<PAGE>

               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 September 30, 1996

                               OR

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


                  Commission File Number 0-5464


             (LOGO)  MASSACHUSETTS ELECTRIC COMPANY


       (Exact name of registrant as specified in charter)


        MASSACHUSETTS               04-1988940
        (State or other             (I.R.S. Employer
        jurisdiction of             Identification No.)
        incorporation or
        organization)


      25 Research Drive, Westborough, Massachusetts   01582
            (Address of principal executive offices)

       Registrant's telephone number, including area code
                         (508-389-2000)

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 ( )

Common stock, par value $25 per share, authorized and
outstanding:  2,398,111 shares at September 30, 1996.
<PAGE>
PART I FINANCIAL STATEMENTS
Item 1. Financial Statements
----------------------------
<TABLE>
                          MASSACHUSETTS ELECTRIC COMPANY
                               Statements of Income
                            Periods Ended September 30
                                   (Unaudited)
<CAPTION>
                                                 Quarter                  Nine Months
                                                 -------                  -----------
                                            1996      1995      1996       1995
                                            ----      ----      ----       ----
                                                          (In Thousands)
<S>                                          <C>       <C>       <C>        <C>
Operating revenue                      $398,542   $392,575 $1,147,840 $1,121,098
                                       --------   -------- ---------- ----------

Operating expenses:
  Purchased electric energy, principally from
   New England Power Company, an affiliate         301,664    296,745    851,057   851,343
  Other operation                        53,253     56,092    152,855    147,530
  Maintenance                             7,790      7,373     23,087     22,313
  Depreciation                           12,037     11,464     36,112     34,394
  Taxes, other than income taxes          7,372      7,043     23,855     22,533
  Income taxes                            2,888      2,059     12,866      6,664
                                       --------   -------- ---------- ----------
       Total operating expenses         385,004    380,776  1,099,832  1,084,777
                                       --------   -------- ---------- ----------
       Operating income                  13,538     11,799     48,008     36,321

Other income (expense), net                (439)        58     (2,516)      (759)
                                       --------   -------- ---------- ----------
       Operating and other income        13,099     11,857     45,492     35,562
                                       --------   -------- ---------- ----------

Interest:
  Interest on long-term debt              6,735      6,651     20,196     19,232
  Other interest                          1,783      1,774      4,989      5,396
  Allowance for borrowed funds used during
   construction - credit                   (193)      (221)      (657)      (412)
                                       --------   -------- ---------- ----------
       Total interest                     8,325      8,204     24,528     24,216
                                       --------   -------- ---------- ----------

       Net income                      $  4,774   $  3,653 $   20,964 $   11,346
                                       ========   ======== ========== ==========


                         Statements of Retained Earnings

Retained earnings at beginning of period          $154,150   $134,654 $  150,308$  136,911
Net income                                4,774      3,653     20,964     11,346
Dividends declared on cumulative
  preferred stock                          (778)      (778)    (2,335)    (2,335)
Dividends declared on common stock       (1,199)    (2,998)   (11,990)   (11,391)
                                       --------   -------- ---------- ----------
Retained earnings at end of period     $156,947   $134,531 $  156,947 $  134,531
                                       ========   ======== ========== ==========

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

   Per share data is not relevant because the Company's common stock is wholly
                      owned by New England Electric System.
</TABLE>
<PAGE>
<TABLE>             MASSACHUSETTS ELECTRIC COMPANY
                         Statements of Income
                   Twelve Months Ended September 30
                              (Unaudited)
<CAPTION>
                                                     1996                  1995
                                                     ----                  ----
                                                        (In Thousands)
<S>                                                   <C>                    <C>
Operating revenue                                    $1,532,418  $1,504,988
                                                     ----------  ----------

Operating expenses:
  Purchased electric energy, principally from
   New England Power Company, an affiliate            1,113,387   1,106,982
  Other operation                                       211,985     217,551
  Maintenance                                            30,299      33,695
  Depreciation                                           46,547      44,694
  Taxes, other than income taxes                         31,344      28,200
  Income taxes                                           25,499      17,175
                                                     ----------  ----------
       Total operating expenses                       1,459,061   1,448,297
                                                     ----------  ----------

       Operating income                                  73,357      56,691

Other income (expense), net                              (2,298)         31
                                                     ----------  ----------

       Operating and other income                        71,059      56,722
                                                     ----------  ----------

