<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 June 30, 1997

                               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 June 30, 1997.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
----------------------------
<TABLE>
                          MASSACHUSETTS ELECTRIC COMPANY
                               Statements of Income
                              Periods Ended June 30
                                   (Unaudited)
<CAPTION>
                                                 Quarter                 Six Months
                                                --------                 ----------
                                            1997      1996      1997       1996
                                            ----      ----      ----       ----
                                                          (In Thousands)
<S>                                          <C>       <C>       <C>        <C>
Operating revenue                         $369,542  $358,479  $775,060   $749,298
                                          --------  --------  --------   --------

Operating expenses:
  Purchased electric energy, principally from
   New England Power Company, an affiliate 264,492   262,008   559,692    549,393
  Other operation                           49,534    52,404    98,080     99,602
  Maintenance                                8,880     7,241    16,304     15,297
  Depreciation                              12,438    12,038    25,076     24,075
  Taxes, other than income taxes             8,041     7,738    16,914     16,483
  Income taxes                               6,460     3,267    15,056      9,978
                                          --------  --------  --------   --------
       Total operating expenses            349,845   344,696   731,122    714,828
                                          --------  --------  --------   --------
       Operating income                     19,697    13,783    43,938     34,470

Other income (expense), net                   (211)      (40)   (2,107)    (2,077)
                                          --------  --------  --------   --------
       Operating and other income           19,486    13,743    41,831     32,393
                                          --------  --------  --------   --------

Interest:
  Interest on long-term debt                 7,004     6,736    14,087     13,461
  Other interest                             2,229     1,819     3,971      3,206
  Allowance for borrowed funds used during
   construction - credit                      (100)     (268)     (216)      (464)
                                          --------  --------  --------   --------
       Total interest                        9,133     8,287    17,842     16,203
                                          --------  --------  --------   --------

       Net income                         $ 10,353  $  5,456  $ 23,989   $ 16,190
                                          ========  ========  ========   ========



                         Statements of Retained Earnings


Retained earnings at beginning of period  $166,803  $150,671  $165,936   $150,308
Net income                                  10,353     5,456    23,989     16,190
Dividends declared on cumulative
  preferred stock                             (779)     (778)   (1,557)    (1,557)
Dividends declared on common stock          (4,796)   (1,199)  (16,787)   (10,791)
                                          --------  --------  --------   --------
Retained earnings at end of period        $171,581  $154,150  $171,581   $154,150
                                          ========  ========  ========   ========

    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 June 30
                              (Unaudited)
<CAPTION>
                                                    1997               1996
                                                    ----               ----
                                                          (In Thousands)
<S>                                                  <C>                <C>
Operating revenue                                     $1,564,299 $1,526,451
                                                      ---------- ----------

Operating expenses:
    Purchased electric energy, principally from
     New England Power Company, an affiliate           1,131,008  1,108,468
    Other operation                                      210,141    214,824
    Maintenance                                           32,109     29,882
    Depreciation                                          48,358     45,974
    Taxes, other than income taxes                        30,990     31,015
    Income taxes                                          30,264     24,670
                                                      ---------- ----------
         Total operating expenses                      1,482,870  1,454,833
                                                      ---------- ----------
         Operating income                                 81,429     71,618

Other income (expense), net                               (1,243)    (1,801)
                                                      ---------- ----------
         Operating and other income                       80,186     69,817
                                                      ---------- ----------

Interest:
    Interest on long-term debt                            27,715     26,781
    Other interest                                         7,238      6,368
    Allowance for borrowed funds used during
     construction - credit                                  (492)      (930)
                                                      ---------- ----------
         Total interest                                   34,461     32,219
                                                      ---------- ----------

         Net income                                   $   45,725 $   37,598
                                                      ========== ==========



                    Statements of Retained Earnings


Retained earnings at beginning of period              $  154,150 $  134,654
Net income                                                45,725     37,598
Dividends declared on cumulative preferred stock          (3,114)    (3,114)
Dividends declared on common stock                       (25,180)   (14,988)
                                                      ---------- ----------
Retained earnings at end of period                    $  171,581 $  154,150
                                                      ========== ==========

