | (3.4)                
|Transition costs, net                          | (1.8)                
|Other                                          | .7                   
|Available deferred gain                        | 21.4                 
|Utilization of available value per MPUC orders | (11.0)               
|Remaining deferred gain, net of tax*           | $10.4                

*The $10.4 million deferred gain above is the $10.6 million "Deferred Gain and Related  Accounts-Generating Asset
Sale" as of June 30, 2000 reduced by the remaining deferral of transition costs allowed by the MPUC.



The Company offset a portion of its Recoverable Seabrook costs with available value from its deferred asset sale gain as
follows:



|                                                                                 | Seabrook | Deferred Gain
|-------------------------------------------------------------------------------- | -------- | -------------
|- Write-off of recoverable Seabrook
costs                                        | $5,060   |              
|- Write-off of deferred tax liability
associated with recoverable Seabrook
costs | (3,644)  |              
|- Recognition of deferred asset sale gain                                        |          | $7,006       
|- Recognition  of deferred tax
associated with deferred asset sale gain          |          | (2,795)      
|- Write-off of SFAS 109 Regulatory
Asset associated with Seabrook                | 2,795    |              
|- Net Change                                                                     | $4,211   | $4,211       



Upon formal liquidation of the subsidiary in December, 1999,  approximately $14.1 million of the proceeds were
transferred to the first mortgage trustee for  paydown of long-term debt.  After a $15 million paydown on June 14, 2000,
the Company has reduced long-term debt by $18.9 million using generating asset sale proceeds.  In addition, the Company
paid an early retirement premium of $2,106,000.  Consistent with past treatment, the Company has deferred this premium
and will amortize the balance over the remaining life of the original debt issue.

-14-

With the sale of the Company's generating assets in June, 1999, the Company  purchased energy from the new owners,
PDI, under an agreement that expired February 29, 2000, and these purchases are classified as purchased energy .

As part of the generating assets 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 warranted 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.

7.    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 for all fiscal years beginning after
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 is currently reviewing the impact, if any, that EA's energy
contracts will have when this pronouncement is implemented in the future.  The Company has reviewed its revenue
recognition policies and concluded they comply with the provisions of  Staff Accounting Bulletin 101, "Revenue
Recognition in Financial Statements" and EITF No. 99-19, "Recording Revenue Gross as a Principal versus Net as an Agent".





-15-

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, 2000 along with
the corresponding information for the previous year are as follows:



|                        | Three Months Ended
|----------------------- | ------------------
|                        | June 30,          
|                        | 2000              
|Earnings per share      | $ .22             
|Net income in thousands | $ 350             

For the second quarter of 2000 compared to the same quarter last year, the decrease in consolidated earnings per share
(EPS) of $.22 is attributable to the following:

-16-

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 2000

Compared to Second Quarter of 1999

|                                                                                                                                                        | EPS 

Increase (Decrease)
|------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------
|Decreased retail revenues and sales for resale due to
deregulation starting March 1, 2000                                                               | $(2.25)                  
|Decrease in power procurement and Maine Yankee
expenses, offset by amortization of stranded costs according
to rate stipulation beginning March 1, 2000 | 1.66                     
|Reduction in net interest costs with use of asset sale
proceeds                                                                                         | .21                      
|Decrease in taxes other than income, principally property tax
refund                                                                                    | .19                      
|Decrease in other revenues, principally power marketing
earnings                                                                                        | (.12)                    
|Change in operating and maintenance expenses                                                                                                            | .05                      
|Other                                                                                                                                                   | .04                      
|Total                                                                                                                                                   | $ (.22)                  



Consolidated operating revenues for the quarters ended June 30, 2000 and 1999, are as follows:

|                            | 2000   | 1999   
|--------------------------- | ------ | -------
|(Dollars in
Thousands)      | $      | MWH    
|Maine Public Service
(MPS)  |        |        
|- Retail                    | 6,209  | 128,083
|- Other Revenues            | 780    | -      
|Energy Atlantic, LLC
(EA)   |        |        
|- Competitive
Energy Supply | 10,582 | 233,912
|- Other Revenues            | -      | -      
|- Standard Offer
Margin     | 86     | -      
|Totals                      | 17,657 | 361,995