Interest:
  Interest on long-term debt                             26,865      24,699
  Other interest                                          6,377       5,709
  Allowance for borrowed funds used during
   construction - credit                                   (902)       (540)
                                                     ----------  ----------
       Total interest                                    32,340      29,868
                                                     ----------  ----------

       Net income                                    $   38,719  $   26,854
                                                     ==========  ==========



                    Statements of Retained Earnings


Retained earnings at beginning of period             $  134,531  $  135,372
Net income                                               38,719      26,854
Dividends declared on cumulative preferred stock         (3,114)     (3,114)
Dividends declared on common stock                      (13,189)    (24,581)
                                                     ----------  ----------
Retained earnings at end of period                   $  156,947  $  134,531
                                                     ==========  ==========

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

Per share data is not relevant because the Company's common stock is wholly
                 owned by New England Electric System.
</TABLE>
<PAGE>
<TABLE>
                      MASSACHUSETTS ELECTRIC COMPANY
                              Balance Sheets
                                (Unaudited)
<CAPTION>
                                                    September 30,                December 31,
                                  ASSETS               1996           1995
                                  ------               ----           ----
                                                           (In Thousands)
<S>                                                     <C>           <C>
Utility plant, at original cost                        $1,486,299   $1,420,069
 Less accumulated provisions for depreciation             424,115      399,711
                                                       ----------   ----------
                                                        1,062,184    1,020,358
Construction work in progress                              17,897       21,118
                                                       ----------   ----------
     Net utility plant                                  1,080,081    1,041,476
                                                       ----------   ----------
Current assets:
 Cash                                                       1,525        1,840
 Accounts receivable:
   From sales of electric energy                          152,363      160,795
   Other (including $1,693,000 and $1,776,000 from affiliates)           2,804     3,527
     Less reserves for doubtful accounts                   13,722       12,544
                                                       ----------   ----------
                                                          141,445      151,778
 Unbilled revenues                                         42,500       49,800
 Materials and supplies, at average cost                    8,929       10,602
 Prepaid and other current assets                          22,968       22,514
                                                       ----------   ----------
     Total current assets                                 217,367      236,534
                                                       ----------   ----------
Deferred charges and other assets                          60,519       65,090
                                                       ----------   ----------
                                                       $1,357,967   $1,343,100
                                                       ==========   ==========

                      CAPITALIZATION AND LIABILITIES
                      ------------------------------
Capitalization:
 Common stock, par value $25 per share, authorized
   and outstanding 2,398,111 shares                    $   59,953   $   59,953
 Premiums on capital stocks                                45,862       45,862
 Other paid-in capital                                    155,309      155,310
 Retained earnings                                        156,947      150,308
                                                       ----------   ----------
     Total common equity                                  418,071      411,433
 Cumulative preferred stock                                50,000       50,000
 Long-term debt                                           323,401      353,267
                                                       ----------   ----------
     Total capitalization                                 791,472      814,700
                                                       ----------   ----------
Current liabilities:
 Long-term debt due within one year                        30,000             
 Short-term debt (including $7,300,000 and $1,000,000
   to affiliates)                                          24,100       55,450
 Accounts payable (including $192,946,000 and $165,515,000
   to affiliates)                                         197,646      181,943
 Accrued liabilities: 
   Taxes                                                    9,592        7,371
   Interest                                                 6,983        9,502
   Other accrued expenses                                  53,320       17,136
 Customer deposits                                          4,378        4,633
 Dividends payable                                          1,978        1,977
                                                       ----------   ----------
     Total current liabilities                            327,997      278,012
                                                       ----------   ----------
Deferred federal and state income taxes                   173,936      184,575
Unamortized investment tax credits                         16,846       17,684
Other reserves and deferred credits                        47,716       48,129
                                                       ----------   ----------
                                                       $1,357,967   $1,343,100
                                                       ==========   ==========

The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
                      MASSACHUSETTS ELECTRIC COMPANY
                         Statements of Cash Flows
                      Nine Months Ended September 30
                                (Unaudited)
<CAPTION>                                                 1996        1995
                                                         ----          ----
                                                             (In Thousands)
<S>                                                                        <C>       <C>
Operating Activities:
   Net income                                            $ 20,964     $ 11,346
   Adjustments to reconcile net income to net cash
     provided by operating activities:
   Depreciation                                            36,112       34,394
   Deferred income taxes and investment tax credit, net   (11,458)         910
   Allowance for borrowed funds used during construction     (657)        (412)
   Decrease (increase) in accounts receivable, net
    and unbilled revenues                                  17,633       20,439
   Decrease (increase) in materials and supplies            1,673          586
   Decrease (increase) in prepaid and other current assets   (454)         648
   Increase (decrease) in accounts payable                 15,703       (3,233)
   Increase (decrease) in other current liabilities        35,631        4,040
   Other, net                                               4,516        2,323
                                                         --------     --------
      Net cash provided by operating activities          $119,663     $ 71,041
                                                         --------     --------