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>
                                                         June 30,                  December 31,
                                    ASSETS                 1997         1996
                                    ------                 ----         ----
                                                             (In Thousands)
<S>                                                        <C>          <C>
Utility plant, at original cost                        $1,536,422   $1,509,896
   Less accumulated provisions for depreciation           446,458      430,585
                                                       ----------   ----------
                                                        1,089,964    1,079,311
Construction work in progress                              17,608        9,119
                                                       ----------   ----------
     Net utility plant                                  1,107,572    1,088,430
                                                       ----------   ----------
Current assets:
   Cash                                                     1,163        2,356
   Accounts receivable: 
     From sales of electric energy                        145,463      165,866
     Other (including $2,323,000 and $1,605,000
       from affiliates)                                     3,076        2,600
       Less reserves for doubtful accounts                 14,539       13,146
                                                       ----------   ----------
                                                          134,000      155,320
   Unbilled revenues                                       46,284       43,390
   Materials and supplies, at average cost                  9,031        8,820
   Prepaid and other current assets                        26,471       25,923
                                                       ----------   ----------
       Total current assets                               216,949      235,809
                                                       ----------   ----------
Deferred charges and other assets                          51,047       66,019
                                                       ----------   ----------
                                                       $1,375,568   $1,390,258
                                                       ==========   ==========

                        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                                  155,310      155,310
   Retained earnings                                      171,581      165,936
                                                       ----------   ----------
       Total common equity                                432,706      427,061
   Cumulative preferred stock                              50,000       50,000
   Long-term debt                                         333,415      343,321
                                                       ----------   ----------
       Total capitalization                               816,121      820,382
                                                       ----------   ----------
Current liabilities:
   Long-term debt due in one year                          25,000       30,000
   Short-term debt (including $5,700,000 and $5,275,000
     to affiliates)                                        30,125       43,775
   Accounts payable (including $164,905,000 and $157,603,000
     to affiliates)                                       174,802      178,263
   Accrued liabilities:
     Taxes                                                  5,323          961
     Interest                                               9,154        9,635
     Other accrued expenses                                75,004       54,833
   Customer deposits                                        4,413        4,308
   Dividends payable                                        5,575        7,973
                                                       ----------    ---------
       Total current liabilities                          329,396      329,748
                                                       ----------   ----------
Deferred federal and state income taxes                   170,592      177,778
Unamortized investment tax credits                         16,015       16,566
Other reserves and deferred credits                        43,444       45,784
                                                       ----------   ----------
                                                       $1,375,568   $1,390,258
                                                       ==========   ==========
  The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>                 MASSACHUSETTS ELECTRIC COMPANY
                           Statements of Cash Flows
                           Six Months Ended June 30
                                  (Unaudited)
<CAPTION>                                                   1997         1996
                                                           ----         ----
                                                             (In Thousands)
<S>                                                           <C                     <C>
Operating Activities:
     Net income                                          $ 23,989     $ 16,190
     Adjustments to reconcile net income to net cash
       provided by operating activities:
     Depreciation                                          25,076       24,075
     Deferred income taxes and investment tax credits, net (7,710)     (11,234)
     Allowance for funds used during construction            (216)        (464)
     Decrease (increase) in accounts receivable, net
       and unbilled revenues                               18,426       13,766
     Decrease (increase) in materials and supplies           (211)        (276)
     Decrease (increase) in prepaid and other current assets (548)      (1,657)
     Increase (decrease) in accounts payable               (3,461)     (19,377)
     Increase (decrease) in other current liabilities      24,157       41,178
     Other, net                                            13,036        3,726
                                                         --------     --------
        Net cash provided by operating activities        $ 92,538     $ 65,927
                                                         --------     --------
Investing Activities:
     Plant expenditures, excluding allowance for
       funds used during construction                    $(44,007)    $(47,425)
     Other investing activities                              (332)        (197)
                                                         --------     --------
        Net cash used in investing activities            $(44,339)    $(47,622)
                                                         --------     --------
Financing Activities:
     Dividends paid on common stock                      $(19,185)    $(10,791)
     Dividends paid on preferred stock                     (1,557)      (1,557)
     Changes in short-term debt                           (13,650)      (6,800)
     Long-term debt - retirements                         (15,000)
                                                         --------     --------
        Net cash provided by (used in) financing activities           $(49,392)           $(19,148)
                                                         --------     --------

Net decrease in cash and cash equivalents                $ (1,193)              $   (843)

Cash and cash equivalents at beginning of period            2,356        1,840
                                                         --------     --------
Cash and cash equivalents at end of period               $  1,163     $    997
                                                         ========     ========