With the start of retail competition on March 1, 2000, the Parent Company's (MPS) retail revenues will reflect
transmission and distribution charges, and do not include energy supply.  Therefore, comparisons with periods after
February, 2000 are difficult. MPS retail sales increased by 5.5% (6,707 MWH), reflecting increases in the following

-17-

Form 10-Q

PART 1.  FINANCIAL INFORMATION

Item 2.      Management's Analysis of Quarterly Income Statements

Results of Operations (Continued)

customer classes:  large commercial (17.5%), principally McCain Foods, medium commercial (2.3%), and small
commercial (3.0%), offset by a 2.3% (913 MWH) decrease in residential sales..  Offsetting these increases was a 37,089
MWH decrease in Other Sales due to the termination of the sales agreement with Perth-Andover and a decrease in sales of
Wyman output after the generating asset sale on June 8, 1999.  The new owners of the generating assets now provide
service to Perth-Andover.  The Company's wholly-owned marketing subsidiary, Energy Atlantic, LLC's (EA)Competitive
Energy Supply sales increased by 233,912 MWH, reflecting sales to retail customers beginning March 1, 2000 as discussed
below in "Energy Atlantic Operations".

For the quarters ended June 30, 2000 and 1999, total operating expenses were $16,835,000 and $14,789,000, respectively.
The changes in operating expenses and energy sources are as follows:



|                                     | Increase/(Decrease)
|------------------------------------ | -------------------
|(Dollars in Thousands)               | $                  
|MPS Purchases                        | (6,693)            
|System Generation                    | (624)              
|EA Purchases                         | 7,730              
|Total Energy Supply                  | 413                
|T&D Operation & Maintenance
Expenses | 60                 
|Depreciation                         | (50)               
|Amortization                         | (361)              
|Amortization of Stranded Costs       | 3,161              
|Income Taxes                         | (682)              
|Taxes Other than Income              | (495)              
|Total                                | 2,046              

The 44,505 MWH net decrease in energy supply reflects the start of retail competition on March 1, 2000, with the
Company providing transmission and distribution (delivery) services but no longer selling energy supply.  Purchases by EA
increased by 120,217 MWH when it began serving customers as a competitive energy supplier beginning on March 1,
2000.  The $624,000 (60,897 MWH) decrease in generation expenses is a result of the sale of the Company's generating
assets on June 8, 1999 and, under an agreement that expired on February 29, 2000, the Company purchased the output from
the new owners, PDI.  Beginning on March 1, 2000, as a result of competitive bidding, PDI is paying market price to the
Company for W-S output, and the above-market amount is included in stranded cost amortization, i.e., $3,841,000 for the
second quarter of 2000. Taxes other than income decreased by $495,000 due to a $420,000 property tax rebate. This rebate
was received from the City of Caribou in settlement of property tax issues

-18-

Form 10-Q

PART 1.  FINANCIAL INFORMATION

Item 2.      Management's Analysis of Quarterly Income Statements



Results of Operations (Continued)

from 1996 through 1999.  T&D (transmission and distribution) operation and maintenance expenses increased by
$60,000 reflecting increases in administrative and general and medical expenses, offset by decreased legal and regulatory
expenses.  The amortization of stranded costs of $3,161,000 reflects the recognition of stranded costs beginning March 1,
2000, including the W-S above-market costs discussed above, in accordance with the Stipulation approved by the MPUC
on January 27, 2000 (discussed further in Item (b) of the Legal Proceedings section) providing for recovery of the
Company's stranded investment.

Energy Atlantic Operations

Energy Atlantic's (EA) retail activity comprises standard offer service (SOS) and competitive energy supply (CES), both
of which utilize power provided via a contract with Engage Energy (Engage).  Revenues are received and expenses are paid
directly by an escrow agent which is controlled by Engage.  EA receives a percentage of the net profit from the sale of
energy.  EA is the SOS provider for approximately 525,000 residential and small non-residential customers in the Central
Maine Power (CMP) service territory and was awarded 20% of the medium non-residential customer base in the
Company's service territory.  The utilities bear SOS account collection risk, as they are required to remit the amounts billed
26 days after the billing date to an escrow account and maintain the billing and customer service relationship.  EA records
the accrued net margin of the SOS activity as revenue in the financial statements.  EA's CES activity is principally two
large industrial customers in CMP's service territory, as well as residential and small non-residential customers throughout
Maine.  For CES sales, EA negotiates the price directly with the customer, maintains customer service responsibility and
has collection risk.  CES activity is recorded on a gross basis to include the related revenues and purchased power expenses.