Investing Activities:
   Plant expenditures, excluding allowance for
     funds used during construction                      $(74,091)    $(66,562)
   Other investing activities                                (211)      (1,415)
                                                         --------     --------
      Net cash used in investing activities              $(74,302)    $(67,977)
                                                         --------     --------
Financing Activities:
   Capital contributions from parent                                  $ 10,000
   Dividends paid on common stock                        $(11,991)     (21,583)
   Dividends paid on preferred stock                       (2,335)      (2,335)
   Long-term debt-issues                                                88,000
   Long-term debt-retirements                                          (35,000)
   Changes in short-term debt                             (31,350)     (40,170)
                                                         --------     --------
      Net cash used in financing activities              $(45,676)    $ (1,088)
                                                         --------     --------

Net increase (decrease) in cash and cash equivalents     $   (315)    $  1,976

Cash and cash equivalents at beginning of period            1,840        1,225
                                                         --------     --------
Cash and cash equivalents at end of period               $  1,525     $  3,201
                                                         ========     ========


The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Note A - Hazardous Waste
------------------------

    The Federal Comprehensive Environmental Response, Compensation
and Liability Act, more commonly known as the "Superfund" law,
imposes strict, joint and several liability, regardless of fault,
for remediation of property contaminated with hazardous substances. 
A number of states, including Massachusetts, have enacted similar
laws.

    The electric utility industry typically utilizes and/or
generates in its operations a range of potentially hazardous
products and by-products.  New England Electric System subsidiaries
currently have in place an internal  environmental audit program
and an external waste disposal vendor audit and qualification
program intended to enhance compliance with existing federal,
state, and local requirements regarding the handling of potentially
hazardous products and by-products.

    The Company has been named as a potentially responsible party
(PRP) by either the U.S. Environmental Protection Agency or the
Massachusetts Department of Environmental Protection for 19 sites
at which hazardous waste is alleged to have been disposed.  Private
parties have also contacted or initiated legal proceedings against
the Company regarding hazardous waste cleanup. The most prevalent
types of hazardous waste sites with which the Company has been
associated are manufactured gas locations. The Company is aware of
approximately 35 such locations in Massachusetts (including eight
of the 19 locations for which the Company is a PRP). The Company is
currently aware of other sites, and may in the future become aware
of additional sites, that it may be held responsible for
remediating.

    In 1993, the Massachusetts Department of Public Utilities 
approved a rate agreement filed by the Company that allows for
remediation costs of former manufactured gas sites and certain
other hazardous waste sites located in Massachusetts to be met from
a non-rate-recoverable, interest-bearing fund of $30 million
established on the Company's books in 1993.  Rate-recoverable
contributions of $3 million, adjusted for inflation, are added to
the fund annually in accordance with the agreement. Any shortfalls
in the fund would be paid by the Company and be recovered through
rates over seven years.

    Predicting the potential costs to investigate and remediate
hazardous waste sites continues to be difficult. There are also
significant uncertainties as to the portion, if any, of the
investigation and remediation costs of any particular hazardous
waste site that may ultimately be borne by the Company. Where
appropriate, the Company intends to seek recovery from its insurers
<PAGE>
Note A - Hazardous Waste - Continued
------------------------

and from other PRPs, but it is uncertain whether, and to what
extent, such efforts will be successful.  At September 30, 1996,
the Company had total reserves for environmental response costs of
$39 million and a related regulatory asset of $16 million.  The
Company believes that hazardous waste liabilities for all sites of
which it is aware, and which are not covered by a rate agreement,
are not material to its financial position.


Note B
------

    In the opinion of the Company, these statements reflect all
adjustments (which include normal recurring adjustments) necessary
for a fair statement of the results of its operations for the
periods presented and should be considered in conjunction with the
notes to the financial statements in the Company's 1995 Annual
Report.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
       ---------------------------------------------------------
        Condition and Results of Operations
        -----------------------------------
         This section contains management's assessment of Massachusetts
       Electric Company's financial condition and the principal factors
       having an impact on the results of operations.  This discussion
       should be read in conjunction with the Company's financial
       statements and footnotes and the 1995 Annual Report on Form 10-K.
       This section contains forward-looking statements as defined under
       the securities laws.  Actual results could differ materially from
       those projected.  This section, particularly under "Competitive
       Conditions - Risk Factors", lists some of the reasons why results
       could differ materially from those projected.
       
