SECURITIES AND EXCHANGE COMMISSION

                   Washington, D. C.  20549
                          FORM 10-Q

 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended: MARCH 31, 1998  

                              or

 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from: __________ to  _________


           Commission File Number 0-1125


            MADISON GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)


       Wisconsin                     39-0444025
 (State or other jurisdiction     (IRS Employer 
 of incorporation or              Identification No.)
   organization)


       133 South Blair Street, Madison, Wisconsin 53703
       (Address of principal executive offices and ZIP code)

                        (608) 252-7000
      (Registrant s telephone number including area code)


 Common Stock Outstanding at May 14, 1998: 16,079,718 Shares 

 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, and (2) has been subject to
 such filing requirements for the past 90 days.  Yes [X]  No [  ]
<PAGE>
<TABLE>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                              Madison Gas and Electric Company and Subsidiaries
                            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED INCOME
                                            (Thousands of Dollars)
                                                 (Unaudited)
<CAPTION>
                                                        Three Months Ended
                                                            March 31,
                                                    ------------------------
                                                      1998             1997
                                                    -------          -------
<S>                                                 <C>              <C>
 STATEMENTS OF INCOME
 Operating Revenues:
  Electric   . . . . . . . . . . . . . . . . . .    $38,393          $37,431
  Gas  . . . . . . . . . . . . . . . . . . . . .     36,722           47,482
                                                    -------          -------
    Total Operating Revenues   . . . . . . . . .     75,115           84,913
                                                    -------          -------
 Operating Expenses:
  Fuel for electric generation   . . . . . . . .      6,846            7,509
  Purchased power  . . . . . . . . . . . . . . .      1,702            4,314
  Natural gas purchased  . . . . . . . . . . . .     22,781           33,176
  Other operations   . . . . . . . . . . . . . .     15,845           15,358
  Maintenance  . . . . . . . . . . . . . . . . .      2,527            2,540
  Depreciation and amortization  . . . . . . . .      8,258            6,364
  Other general taxes  . . . . . . . . . . . . .      2,330            2,214
  Income taxes   . . . . . . . . . . . . . . . .      4,592            4,085
                                                    -------          -------
    Total Operating Expenses   . . . . . . . . .     64,881           75,560
                                                    -------          -------
 Net Operating Income  . . . . . . . . . . . . .     10,234            9,353
 Allowance for funds used during construction - 
   equity funds  . . . . . . . . . . . . . . . .         24               12
 Other income, net . . . . . . . . . . . . . . .        691              531
 Non-utility operating income/(loss), net  . . .        133              786
                                                    -------          -------
 Income before interest expense  . . . . . . . .     11,082           10,682
                                                    -------          -------
 Interest expense:
  Interest on long-term debt   . . . . . . . . .      2,423            2,404
  Other interest   . . . . . . . . . . . . . . .        257              248
  Allowance for funds used during construction -           
    borrowed funds   . . . . . . . . . . . . . .        (13)              (6)
                                                    -------          -------
    Net Interest Expense   . . . . . . . . . . .      2,667            2,646
                                                    -------          -------
 Net Income  . . . . . . . . . . . . . . . . . .    $ 8,415          $ 8,036
                                                    =======          =======
 Earnings per share of common stock (basic and             
 diluted) (Note 3) . . . . . . . . . . . . . . .      $0.52            $0.50

                                                    =======          =======
          STATEMENTS OF RETAINED INCOME 
                         
 Balance - beginning of period . . . . . . . . .    $52,285          $50,451
 Earnings on common stock  . . . . . . . . . . .      8,415            8,036
 Cash dividends on common stock (Note 3) . . . .     (5,199)          (5,146)
                                                    -------          -------
 Balance - end of period . . . . . . . . . . . .    $55,501          $53,341
                                                    =======          =======
<FN>
The accompanying notes are an integral part of the above statements. 
</TABLE>
<PAGE>
<TABLE>
                               Madison Gas and Electric Company and Subsidiaries
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (Thousands of Dollars)
                                                 (Unaudited)
<CAPTION>
                                                            Three Months Ended
                                                                 March 31,
                                                         -----------------------
                                                           1998            1997
                                                         -------         -------
<S>                                                      <C>             <C>
Operating Activities:
  Net income   . . . . . . . . . . . . . . . . . . .     $ 8,415         $ 8,036

