FORM 10-Q
                                 
                           UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C.  20549

  (Mark One)


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

           For the Quarterly Period Ended June 30, 1998

                                OR

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

                  Commission File Number 2-26983


              THE PEOPLES GAS LIGHT AND COKE COMPANY
      (Exact name of registrant as specified in its charter)


                       Illinois            36-1613900
       (State or other jurisdiction of    (IRS Employer
       incorporation or organization)     Identification No.)


24th Floor, 130 East Randolph Drive, Chicago, Illinois 60601-6207
 (Address of principal executive offices)              (Zip Code)


                          (312) 240-4000
       (Registrant's telephone number, including area code)


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 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 [  ]


Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
24,817,566 shares of Common Stock, without par value, outstanding
at July 31, 1998.

<TABLE>

                                         PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements
<CAPTION>
                                     The Peoples Gas Light and Coke Company
                                       CONSOLIDATED STATEMENTS OF INCOME
                                                  (Unaudited)

                                     Three Months Ended     Nine Months Ended      Twelve Months Ended
                                          June 30,               June 30,                 June 30,
                                       1998       1997       1998        1997        1998         1997
                                                         (Thousands, except per-share amounts)
<S>                                 <C>        <C>        <C>        <C>          <C>        <C>
OPERATING REVENUES:
Gas sales                           $ 132,175  $ 150,871  $ 707,032  $   885,068  $ 786,281  $   981,703
Transportation                         21,319     22,254     92,257      105,403    105,630      121,719
Other                                   3,870      4,183     13,443       12,663     17,170       16,108
     Total Operating Revenues         157,364    177,308    812,732    1,003,134    909,081    1,119,530

OPERATING EXPENSES:
Gas costs                              53,633     62,419    355,849      495,488    379,696      533,827
Operation                              39,171     38,904    125,634      129,006    168,960      169,820
Maintenance                            10,816     12,093     29,645       32,083     42,255       44,301
Depreciation and amortization          17,042     16,659     50,543       49,563     67,055       65,615
Taxes     - Income                      1,308      5,806     45,951       56,713     35,849       50,594
          - State and local revenue    13,205     18,596     83,337      106,195     92,572      117,248
          - Other                       7,091      4,685     19,178       13,975     24,243       18,985
     Total Operating Expenses         142,266    159,162    710,137      883,023    810,630    1,000,390

OPERATING INCOME                       15,098     18,146    102,595      120,111     98,451      119,140

OTHER INCOME
  AND (DEDUCTIONS):
Interest income                           579        974        905        2,978      2,080        3,683
Allowance for funds used
  during construction                     436         82      1,030          144      1,153          157
Interest on long-term debt             (7,785)    (7,773)   (23,347)     (23,321)   (31,120)     (31,099)
Other interest expense                   (424)      (333)    (2,184)      (1,681)    (2,699)      (2,195)
Income taxes                              (62)      (389)      (131)      (1,186)      (602)      (2,300)
Miscellaneous - net                      (483)      (313)      (685)        (213)      (814)       1,876
     Total Other Income
       and Deductions                  (7,739)    (7,752)   (24,412)     (23,279)   (32,002)     (29,878)

NET INCOME APPLICABLE
  TO COMMON STOCK                   $   7,359  $  10,394  $  78,183  $    96,832  $  66,449  $    89,262


The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>

<TABLE>


                              The Peoples Gas Light and Coke Company

                                   CONSOLIDATED BALANCE SHEETS


                                                           June 30,                  June 30,
                                                             1998     September 30,    1997
                                                          (Unaudited)     1997      (Unaudited)
                                                                     (Thousands of Dollars)
<S>                                                       <C>          <C>          <C>
PROPERTIES AND OTHER ASSETS

CAPITAL INVESTMENTS:
Property, plant and equipment, at original cost           $ 1,855,982  $ 1,819,567  $ 1,795,178
Less - Accumulated depreciation                               645,337      614,224      605,626
Net property, plant and equipment                           1,210,645    1,205,343    1,189,552
Other investments                                               5,229        5,470        5,499
     Total Capital Investments - Net                        1,215,874    1,210,813    1,195,051

CURRENT ASSETS:
Cash and cash equivalents                                      19,003       18,509       70,293
Temporary cash investments                                     25,100       15,500       15,500
Receivables -
  Customers, net of allowance for uncollectible accounts
    of $23,584, $28,959, and $31,406, respectively             77,090       67,330      117,881
  Other                                                        37,549       40,159       32,552
Accrued unbilled revenues                                      19,021       20,109       18,402
Materials and supplies, at average cost                        13,388       13,225       13,313
Gas in storage, at last-in, first-out cost                     53,188       67,536       42,269
Gas costs recoverable through rate adjustments                  3,054        3,328            -
Regulatory assets                                               5,887       13,139       20,310
Prepayments                                                    63,449       39,802       34,125
     Total Current Assets                                     316,729      298,637      364,645