       Earnings
       --------
         Net income for the third quarter and first nine months of 1996
       increased $1.1 million and $9.6 million, respectively, compared
       with the corresponding periods in 1995.  The increases are
       primarily due to an October 1995 rate increase.  Kilowatt-hour
       (kWh) sales to ultimate customers also increased 1.8 percent in the
       nine-month period which reflects an improving economy, despite a
       decrease in third quarter kWh sales of 2.0 percent due to a cooler
       summer in 1996.  These increases in income were partially offset by
       increased other operation and maintenance costs.
       
       
       Competitive Conditions
       ----------------------
         The electric utility business is being subjected to rapidly
       increasing competitive pressures, stemming from a combination of
       trends, including the presence of surplus generating capacity, a
       disparity in electric rates among regions of the country,
       improvements in generation efficiency, increasing demand for
       customer choice, and new regulations and legislation intended to
       foster competition.  See the Company's Annual Report on Form 10-K
       for the year ended December 31, 1995.
       
         In states across the country, including Massachusetts, there
       have been an increasing number of proposals to allow retail
       customers to choose their electricity supplier, with incumbent
       utilities required to deliver that electricity over their
       transmission and distribution systems (also known as "retail
       wheeling").  In these competitive circumstances, utilities across
       the country that operate generation plants, such as New England
              <PAGE>
Power Company (NEP), the Company's affiliated wholesale power
       supplier, face the risk that market prices may not be sufficient to
       recover the costs of the commitments incurred to supply customers
       under a regulated industry structure.  The amount by which costs
       exceed market prices is commonly referred to as "stranded costs".
       
       Massachusetts Settlement Agreement
       
         In May 1996, the Massachusetts Department of Public Utilities
       (MDPU) issued a set of proposed rules and regulations governing the
       implementation of retail choice in Massachusetts.  The proposed
       rules would allow all customers of Massachusetts investor-owned
       utilities to choose their electricity supplier beginning in 1998
       and would establish a price cap system for regulating the rates for
       distribution service that would continue to be provided by local
       utilities.  The MDPU proposed rules affirm the principle of
       stranded cost recovery for utilities over ten years, but create
       uncertainties concerning the extent of actual stranded cost
       recovery.  While the MDPU did not order mandatory divestiture of
       generating assets, it stated that it might provide utilities
       financial incentives to divest.  The MDPU has stated that it will
       issue final regulations by year-end 1996 and issue orders on 
       individual utility plans in 1997.
       
         On October 1, 1996, the Company and NEP, together with the
       Massachusetts Attorney General, the Massachusetts Division of
       Energy Resources and other parties, filed a comprehensive
       settlement agreement with the MDPU.  The settlement agreement
       provides for the commencement of retail choice on January 1, 1998
       (contingent on choice being available to the customers of all
       Massachusetts investor-owned utilities), full compensation for
       potential stranded costs, and the full divestiture of the NEES
       companies' fossil and hydroelectric generating business.  Under the
       settlement agreement, customers who do not choose an alternative
       supplier would receive "Standard Offer" service, which would be
       priced to guarantee customers at least a 10 percent savings in 1998
       from current electricity prices, therefore resulting in revenue
       losses for the Company.
       
         Under the settlement agreement, NEP's wholesale contract with
       the Company would be terminated.  In return, the cost of NEP's past
       generation commitments to serve the Company's customers (estimated
       at approximately $3 billion) would be recovered through a
       transition access charge on retail distribution rates.  Those
       commitments consist of (i) generating plant commitments, (ii)
       regulatory assets, (iii) the above-market component of purchased
       power contracts, and (iv) the operating cost of nuclear plants
       which cannot be mitigated by shutting down the plants, including
       nuclear decommissioning.
              <PAGE>
   Sunk costs associated with generating plants and regulatory
       assets would be recovered over a period of 12 years.  The above-
       market component of purchased power contracts and nuclear
       decommissioning costs would be recovered as incurred over the
       life of those obligations, a period expected to extend beyond 12
       years.  The transaction access charge would be reduced to reflect
       the net proceeds from the sale of the NEES companies' generating
       assets.  The initial transition access charge, before the
       application of those proceeds, would be set at 2.8 cents per kWh
       through December 31, 2000, and is expected to decline thereafter.
       