  Items not affecting working capital:                          
    Depreciation and amortization  . . . . . . . . .       8,258           6,364
    Deferred income taxes  . . . . . . . . . . . . .      (1,438)             16
    Amortization of nuclear fuel   . . . . . . . . .         618               -
    Amortization of investment tax credits   . . . .        (186)           (191)
    Allowance for funds used during construction -              
    equity funds   . . . . . . . . . . . . . . . . .         (24)            (12)
    Other  . . . . . . . . . . . . . . . . . . . . .         (44)            181
                                                         -------         -------
      Net funds provided from operations   . . . . .      15,599          14,394
  Changes in working capital, excluding cash                    
  equivalents, sinking funds,
  maturities, and interim loans:                                
    Decrease in current assets   . . . . . . . . . .      14,843          22,801
    Increase/(decrease) in current liabilities   . .       3,883         (13,812)
  Other noncurrent items, net  . . . . . . . . . . .       6,542           7,096
                                                         -------         -------
    Cash provided by Operating Activities  . . . . .      40,867          30,479
 Financing Activities:
  Cash dividends on common stock   . . . . . . . . .      (5,199)         (5,146)
  Other decreases in First Mortgage Bonds  . . . . .          10               9
  Decrease in interim loans  . . . . . . . . . . . .     (24,750)        (21,250)
                                                         -------         -------
    Cash used for Financing Activities   . . . . . .     (29,939)        (26,387)
                                                         -------         -------
 Investing Activities:
  Additions to utility plant and nuclear fuel  . . .      (5,176)         (3,317)
  Allowance for funds used during construction -                
    borrowed funds   . . . . . . . . . . . . . . . . .       (13)             (6)
  Increase in nuclear decommissioning fund   . . . .      (2,517)         (1,141)
                                                         -------         -------
    Cash used for Investing Activities   . . . . . .      (7,706)         (4,464)
                                                         -------         -------
 Change in Cash and Cash Equivalents (Note 5)  . . .       3,222            (372)
  Cash and cash equivalents at beginning of period .       2,108           5,288
                                                         -------         -------
    Cash and cash equivalents at end of period   . .     $ 5,330         $ 4,916
                                                         =======         =======
<FN>
The accompanying notes are an integral part of the above statements. 
</TABLE>
<PAGE>
<TABLE>
                              Madison Gas and Electric Company and Subsidiaries
                                         CONSOLIDATED BALANCE SHEETS
                                            (Thousands of Dollars)
                                                 (Unaudited)
<CAPTION>
                                                       Mar. 31,         Dec. 31,
                                                         1998             1997
                                                       --------         --------
<S>                                                    <C>              <C>
                   ASSETS
 Utility Plant, at original cost, in service:
  Electric   . . . . . . . . . . . . . . . . . . . .   $512,536         $510,405
  Gas  . . . . . . . . . . . . . . . . . . . . . . .    182,553          181,861
                                                       --------         --------
    Gross plant in service   . . . . . . . . . . . .    695,089          692,266
  Less accumulated provision for depreciation  . . .   (419,811)        (407,602)
                                                       --------         --------
    Net plant in service   . . . . . . . . . . . . .    275,278          284,664
  Construction work in progress  . . . . . . . . . .     12,625           10,995
  Nuclear decommissioning fund   . . . . . . . . . .     66,099           59,179
  Nuclear fuel, net  . . . . . . . . . . . . . . . .      7,637            8,255
                                                       --------         --------
    Total Utility Plant  . . . . . . . . . . . . . .    361,639          363,093
                                                       --------         --------
 Other property and investments  . . . . . . . . . .      8,004            8,252
                                                       --------         --------
 Current Assets:
  Cash and cash equivalents  . . . . . . . . . . . .      5,330            2,108
  Accounts receivable, less reserves of $1,156 and             
     $1,235, respectively   . . . . . . . . .  . . .     29,450           28,395
  Unbilled revenue   . . . . . . . . . . . . . . . .      8,928           13,580
  Materials and supplies, at average cost  . . . . .      5,794            5,557
  Fossil fuel, at average cost   . . . . . . . . . .      3,304            3,605
  Stored natural gas, at average cost  . . . . . . .      1,696            9,851
  Prepaid taxes  . . . . . . . . . . . . . . . . . .      4,692            7,190
  Other prepayments  . . . . . . . . . . . . . . . .      1,552            2,081
                                                       --------         --------
    Total Current Assets   . . . . . . . . . . . . .     60,746           72,367
                                                       --------         --------
 Deferred charges  . . . . . . . . . . . . . . . . .     21,801           28,078
                                                       --------         --------
      Total Assets   . . . . . . . . . . . . . . . .   $452,190         $471,790
                                                       ========         ========
           CAPITALIZATION AND LIABILITIES
 Capitalization (see statement)  . . . . . . . . . .   $314,072         $310,846
                                                       --------         --------
 Current Liabilities:
  Long-term debt sinking fund requirements   . . . .        200              200
  Interim loans - commercial paper outstanding   . .      8,750           33,500
  Accounts payable   . . . . . . . . . . . . . . . .     11,269           14,528
  Accrued taxes  . . . . . . . . . . . . . . . . . .      7,113               79
  Accrued interest   . . . . . . . . . . . . . . . .      3,550            2,206
  Accrued nonregulated items   . . . . . . . . . . .      4,753            4,837
  Other  . . . . . . . . . . . . . . . . . . . . . .      4,095            5,247
                                                       --------         --------
    Total Current Liabilities  . . . . . . . . . . .     39,730           60,597
                                                       --------         --------
 Other Credits:
  Deferred income taxes  . . . . . . . . . . . . . .     44,134           45,572
  Regulatory liability - SFAS 109  . . . . . . . . .     24,645           24,875
  Investment tax credit - deferred   . . . . . . . .     10,499           10,685
  Other regulatory liabilities   . . . . . . . . . .     19,110           19,215
                                                       --------         --------
    Total Other Credits  . . . . . . . . . . . . . .     98,388          100,347
                                                       --------         --------
 Commitments . . . . . . . . . . . . . . . . . . . .          -                -
                                                       --------         --------
      Total Capitalization and Liabilities   . . . .   $452,190         $471,790
                                                       ========         ========
<FN>
 The accompanying notes are an integral part of the balance sheets. 
</TABLE>
<PAGE>
<TABLE>
                              Madison Gas and Electric Company and Subsidiaries
                                  CONSOLIDATED STATEMENTS OF CAPITALIZATION 
                                            (Thousands of Dollars)
                                                 (Unaudited)
<CAPTION>
                                                      Mar. 31,           Dec. 31,
                                                        1998               1997
                                                      --------           --------
<S>                                                   <C>                <C>
 Common Shareholders' Equity:

  Common stock - par value $1 per share:
    Authorized 50,000,000 shares
    Outstanding 16,079,718 shares  . . . . . . .      $ 16,080           $ 16,080

  Amount received in excess of par value   . . .       112,558            112,558

  Retained income  . . . . . . . . . . . . . . .        55,501             52,285
                                                      --------           --------
    Total Common Shareholders' Equity  . . . . .       184,139            180,923
                                                      --------           --------
 First Mortgage Bonds:
  6 1/2%, 2006 series:
    Pollution Control Revenue Bonds  . . . . . .         6,675              6,675

  8.50%, 2022 series   . . . . . . . . . . . . .        40,000             40,000

  6.75%, 2027A series:
    Industrial Development Revenue Bonds   . . .        28,000             28,000

  6.70%, 2027B series:
    Industrial Development Revenue Bonds   . . .        19,300             19,300

  7.70%, 2028 series   . . . . . . . . . . . . .        21,200             21,200
                                                      --------           --------
    First Mortgage Bonds Outstanding   . . . . .       115,175            115,175

  Unamortized discount and premium on 
    bonds, net   . . . . . . . . . . . . . . . .        (1,042)            (1,052)

  Long-term debt sinking fund requirements   . .          (200)              (200)
                                                      --------           --------
    Total First Mortgage Bonds   . . . . . . . .       113,933            113,923

 Other Long-Term Debt:

  6.01%, due 2000  . . . . . . . . . . . . . . .        11,000             11,000

  6.91%, due 2004  . . . . . . . . . . . . . . .         5,000              5,000
                                                      --------           --------
    Total Capitalization   . . . . . . . . . . .      $314,072           $310,846
                                                      ========           ========
<FN>
The accompanying notes are an integral part of the above statements. 
</TABLE>
<PAGE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                          March 31, 1998

The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC).
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company
believes that the disclosures made are adequate to make the
information presented not misleading. In the opinion of Company
management, all adjustments (consisting of only normal recurring
adjustments) necessary to fairly present results have been made.