  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.  Massachusetts Electric Company (the
Company) is a wholly-owned retail subsidiary of New England
Electric System (NEES).  NEES subsidiaries have an internal
environmental audit program and an external waste disposal vendor
audit and qualification program intended to enhance compliance with
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 United States 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 manufactured gas locations in
Massachusetts (including eight of the 19 locations for which the
Company is a PRP).  The Company is currently aware of other
possible hazardous waste 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 settlement agreement regarding the rate recovery of
remediation costs of former manufactured gas sites and certain
other hazardous waste sites located in Massachusetts.  Under that
agreement, qualified costs related to these sites are paid out of
a special fund established on the Company's books.  The Company
made an initial $30 million contribution to the fund.  Rate-
recoverable contributions of $3 million, adjusted since 1993 for
inflation, are added annually to the fund along with interest and
any recoveries from insurance carriers and other third parties.  At
June 30, 1997, the fund had a balance of $28 million.  If a 
Massachusetts restructuring and rate settlement is approved by the 
Federal Energy Regulatory Commission, an additional $15 million
will be transferred to the fund in 1997 out of existing reserves
for refunds.
<PAGE>
Note A - Hazardous Waste - Continued
------------------------

    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.  The NEES
companies have received recovery amounts from certain insurers,
and, where appropriate, the Company intends to seek recovery from
other insurers and from other PRPs, but it is uncertain whether,
and to what extent, such efforts will be successful.  At June 30,
1997, the Company had total reserves for environmental response
costs of $37 million and a related regulatory asset of less than $1
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.

    In October 1996, the American Institute of Certified Public
Accountants issued new accounting rules for Environmental
Remediation Liabilities which become effective in 1997.  These new
rules do not have a material effect on the Company's financial
position or results of operations.

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 1996 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 (the Company) (a wholly-owned retail subsidiary
of New England Electric System (NEES)) 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 1996 Annual Report on
Form 10-K.

Earnings
--------

    Net income for the second quarter and first six months of 1997
increased $5 million and $8 million, respectively, compared with
the corresponding periods in 1996.  These increases are due to an
increase in kilowatt-hour (kWh) deliveries to ultimate customers,
and the effects of the Company's purchased power cost adjustment
(PPCA) mechanism (see discussion in the "Operating Revenues"
section).  KWh deliveries to ultimate customers increased 2.7
percent and 1.1 percent in the second quarter and first six months
of 1997, respectively.  This year the weather was warmer in the
second quarter but milder in the first quarter compared to last
year.

Industry Restructuring
----------------------

    For a full discussion of industry restructuring activities in
Massachusetts, Rhode Island and New Hampshire, see "Industry
Restructuring" in the Company's Form 10-K for 1996.

Industry Restructuring Update

     As previously reported, the Massachusetts settlement covering
customer choice and electric utility industry restructuring
provides for full recovery of the costs of generating assets and
oil and gas related assets (including regulatory assets) not
recoverable through the divestiture of New England Power Company's
(NEP) (a wholly-owned wholesale subsidiary of NEES) generating
business.  The Massachusetts settlement was approved by the
Massachusetts Department of Public Utilities (MDPU) and a companion
wholesale settlement is now pending final approval before the
Federal Energy Regulatory Commission (FERC).  FERC action is
expected later in 1997.

     The NEES companies have reached an agreement with all three of
its unions regarding benefits and other assistance including early
<PAGE>
retirement and severance programs, to union employees that are
affected by the restructuring of the electric utility industry and
the NEES companies divestiture of its generation business.  The
NEES companies have also announced similar early retirement and
severance programs for management employees.  The NEES companies
anticipate that industry restructuring and divestiture will lead to
workforce reductions.  The expected cost of such programs will be
substantially recovered from the proceeds of the sale of the
generating business.

     On May 20, 1997, the Utility Workers Union of America and the
Massachusetts Alliance of Utility Unions withdrew their appeal to
the Massachusetts Supreme Judicial Court of the MDPU approval of
the Massachusetts settlement.  Several bills are pending before the
Massachusetts legislature on electric utility industry
restructuring, including comprehensive legislation introduced by
former Governor William F. Weld and by the legislature's Joint
Committee on Electric Restructuring.  These bills cover many of the
topics addressed in the settlement and could impact the
implementation of the settlement.

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.  Statement of 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 thereby defer
the income statement impact of certain costs expected to be
recovered in future rates.  At December 31, 1996 the Company had 
approximately $16 million in net regulatory assets (regulatory
assets of $56 million offset by regulatory liabilities of $40
million) in compliance with FAS 71.  The Company believes that the
continuing rate-making policies and practices of the MDPU and the
terms of the Massachusetts settlement will enable the Company to
recover both its specific costs of providing ongoing distribution
services and stranded costs billed to it by NEP.  The Company
believes that these factors will allow it to continue to apply FAS
71.   In the event that future circumstances should cause the
application of FAS 71 to be discontinued, a noncash write-off of
previously established regulatory assets would be required.