OTHER ASSETS:
Non-current regulatory assets                                  29,338       32,473       32,866
Deferred charges                                               21,540       15,704       15,508
     Total Other Assets                                        50,878       48,177       48,374

     Total Properties and Other Assets                    $ 1,583,481  $ 1,557,627  $ 1,608,070

The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>

<TABLE>

                               The Peoples Gas Light and Coke Company

                                     CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                              June 30,                 June 30,
                                                                1998    September 30,    1997
                                                             (Unaudited)     1997     (Unaudited)
                                                                     (Thousands of Dollars)
<S>                                                        <C>          <C>          <C>
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
Common Stockholder's Equity:
Common stock, without par value -
   Authorized - 40,000,000 shares
   Outstanding - 24,817,566 shares                         $   165,307  $   165,307  $   165,307
Retained earnings                                              439,947      409,662      455,007
     Total Common Stockholder's Equity                         605,254      574,969      620,314

Long-term debt, exclusive of sinking fund
  payments and maturities due within one year                  462,400      462,400      462,400
     Total Capitalization                                    1,067,654    1,037,369    1,082,714

CURRENT LIABILITIES:
Interim loans                                                      700          700            -
Accounts payable                                               109,235      113,502      107,799
Dividends payable on common stock                               15,635       32,015       13,650
Customer gas service and credit deposits                        24,487       39,753       17,663
Accrued taxes                                                   42,347       19,056       57,526
Gas sales revenue refundable through rate adjustments            5,888       14,484       14,310
Accrued interest                                                 6,523        8,763        6,505
Temporary LIFO liquidation credit                                2,624            -       21,659
     Total Current Liabilities                                 207,439      228,273      239,112

DEFERRED CREDITS AND OTHER LIABILITIES:

Deferred income taxes - primarily accelerated depreciation     245,173      229,225      224,155
Investment tax credits being amortized over
   the average lives of related property                        29,307       30,350       30,632
Other                                                           33,908       32,410       31,457
     Total Deferred Credits and Other Liabilities              308,388      291,985      286,244

     Total Capitalization and Liabilities                  $ 1,583,481  $ 1,557,627  $ 1,608,070

The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>

                  The Peoples Gas Light and Coke Company
	           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                                                         Nine Months Ended
                                                               June 30,
                                                           1998       1997
                                                       (Thousands of Dollars)
Operating Activities:
Net Income                                               $ 78,183  $ 96,832
Adjustments to reconcile net income to net cash:
  Depreciation and amortization                            50,543    49,563
  Deferred income taxes and investment tax credits - net   13,570     8,713
  Change in other deferred credits and other liabilities    2,833     4,712
  Change in deferred charges                               (6,911)    1,098
  Change in current assets and liabilities:
    Receivables - net                                      (7,150)  (55,236)
    Accrued unbilled revenues                               1,088     7,132
    Materials and supplies                                   (163)      704
    Gas in storage                                         14,348    13,607
    Gas costs recoverable                                     274    17,421
    Regulatory assets                                       7,252    14,433
    Prepayments                                           (23,647)  (22,228)
    Accounts payable                                       (4,267)  (13,853)
    Customer gas service and credit deposits              (15,266)  (19,458)
    Accrued taxes                                          23,291    26,283
    Gas sales revenue refundable                           (8,596)    3,576
    Accrued interest                                       (2,240)   (2,253)
    Temporary LIFO liquidation credit                       2,624    21,659

     Net Cash Provided by Operating Activities            125,766   152,705

Investing Activities:
Capital expenditures - construction                       (51,858)  (44,174)
Other assets                                                  223      (319)
Other capital investments                                     241       448
Other temporary cash investments                           (9,600)  (15,000)

     Net Cash Used in Investing Activities                (60,994)  (59,045)

Financing Activities:
Dividends paid on common stock                            (64,278)  (40,204)
Interim Loans                                                   -      (700)

     Net Cash Used in Financing Activities                (64,278)  (40,904)

Net Increase in Cash and Cash Equivalents                     494    52,756
Cash and Cash Equivalents at Beginning of Period           18,509    17,537

Cash and Cash Equivalents at End of Period               $ 19,003  $ 70,293

The Notes to Consolidated Financial Statements are an integral part of 
these statements.