It is suggested that these consolidated financial statements be
read in conjunction with the financial statements and the notes
thereto set forth on pages 18 through 27 of the Company's 1997
Annual Report to Shareholders and in the Company's 1997 Annual
Report on Form 10-K.

1. Summary of Significant Accounting Policies

   The accounting and financial policies relative to the
   following items have been described in the "Notes to
   Consolidated Financial Statements" in the Company's 1997
   Annual Report to Shareholders and have been omitted herein
   because they have not changed materially through the date of
   this report.

   a.   General
   b.   Utility plant
   c.   Nuclear fuel
   d.   Joint plant ownership
   e.   Depreciation
   f.   Income taxes
   g.   Pension plans
   h.   Postretirement benefits other than pensions
   i.   Fair value of financial instruments
   j.   Capitalization matters: First Mortgage Bonds and other
        long-term debt; preferred stock; and notes payable to
        banks, commercial paper, and lines of credit
   k.   Gas marketing subsidiaries
   l.   Commitments
   m.   Segments of business 
   n.   Regulatory assets and liabilities

<PAGE>
2. Nuclear Decommissioning

   Nuclear decommissioning costs are currently being accrued to
   an end-of-service life of 2002 for Kewaunee Nuclear Power
   Plant (Kewaunee). These costs are currently recovered from
   customers in rates and are deposited in external trusts. The
   Company is presently funding decommissioning costs at the $8.1
   million annual level. These trusts are shown on the balance
   sheet in the utility plant section, and as of March 31, 1998,
   these trusts totaled $66.1 million (fair market value).

   Decommissioning costs are recovered through depreciation
   expense, exclusive of earnings on the trusts. Net earnings on
   the trusts are included in other income. The long-term, after-
   tax earnings assumption on these trusts is 5.6 percent.

   The Company s share of Kewaunee decommissioning costs is
   estimated to be $79.9 million in current dollars based on a
   site-specific study performed in 1992 using immediate
   dismantlement as the method of decommissioning.

   Decommissioning costs are assumed to inflate at an average
   rate of 6.0 percent. Physical decommissioning is expected to
   occur during the period 2014 through 2021, with additional
   expenditures being incurred during the period 2022 through
   2039 related to the storage of spent nuclear fuel at the site.

3. Per-Share Amounts

   Earnings per share of common stock are computed on the basis
   of the weighted average of the daily number of shares
   outstanding. For the three months ended March 31, 1998 and
   1997, there were 16,079,718 shares.

   Dividends declared and paid per share of common stock for the
   three months ended March 31, 1998 and 1997, were $0.323 and
   $0.320, respectively.

4. Rate Matters

   The Company received approval from the Public Service
   Commission of Wisconsin (PSCW) on March 19, 1998, to recover
   approximately $1.8 million (excluding carrying costs) of
   deferred expenses related to the 1997 repairs to the Kewaunee
   steam generator tubes. The deferred expenses are being 
   recovered through a four-month customer surcharge effective
   April through July of 1998.

<PAGE>
   On April 15, 1998, the Company announced its intention to
   increase electric rates for the test year beginning January 1,
   1999, by $14.6 million, or 8.9 percent annually, and increase
   natural gas rates by $4.6 million, or 4.5 percent annually,
   for the same time period. The proposed changes are based on a
   requested return on common stock equity of 12.5 percent and
   would remain in effect through the year 2000. The rising cost
   of fuel coupled with increased transmission and generation
   costs to improve electric reliability are the primary reasons
   for the requested increase in electric rates. The proposed gas
   rate increase will cover pipeline expansion, which will help
   bring the lowest-cost gas possible to all of the Company's
   customers. Also, both rate requests include costs to implement
   technology to ensure computer system compatibility with the
   year 2000.