         The settlement agreement also establishes performance-based
       rates for the Company.  Under the plan, the Company's non-fuel
       rates would be frozen at current levels until the commencement of
       retail choice.  Upon commencement of retail choice, the Company
       would receive an approximately $45 million increase in its
       distribution rates, with such rates then frozen through the year
       2000.  The Company's return on equity would be subject to a floor
       of 6 percent and a ceiling of 11 percent, effective upon
       commencement of retail choice.  Earnings over the ceiling would
       be shared equally between customers and shareholders up to an
       absolute cap of 12.5 percent.  To the extent that earnings fall
       below the floor, the Company would be authorized to surcharge
       customers for the shortfall.  In addition, the settlement
       agreement provides for  changes to the distribution cost of
       service that become effective on the retail access date.  These
       changes include: an $11 million increase in annual depreciation
       expense, a $3 million annual contribution to a storm fund, and
       increased amortization of unfunded deferred income taxes of $1
       million over six years.
       
         The settlement agreement, when approved, would also eliminate
       the Company's purchased power cost adjustment mechanism (PPCA) as
       of July 31, 1996.  This mechanism allows the Company to recover
       purchased power rate changes from NEP and the effects of NEP's
       seasonal rates.  The agreement also stipulates that the Company's
       $18 million PPCA refund liability balance at July 31, 1996 will
       be used to create a $3 million storm contingency fund with the
       remainder being used to offset regulatory assets for hazardous
       waste costs.
       
         The MDPU, with the agreement of the parties, has set a
       procedural schedule under which it will issue a decision on the
       settlement agreement by January 10, 1997.  The settlement
       agreement is also subject to approval by the Federal Energy
       Regulatory Commission (FERC). Additional governmental approvals
       would be required for the divestiture of the generating business. 
       In addition, the implementation of retail choice in Massachusetts
       may be the subject of legislation from the Massachusetts
       legislature.
              <PAGE>
FERC Order
       
         In April 1996, the FERC issued Order No. 888 addressing open
       access transmission and required those utilities that own
       transmission facilities to file open access tariffs to make
       available transmission service to affiliates and nonaffiliates at
       fair non-discriminatory rates.  Order No. 888 also stated that
       public utilities will be allowed to seek recovery of legitimate
       and verifiable stranded costs from departing customers as a
       result of wholesale competition.  The FERC indicated that it will
       provide for the recovery of retail stranded costs only if state
       regulators lack the legal authority to address those costs at the
       time retail wheeling is required.  The FERC also stated that it
       would permit  stranded cost recovery under wholesale requirements
       contracts, such as the contracts between NEP and its retail
       affiliates.  
       
       Accounting Implications
       
         Historically, electric utility rates have been based on a
       utility's costs.  As a result, electric utilities are subject to
       certain accounting standards that are not applicable to other
       business enterprises in general.  Financial Accounting Standards
       No. 71, Accounting for the Effects of Certain Types of Regulation
       (FAS 71), requires regulated entities, in appropriate
       circumstances, to establish regulatory assets and liabilities,
       and thereby defer the income statement impact of certain costs
       that are expected to be recovered in future rates.  The Company
       believes that, if approved by regulators, the Massachusetts
       settlement agreement would meet the criteria for continued
       application of FAS 71.  As a result, no write-off of existing
       regulatory assets is expected.
       
       Risk Factors
       
         For a discussion of risk factors in the event that the
       Massachusetts settlement agreement is not approved, see "Risk
       Factors" in the Company's Form 10-Q for the quarter ended June
       30, 1996.
              <PAGE>
Operating Revenue
       -----------------
       
         The following table summarizes the changes in operating
        revenue:
       <TABLE>
       Increase (Decrease) in Operating Revenue
       <CAPTION>
                    Third Quarter    Nine Months
                    -------------    ------------
                          1996 vs 1995    1996 vs 1995
                    -------------    ------------
                            (In Millions)
       <S>                                <C>            <C>
       Sales to ultimate customers                       $(6)           $ 9
       Rate changes                        8              23
       Fuel recovery                       7               3
       Rate adjustment mechanisms          1              (5)
       Demand side management (DSM)
                                  program recovery                       (6)            (6)
       Other                               2               3
                                                         ---            ---
                                                         $ 6            $27
                                                         ===            ===
       </TABLE>
       
          For a discussion of sales to ultimate customers, see the
       "Earnings" section.
       