Energy Atlantic is subject to risk in scheduling electric load in the New England retail market.  Under the terms of its
Wholesale Power Sales Agreement with Engage, EA is required to forecast its expected hourly load in the New England
market with the New England system operator, ISO-NE.  If EA underforecasts that load, ISO-NE will provide the
deficiency at the spot price in the New England market, which is essentially the highest marginal cost in that market during
that hour.  If that spot price is higher than the price at which EA has contracted to purchase power during that hour, EA is
responsible for a portion of that difference under the terms of its Sale Agreement with Engage.  By way of illustration,
prices in ISO-NE rose as high as $6,000 per MWH during the afternoon of May 8, 2000.  During that same period, EA had
underforecasted its actual load by 4% to 5%.  Although the final numbers have not yet been agreed to, EA estimates this
underforecast could result in settlement costs up to $580,000.  Prices of $6,000 per MWH are approximately 197 times the
average ISO-NE market price of $30.50 per MWH for year-to-date May 7, 2000, and management considers this event
unusual and infrequent.  Several steps were taken to mitigate the risks of such occurrences in the future and these new
procedures have produced $170,000 in positive market settlements since early May.

-19-

Form 10-Q

PART 1.  FINANCIAL INFORMATION

Item 2.      Management's Analysis of Quarterly Income Statements



Results of Operations (Continued)

Liquidity



Net cash flows from operating activities were $1,649,000 for the first six months of 2000.   For the period, the Company
paid $967,000 in dividends, deposited $211,000 ofproceeds from the sale of land into the trustee account and  drew down
$18,957,000 of the asset sale proceeds from the trustee.  The proceeds were used to pay down long-term debt by
$15,000,000, along with a scheduled paydown of $25,000, and to pay the $2,106,000 premium on the early retirement of
long-term debt.  The Company also repurchased 25,000 shares of common stock for $448,000 in order to manage its capital
structure to limit common equity to 51%, as explained in Item (c) of the Legal Proceedings section, and increased
short-term borrowings by $1,400,000.  For the period, the Company invested $2,004,000 in electric plant, paid $7,853,000
in Canadian income taxes on the generating asset sale, and received proceeds of $208,000 from the sale of land.

Net cash flows from operating activities were $2,777,000 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 $1,749,000 in electric plant, paid $809,000
in dividends and used $25,000 to reduce long-term debt.  Final financing costs of $5,000 were paid related to the issuance
of FAME's $11,540,000 Taxable Electric Rate Stabilization Revenue Notes on behalf of the Company in 1998.  Short-term
borrowings decreased by $2,100,000 because of the cash flows from operations.

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 1999 Annual Report, which is Exhibit 13 of the
Company's 1999 Form 10- K.  The discussion occurs in Note 9, "Long-Term Debt", of the Notes to Consolidated Financial
Statements.

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

-20-

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, 1998 and 1999, 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 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.  The Company
sold its generating assets on June 8, 1999.

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.

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.



-21-

Form 10-Q

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings - continued

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.

On January 27, 2000, the MPUC approved a Stipulation, as detailed further in Item 1(b) below, that provided for
recovery in rates of the Company's stranded investment.

The MPUC shall include in the rates to be charged by the transmission and distribution utility decommissioning expenses
for Maine Yankee.  By 2003 and no later than every three years thereafter until the stranded costs are recovered, the MPUC
shall review and revaluate the stranded cost recovery.



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

-22-

Form 10-Q

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings - continued



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

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 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 $95.7 million estimate of stranded costs, net of available value from the sale of the
generating assets, when deregulation began on March 1, 2000.  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.