                                     
                                     
                                     
              The Peoples Gas Light and Coke Company
                                 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Unaudited)

1.  BASIS OF PRESENTATION

   The accompanying consolidated financial statements have been
prepared by The Peoples Gas Light and Coke Company (Company) in
conformity with the rules and regulations of the Securities and
Exchange Commission (SEC) and reflect all adjustments that are, in
the opinion of management, necessary to present fairly the results
for the interim periods herein and to prevent the information from
being misleading.

   Certain footnote disclosures and other information, normally
included in financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or
omitted from these interim financial statements, pursuant to SEC
rules and regulations.  Therefore, the statements should be read in
conjunction with the consolidated financial statements and related
notes contained in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1997.  Certain items previously
reported for the prior periods have been reclassified to conform
with the presentation in the current periods.

   The business of the Company is influenced by seasonal weather
conditions because a large element of the Company's customer load
consists of gas used for space heating.  Weather-related deliveries
can, therefore, have a significant positive or negative impact on
net income.  Accordingly, the results of operations for the interim
periods presented are not indicative of the results to be expected
for all or any part of the balance of the current fiscal year.

2.  SIGNIFICANT ACCOUNTING POLICIES

2A     Use of Estimates

  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.

2B     Revenue Recognition

  Gas sales revenues are recorded on the accrual basis for all gas
delivered during the month, including an estimate for gas delivered
but unbilled at the end of each month.

2C     Regulated Operations

  The Company's utility operations are subject to regulation by the
Illinois Commerce Commission (Commission).  Regulated operations
are accounted for in accordance with Statement of Financial
Accounting Standards (SFAS) No. 71, "Accounting for the Effects of
Certain Types of Regulation."  This standard controls the
application of generally accepted accounting principles for
companies whose rates are determined by an independent regulator
such as the Commission.  Regulatory assets represent certain costs
that are expected to be recovered from customers through the
ratemaking process.  When incurred, such costs are deferred as
assets in the balance sheet and subsequently recorded as expenses
when those same amounts are reflected in rates.

2D     Income Taxes

   The Company follows the liability method of accounting for
deferred income taxes.  Under the liability method, deferred income
taxes have been recorded using currently enacted tax rates for the
differences between the tax basis of assets and liabilities and the
basis reported in the financial statements.  Due to the effects of
regulation on the Company, certain adjustments made to deferred
income taxes are, in turn, debited or credited to regulatory assets
or liabilities.

2E     Statement of Cash Flows

   For purposes of the balance sheet and the statement of cash
flows, the Company considers all short-term liquid investments with
maturities of three months or less to be cash equivalents.

Income taxes and interest paid (excluding capitalized
   interest) were as follows:

        For the nine months
        ended June 30,             1998      1997
                                         (Thousands)
         Income taxes paid       $11,935   $31,078
         Interest paid            25,961    26,452

2F   Recovery of Gas Costs

   Under the tariffs of the Company, the difference for any month
between costs recoverable through the Gas Charge and revenues
billed to customers under the Gas Charge is refunded to or
recovered from customers.  Consistent with these tariff provisions,
such difference for any month is recorded either as a current
liability or as a current asset (with a contra entry to Gas Costs).

   For each gas utility, the Commission conducts annual proceedings
regarding the reconciliation of revenues from the Gas Charge and
related costs incurred for gas.  In such proceedings, costs
recovered by a utility through the Gas Charge are subject to
challenge.  Such a proceeding regarding the Company for fiscal year
1997 is currently pending before the Commission.

2G Accounting Standard

The Company adopted Statement of Position (SOP) 96-1,
"Environmental Remediation Liabilities" in the first quarter of
fiscal 1998. The application of the statement did not have a
material effect on the Company's financial condition or results of
operations.


3.  ENVIRONMENTAL MATTERS

   The Company, its predecessors, and certain former affiliates
operated facilities in the past at multiple sites for the purpose
of manufacturing gas and storing manufactured gas (Manufactured Gas
Sites).  In connection with manufacturing and storing gas, various
by-products and waste materials were produced, some of which might
have been disposed of rather than sold.  Under certain laws and
regulations relating to the protection of the environment, the
Company might be required to undertake remedial action with respect
to some of these materials.  Two of the Manufactured Gas Sites are
discussed in more detail below.  The Company, under the supervision
of the Illinois Environmental Protection Agency (IEPA), is
conducting investigations of an additional 27 Manufactured Gas
Sites.  These investigations may require the Company to perform
additional investigation and remediation.  The investigations are
in a preliminary stage and are expected to occur over an extended
period of time.