5. Supplemental Cash Flow Information

   For purposes of the Consolidated Statements of Cash Flows, the
   Company considers cash equivalents to be those investments
   that are highly liquid with maturity dates of less than three
   months.

   Cash payments for interest, net of amounts capitalized, and
   cash receipts from income tax refunds, net, were as follows:

                                  Three Months Ended
                                       March 31,
                                  -------------------

   (Thousands of dollars)          1998         1997
                                   ----         ----
   Interest, net of                    
   amounts capitalized . . .       $993        $1,302
   Income taxes received,              
   net of payments . . . . .       $894        $  256

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

The Company s internally generated funds were greater than the
funds used for construction and nuclear fuel expenditures during
the three months ended March 31, 1998 and 1997. It is anticipated
that 1998 construction and nuclear fuel expenditures will be
approximately $46.4 million.

<PAGE>
Cash provided by operating activities increased $10.4 million, or
34 percent, from the same three-month period a year ago due to a
decrease in current assets.

Cash used for financing activities increased $3.6 million, or
13.5 percent, compared to the same period a year ago. This was
mainly attributable to a decrease in the Company's short-term
debt.

Bank lines of credit available to the Company as of March 31,
1998, were $45 million.

The Company's capitalization ratios were as follows:

                                  Mar. 31,     Dec. 31,
                                    1998         1997
                                  --------     --------
Common shareholders' equity . .    57.0%         52.5%
Long-term debt* . . . . . . . .    40.3          37.8
Short-term debt . . . . . . . .     2.7           9.7

*Includes current maturities and current sinking fund
requirements.

The Company's bonds are currently rated Aa2 by Moody's Investors
Service, Inc., and AA by Standard & Poor's Corporation. The
Company's dealer-issued commercial paper carries the highest
ratings assigned by Moody's and Standard & Poor's.

Business and Regulatory Environment

In February 1996, the PSCW submitted a report to the State
Legislature on electric utility restructuring in Wisconsin.
Included in the report was a 32-step work plan and time line
summarizing expected restructuring activities. During the summer
of 1997, Wisconsin and Illinois experienced electric supply
shortages due to outages of a number of nuclear plants in
Illinois and Wisconsin, including Kewaunee. The electric
reliability crisis caused the PSCW to revise its previous plans
for restructuring the electric industry. In October 1997, the
PSCW stated that retail competition cannot occur until all the
safeguards are in place to protect consumers. Also, prior to any
significant restructuring, reliability concerns must be
addressed. This conclusion was consistent with plans proposed by
the Company and a broad coalition of customers. 

<PAGE>
The new plan focuses on the construction of a generation and
transmission infrastructure by all Wisconsin utilities to
increase the amount of power in the state and the state s ability
to obtain electricity from other regions. The PSCW plans to
remove any barriers to open access to the transmission system
that currently exist and to move forward in its efforts to
develop a strong state and regional Independent System Operator
(ISO). This would assure that the transmission system is operated
safely, reliably, and with open and nondiscriminatory access.
Also in its revised plan, the PSCW plans to explore new ways to
promote the development of renewable energy sources. The Company
is in the process of building a $14 million wind generation
project which will allow its customers to purchase blocks of
energy produced with renewable resources. The PSCW has not set a
date for retail competition and has concluded that any decision
to go to retail competition in the electric industry remains to
be made in the future. The Company cannot predict what impact
future PSCW actions may have on its future financial condition,
cash flows, or results of operations. However, the Company
believes it is well-positioned to compete in a deregulated
market.

The restructuring of the electric industry could affect the
eligibility of the Company to continue applying Statement of
Financial Accounting Standard (SFAS) No. 71, "Accounting for the
Effects of Certain Types of Regulation." Under this situation,
continued deferral of certain regulatory asset and liability
amounts on the Company's books may no longer be appropriate as
allowed under SFAS No. 71. The Company is unable to predict
whether any adjustments to regulatory assets and liabilities will
occur in the future. The PSCW's restructuring plan specifically
recognizes the need to allow recovery for commitments made under
prior regulatory regimes.