Year 2000 Computer Issues
-------------------------

     In the next two-and-one-half years, most large companies will
face a potentially serious information systems (computer) problem
because most software application and operational programs written
in the past will not properly recognize calendar dates beginning in
<PAGE>
the year 2000.  This could force computers to either shut down or
lead to incorrect calculations.  The NEES companies began the
process of identifying the changes required to their computer
programs and hardware during 1996.  The necessary modifications to
the NEES companies' centralized financial, customer, and
operational information systems are expected to be completed by the
end of 1998.  The NEES companies believe they will incur
approximately $20 million of costs between now and January 1, 2000,
associated with making the necessary modifications identified to
date to the centralized systems.  Noncentralized systems are
currently being reviewed for Year 2000 problems.  The NEES
companies are unable to predict the costs to be incurred for
correction of such noncentralized systems, but expect the scope and
schedule for such work to be less complex than for its centralized
information systems.

Operating Revenue
-----------------

     The following table summarizes the changes in operating
revenue:

             Increase (Decrease) in Operating Revenue
<TABLE>
<CAPTION>
                                   Second Quarter   Six Months
                                   --------------  ------------
                                   1997 vs 1996    1997 vs 1996
                                   --------------  ------------
                                          (In Millions)
<S>                                              <C>             <C>
Deliveries to ultimate customers                 $ 5             $ 3
PPCA                                               6               8
Fuel recovery                                      2              15
Demand-Side Management (DSM)                      (2)             (1)
Other                                              -               1
                                                 ---             ---
                                                 $11             $26
                                                 ===             ===
</TABLE>
    For a discussion of deliveries to ultimate customers, see the
"Earnings" section.

    The PPCA mechanism is 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 mechanism is also designed
to pass on to customers the effects of NEP's seasonal rates.  Due
to reduced peak demand levels, primarily in the month of May 1997,
refunds recorded under this mechanism were less in 1997 than in
1996.  The provisions of the Company's restructuring settlement

<PAGE>
would have caused the PPCA mechanism to end effective July 31,
1996.  However, since the Massachusetts settlement has not yet been
approved by the FERC, the Company has continued to accrue refund
provisions of $19 million related to the assumed operation of the
PPCA mechanism since July 31, 1996 ($9 million in 1996 and $10
million in 1997, to date).  In addition, at December 31, 1996 the
Company had deferred approximately $8 million of storm damage
costs.  In accordance with the Massachusetts restructuring
settlement signed in 1997, the Company will not be permitted
recovery of approximately $2 million of such storm damage costs. 

    The increase in fuel recovery revenues is due to increased 
replacement power fuel purchases by NEP due to reduced generation
by partially owned nuclear units.  These costs are passed on to the
Company through NEP's fuel clause.  The Company, in turn, passes
these costs on to its customers.

Operating Expenses
------------------

    The following table summarizes the changes in operating
expenses which are discussed below:
<TABLE>
<CAPTION>
            Increase (Decrease) in Operating Expenses
                           Second Quarter    Six Months
                           --------------   ------------
                            1997 vs 1996    1997 vs 1996
                           --------------   ------------
                                   (In Millions)
<S>                                              <C>            <C>
Purchased electric energy:
 Fuel costs                                     $ 2             $15
 Other                                            -              (5)
Other operation and maintenance:                   
 DSM                                             (2)             (1)
 Other                                            1               -
Depreciation                                      1               1
Taxes                                             3               6
                                                ---             ---
                                                $ 5             $16
                                                ===             ===
</TABLE>
   For a discussion of increased fuel costs, refer to the
"Operating Revenues" section.

   The decrease in other purchased electric energy is principally
due to a reduction in peak demand charges, reflecting milder
weather in the first quarter of 1997.
<PAGE>
Utility Plant Expenditures and Financing
----------------------------------------

   Cash expenditures for utility plant totaled $44 million in the
first six months of 1997.  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
plans to issue $50 million of long-term debt in 1997, of which $30
million will be used to retire maturing bonds, and the balance used
to fund capital expenditures.

   At June 30, 1997, the Company had $30 million of short-term
debt outstanding including $24 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 June 30, 1997.

   For the twelve-month period ending June 30, 1997, the ratio of
earnings to fixed charges was 3.12.
<PAGE>
                   PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings
--------------------------

     Information concerning the restructuring dockets before the 
Federal Energy Regulatory Commission, 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 a report on Form 8-K dated July 14, 1997
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 June 30, 1997 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: July 31, 1997