          The increase in revenues due to rate changes is the result of
       a $31 million base rate increase effective in October 1995.
       
          Rate adjustment mechanisms are designed to allow the Company
       to pass on to its customers changes in purchased energy costs
       resulting from rate increases or decreases by NEP.  The
       mechanisms are also designed to pass on to customers the effects
       of NEP's seasonal rates which lowered purchased power expense
       during the nine-month period.  The passback to customers of the
       impact is reflected as a reduction in revenues for the first nine
       months of 1996 under rate adjustment mechanisms.  For a
       discussion of the effects of the settlement agreement on the
       Company's rate adjustment mechanisms, see the "Competitive
       Conditions" section.
              <PAGE>
Operating Expenses
       ------------------
           The following table summarizes the changes in operating
       expenses which are discussed below:
       <TABLE>
       <CAPTION>
       Increase (Decrease) in Operating Expenses
       
                    Third Quarter    Nine Months
                         -------------    ------------
                          1996 vs 1995    1996 vs 1995
                    -------------    ------------
                            (In Millions)
       <S>                                 <C>             <C>
       Purchased electric energy:
                                  Fuel costs            $ 7            $ 3
                                  Other                  (2)            (3)
       Other operation and maintenance:                    
                                  DSM                    (6)            (6)
                                  Other                   4             12
       Depreciation and amortization                      -              2
       Taxes                               1              7
                                                                       ---            ---
                                         $ 4            $15
                                         ===            ===
       </TABLE>
       
          The increase in other operation and maintenance expense in the
       third quarter and first nine months of 1996 reflects increased
       customer service expenses, increased distribution system-related
       expenses, increased uncollectible accounts expense, and increased
       postretirement benefit costs due to the inclusion of additional
       amounts in rates that were previously deferred.
       
          The change in taxes is primarily due to increased income.
       
       
       Utility Plant Expenditures and Financings
       -----------------------------------------
          Cash expenditures for utility plant totaled $74 million in the
       first nine months of 1996.  The funds necessary for utility plant
       expenditures during the period were provided by net cash from
       operating activities, after the payment of dividends.  The Company
       did not issue any long-term debt during the first nine months of
       1996.  The Company plans to issue $20 million of long-term debt
              <PAGE>
later in 1996.  In July 1996, Nantucket Electric Company
       (Nantucket), a retail affiliate of the Company, issued $28 million
       of tax-exempt long-term debt at rates ranging from 4.10 percent to
       6.75 percent to fund construction of an undersea cable.  The
       Company guaranteed the debt on behalf of Nantucket.
       
          At September 30, 1996, the Company had $24 million of short-
       term debt outstanding including $17 million of commercial paper
       borrowings.  The Company currently has lines of credit with banks
       totaling $90 million.  These lines of credit are available to
       provide liquidity support for commercial paper borrowings and other
       corporate purposes.  There were no borrowings under these lines of
       credit at September 30, 1996.
       
          For the twelve-month period ending September 30, 1996, the ratio
       of earnings to fixed charges was 2.90.
              <PAGE>
       
            PART II.  OTHER INFORMATION
       
       
       Item 1.  Legal Proceedings
       --------------------------
       
        Information concerning the restructuring dockets before the
       Massachusetts Department of Public Utilities, discussed in Part I
       of this report in Management's Discussion and Analysis of Financial
       Condition and Results of Operations, is incorporated herein by
       reference and made a part hereof.
       
       
       Item 6.  Exhibits and Reports on Form 8-K
       -----------------------------------------
       
        The Company is filing the following revised exhibit for
       incorporation by reference into its registration statement on Form
       S-3, Commission File No. 33-59145.
       
        12   Statement re computation of ratios
       
        The Company is filing Financial Data Schedules. 
       
             The Company filed reports on Form 8-K dated September 12, 1996
       and October 1, 1996, each containing Item 5, Other Events.
              <PAGE>
                     SIGNATURE
       
          Pursuant to the requirements of the Securities Exchange Act of
       1934, the registrant has duly caused this report on Form 10-Q for
       the quarter ended September 30, 1996 to be signed on its behalf by
       the undersigned thereunto duly authorized.
       
                                          MASSACHUSETTS ELECTRIC COMPANY
       
       
                                          s/Michael E. Jesanis
       
                                                                        
                                          Michael E. Jesanis, Treasurer,
                                          Authorized Officer, and 
                                          Principal Financial Officer
       
       Date:  November 8, 1996