The Company's recent rate order authorized a gas cost recovery
mechanism that allows recovery of pipeline capacity, Federal
Energy Regulatory Commission (FERC)-approved/mandated charges,
and supply demand costs. Under the new mechanism, gas commodity
costs will be compared to a monthly benchmark equal to the first-
of-the-month index plus adders reflecting the effects on pricing
for reliability, flexibility, weather, and variable
transportation costs. If actual costs are below the benchmark,
full recovery is allowed. Gas commodity costs above the benchmark
will be reviewed by the PSCW. A target will also be determined
for capacity release. Capacity release above the target will be
shared 60 percent with the ratepayers and 40 percent with the
shareholders. Any shortfalls in capacity release will be shared
40 percent with the ratepayers and 60 percent with the
shareholders.

<PAGE>
Electric Reliability Act

On April 28, 1998, Governor Tommy Thompson signed into law 1997
Wisconsin Act 204 (the Act) - the Electric Reliability Plan. The
Act seeks to guarantee the reliable provision of electricity in
Wisconsin for future generations. It received widespread support
from consumer groups, legislators, and utilities.

Among the many provisions included in the Act are those
streamlining the regulatory process. For instance, the Act
requires the PSCW to prepare a strategic energy assessment, and
calls for expediting the PSCW and the Department of Natural
Resources deadlines to grant certificates of public convenience
and necessity needed to construct electric generating facilities
and transmission lines. The Act also calls for utilities to
voluntarily hand over control of their transmission facilities to
an Independent System Operator (ISO) approved by the Federal
Regulatory Commission by the year 2000.

The Act also includes the following:

-  Allowing the construction of "merchant" power plants that
   would sell their power to utilities. A merchant plant is built
   without prior commitments to buy the power it will produce.

-  Requires a total of 50 megawatts of new generation to come
   from renewable power sources, such as wind or solar.

-  Directs the PSCW to conduct a study of constraints in the
   intrastate and interstate transmission system that hurt the 
   reliability of electric service in Wisconsin. The PSCW must
   report the results to the state legislature by September 1,
   1998.

<PAGE>
RESULTS OF OPERATIONS

Electric Sales and Revenues

Electric retail sales decreased slightly during the three-month
period ending March 31, 1998, over the comparable period last
year (see table below).

                                  Three Months Ended March 31,
                                  ----------------------------

Electric Sales (megawatt-hours)   1998      1997     % Change
                                 -------   -------   --------

Residential  . . . . . . . .     185,793   188,905    (1.6)%
Large commercial and             
industrial . . . . . . . . .     245,297   230,809     6.3
Small commercial and             
industrial . . . . . . . . .     169,971   172,841    (1.7)
Other  . . . . . . . . . . .      75,053    87,070   (13.8)
                                 -------   -------
  Total Retail . . . . . . .     676,114   679,625    (0.5)
Resale . . . . . . . . . . .      26,969     5,584       *
                                 -------   -------
  Total Sales  . . . . . . .     703,083   685,209     2.6
                                 =======   =======
*Over 100 percent

The decrease in retail sales was due, in part, to the mild winter
experienced during this year's first quarter compared to last
year's first quarter. Electric operating revenues for the same
period increased approximately $1.0 million, or 2.6 percent. The
increase in electric operating revenues was primarily the result
of a 3.1 percent electric rate increase which became effective in
August 1997.

<PAGE>
Gas Sales and Revenues

The decrease in gas delivered was due to the extremely warm
weather experienced in the first quarter of this year (see table
below). The average temperature for the three months ended
March 31, 1998, was 30.6 degrees Fahrenheit as compared to
24.9 degrees Fahrenheit for the same three months ended last
year, or 22.9 percent warmer than last year s first quarter.

                              Three Months Ended March 31,
                              ----------------------------

Gas Deliveries                 1998      1997     %Change
(thousands of therms)         ------    -----     -------

Residential  . . . . . . . .  35,506    40,961    (13.3)%
Commercial and industrial  .  29,296    36,399    (19.5)
                              ------    ------
  Total Retail . . . . . . .  64,802    77,360    (16.2)
Transport  . . . . . . . . .  11,277     9,342     20.7
                              ------    ------
  Total Gas Deliveries . . .  76,079    86,702    (12.3)
                              ======    ======

For the three months ended March 31, 1998, gas revenues decreased
$10.8 million, or 22.7 percent, compared to last year. This is
mainly attributable to the decrease in gas deliveries for the
same time period. Retail gas deliveries decreased 16.2 percent
for the three months ended March 31, 1998, compared to the same
period last year because of the extremely mild weather. 