On October 15, 1999, the Company filed with the MPUC a Stipulation resolving the revenue requirement and rate design
issues for the Company's Transmission and Distribution (T&D) utility.  This Stipulation has been signed by the Public
Advocate and approval will be recommended by the MPUC staff.  Under the Stipulation, the Company's total annual T&D
revenue requirement will be $16,640,000, effective March 1, 2000.  This revenue requirement includes a 10.7% return on
equity with a capital structure based on 51% common equity.  The Stipulation further provides that the

precise level of stranded cost recovery cannot be determined until final determination of all costs associated with the sale
of the Company's generating assets, but does set forth some general principles concerning the Company's ultimate stranded
costs recovery, including agreement that the major components of the Company's stranded costs are

legitimate, verifiable and unmitigable, and therefore subject to recovery in rates, and that the 3.66% recovery foregone in
Docket 98-865 shall be added to stranded cost recovery in the manner specified in the stipulation in that Docket.  The
stipulation also provides that the Company's recovery of unamortized investment tax credits and excess deferred

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Form 10-Q

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings - continued

income taxes associated with the Company's generating assets must await a final determination ruling from the IRS,
which ruling has been sought by Central Maine Power Company.  On December 1, 1999, the MPUC approved this
Stipulation.  In early January, 2000, CMP received its ruling from the IRS which concluded that the unamortized
investment tax credits and excess deferred income taxes associated with the sale of the generating assets could not be used
to reduce customer rates without violating the tax normalization rules for public utilities.

On January 27, 2000, the MPUC approved a Stipulation in Phase II of Docket No. 98-577 that provided for the recovery
in rates of the Company's stranded investment.  The major element of the Phase II Stipulation was the $12.5 million of
stranded investment recoverable annually beginning March 1, 2000.  This revenue requirement includes a return on
unrecovered stranded investment based on the capital structure approved by the MPUC in its December 1, 1999 Order. The
approved capital structure will consist of 51% common equity with an authorized return on equity of 10.7%.  The Phase II
Stipulation also allowed the Company to offset its unrecovered stranded investment in Seabrook by approximately $7
million, representing an amount equal to 35% of the available value from the sale of the generation assets.  The parties to
the Phase II Stipulation also resolved several rate design issues, principally the elimination of the inclining block rate for
residential customers.  In addition, the Company was granted several accounting orders incorporating certain accounting
methodologies used in determining the elements of stranded costs.  The annual revenue requirement associated with the
recovery of stranded costs will be reviewed every two years.

With the award of the standard offer rate on November 18, 1999, and orders approving the Company's T&D rates and
stranded investment recovery rates described above, the MPUC has established all elements of customer rates effective
March 1, 2000, the beginning of deregulation in Maine.  On average, our customers' rates will be reduced by approximately
6%.

(c) Maine Public Utilities Commission Approves Common Stock Repurchase Program, Docket No. 99-610

Reference is made to Item 3(e) of the Company's Form 10-K, in which the Company reported that stipulations resolving
revenue requirements and rate design issues for transmission and distribution rates, as well as stranded investment, have
been approved by the Maine Public Utilities Commission (MPUC).  In the Stipulations, approved by the MPUC, the parties
also agreed to a capital structure consisting of 51% common equity and 49% of debt.  After paying off debt with proceeds
from the sale of the Company's generating assets, as required under the Company's mortgage indentures, the Company
projects that the percentage of common equity as a component in its capital structure would exceed 51%.

In order to manage its capital structure to limit common equity to 51%, the MPUC on November 17, 1999, approved the
Company's request to repurchase up to 500,000 shares of its common stock over a period of five years.  The shares will be
repurchased through an open-market program.  Previously over a five-year period from September, 1989 to September,
1994, the Company purchased 250,000 shares at a cost of $5.7 million, all of

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Form 10-Q

PART II.  OTHER INFORMATION

Item 1.      Legal Proceedings - continued

which are held in treasury shares, in order to maintain the Company's capital structure at

levels appropriate for an investor-owned electric utility.  During the second quarter of 2000, the Company purchased
15,000 shares at a cost of $277,000, increasing the current program's total to 25,000 shares at a cost of $448,000.

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

At the Company's 2000 Annual Meeting of Stockholders, held on May 9, 2000, the only matter voted upon was the
uncontested election of the following directors to serve until the 2003 Annual Meeting of Stockholders, each of whom
received the votes shown:

|                   | Non-votes and
|------------------ | -------------
|Nominee            | For          
|Robert E. Anderson | 1,471,324    
|Nathan L. Grass    | 1,471,690    
|J. Paul Levesque   | 1,470,974    

Item 5.     Other Information

None

Item 6.       Exhibits and Reports on Form 8-K

None

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 11, 2000

By: /s/ Larry E. LaPlante

Larry E. LaPlante

Vice President, Treasurer and

Chief Financial Officer 
                                                                                        -25-