Electric Fuel and Natural Gas Costs

Fuel cost for electric generation and purchased power costs
decreased $3.3 million, or 27.7 percent, for the first three
months of 1998 when compared to the same period last year. The
Company's electric margin (revenues less fuel and purchased power
costs) increased $4.2 million, or 16.6 percent, for the first
quarter of 1998 compared to last year's first quarter. The
primary factor for the increased electric margin is lower
purchased power costs. During the first quarter of 1997, the
Company had increased amounts of replacement power costs due to
the extended outage of Kewaunee. The Company was granted a customer
surcharge by the PSCW, in March 1997, to help offset these higher 
costs.

<PAGE>
Natural gas costs for the three months ended March 31, 1998,
versus the 1997 comparative period decreased $10.4 million, or
31.3 percent. This is mainly due to the decrease in retail gas
deliveries of 16.2 percent, as previously mentioned. Another
contributing factor to the decrease in natural gas costs during
the first quarter of 1998, compared to last year, was the
decrease in the cost per therm of $0.08, or 18.0 percent.

Other Operating Expenses

Income taxes increased 12.4 percent for the first three months of
1998 when compared to the same time period in 1997. This was
mainly attributable to an increase in pretax operating income.

Depreciation and amortization expense increased $1.9 million,
or 29.8 percent, for the three months ended March 31, 1998,
compared to the same time period a year ago. This increase is
due to the accelerated depreciation and decommission funding
of Kewaunee. The PSCW approved accelerated depreciation and
decommission funding for Kewaunee based on its service life
ending at the end of 2002.

<PAGE>
PART II. OTHER INFORMATION

ITEM 5  OTHER INFORMATION

Kewaunee Nuclear Power Plant

Kewaunee is operated by Wisconsin Public Service Corporation
(WPSC). The Company has a 17.8 percent ownership interest in
Kewaunee. Kewaunee is operating with a license that expires in
2013.

On April 7, 1998, the PSCW approved WPSC's application for
replacement of the two steam generators at Kewaunee. The total
cost of replacing the steam generators would be approximately
$90.7 million (the Company's share would be 17.8 percent or
$16.1 million). The replacement work is tentatively planned
for the spring of 2000 and will take approximately 60 days.

However, issues related to the continued operation and future
ownership of Kewaunee must be resolved before the steam
generator replacement plan proceeds. The owners of Kewaunee
have differing views on the desirability of proceeding with
the steam generator replacement project. The Company has not
favored replacement. The co-owners are continuing to discuss
resolution of the issues.

Kewaunee has been in operation since 1974 and is jointly owned
by the Company, WPSC, and Wisconsin Power and Light Company.

Background information regarding Kewaunee steam generator
repair issues is set forth in the registrant's Annual Report
on Form 10-K for the year ended December 31, 1997. 

ITEM 6(a) EXHIBITS

Exhibit 4

Indenture of Mortgage and Deed of Trust between the Company and
Firstar Trust Company, as Trustee (and supplements) reference was
provided in the Company's 1997 Annual Report on Form 10-K
(Commission File No. 0-1125).

Exhibit 12

Ratio of Earnings to Fixed Charges

Exhibit 27

Appendix E to Item 601(c) of Regulation S-K: Public Utility
Companies Financial Data Schedule UT.

        Exhibit                      Page
       ----------                    ----
       Exhibit 4                      NA
       Exhibit 12                     17
       Exhibit 27                     18

ITEM 6(b) REPORTS ON FORM 8-K

No reports on 8-K were filed during the quarter for which this
report is filed. 
<PAGE>
SIGNATURES

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



                       MADISON GAS AND ELECTRIC COMPANY
                       (Registrant)


Date:  May 14, 1998    David C. Mebane
                       Chairman, President and Chief
                       Executive Officer
                       (Duly Authorized Officer)



Date:  May 14, 1998    Terry A. Hanson
                       Vice President - Finance
                       (Chief Financial and Accounting
                       Officer)