   The Company has observed what appear to be gas purification
wastes on a Manufactured Gas Site in Chicago, formerly called the
110th Street Station, and property contiguous thereto (110th Street
Station Site).  The Company has fenced the 110th Street Station
Site and is conducting a study under the supervision of the IEPA to
determine the feasibility of a limited removal action.

   The current owner of a site in Chicago, formerly called Pitney
Court Station, filed suit against the Company in federal district
court under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.  The suit seeks recovery of
the past and future costs of investigating and remediating the site
and an order directing the Company to remediate the site.  The
Company is contesting this suit.

   The Company is accruing and deferring the costs it incurs in
connection with all of the Manufactured Gas Sites, including
related legal expenses, pending recovery through rates or from
insurance carriers or other entities.  At June 30, 1998, the total
of the costs deferred by the Company, net of recoveries and amounts
billed to other entities, was $10.7 million.  This amount includes
an estimate of the costs of the investigations being conducted
under the supervision of the IEPA referred to above.  The amount
also includes an estimate of the costs of remediation at the 110th
Street Station Site, at the minimum amount of the current estimated
range of such costs.  The costs of remediation at the other sites
cannot be determined at this time.  While the Company intends to
seek contribution from other entities for the costs incurred at the
sites, the full extent of such contributions cannot be determined
at this time.

   The Company has filed suit against a number of insurance
carriers for the recovery of environmental costs relating to its
former manufactured gas operations.  The suit asks the court to
declare that the insurers are liable under policies in effect
between 1937 and 1986 for costs incurred or to be incurred by the
Company in connection with three Manufactured Gas Sites in Chicago.
The Company is also asking the court to award damages stemming from
the insurers' breach of their contractual obligation to defend and
indemnify the Company against these costs.  At this time,
management cannot determine the timing and extent of the Company's
recovery of costs from its insurance carriers.  Accordingly, the
costs deferred at June 30, 1998 have not been reduced to reflect
recoveries from insurance carriers.

   Costs incurred by the Company for environmental activities
relating to former manufactured gas operations will be recovered
from insurance carriers or other entities or through rates for
utility service.  Accordingly, management believes that the costs
incurred by the Company in connection with former manufactured gas
operations will not have a material adverse effect on the financial
position or results of operations of the Company.  The Company is
recovering the costs of environmental activities relating to its
former manufactured gas operations, including carrying charges on
the unrecovered balances, under a rate mechanism approved by the
Commission.  At June 30, 1998, it had recovered $6.5 million of
such costs through rates.

4.  LONG-TERM DEBT

Interest-Rate Adjustments

   The rate of interest on the City of  Joliet 1984 Series C Bonds,
which are secured by the Company's Adjustable-Rate First Mortgage
Bonds, Series W, is subject to adjustment annually on October 1.
Owners of the Series C Bonds have the right to tender such bonds at
par during a limited period prior to that date.  The Company is
obligated to purchase any such bonds tendered if they cannot be
remarketed.  All Series C Bonds that were tendered prior to October
1, 1997, have been remarketed.  The interest rate on such bonds is
3.875 percent for the period October 1, 1997, through September 30,
1998.

   The rate of interest on the City of Chicago 1993 Series B Bonds,
which are secured by the Company's Adjustable-Rate First Mortgage
Bonds, Series EE, is subject to adjustment annually on December 1.
Owners of the Series B Bonds have the right to tender such bonds at
par during a limited period prior to that date.  The Company is
obligated to purchase any such bonds tendered if they cannot be
remarketed.  All Series B Bonds that were tendered prior to
December 1, 1997, have been remarketed.  The interest rate on such
bonds is 3.90 percent for the period December 1, 1997, through
November 30, 1998.

   The Company classifies these adjustable-rate bonds as long-term
liabilities, since it would refinance them on a long-term basis if
they could not be remarketed.  In order to ensure its ability to do
so, on February 1, 1994, the Company established a $37.4 million
three year line of credit with The Northern Trust Company, which
has since been extended to January 31, 2000.

Item 2.  Management's Discussion and Analysis of Results of
Operations and Financial Condition

RESULTS OF OPERATIONS

Net Income

   Net income applicable to common stock decreased $3.0 million, to
$7.4 million, for the three-month period ended June 30, 1998, due
primarily to weather that was 39 percent warmer than in the
comparable quarter last year.  Increases in outside professional
services and depreciation and amortization expenses also
contributed to the decline.  Partially offsetting these effects
were decreases in the provision for uncollectible accounts and an
adjustment to taxes accrued.

        Net income applicable to common stock decreased $18.6
million, to $78.2 million, and $22.8 million, to $66.4 million, for
the nine- and 12-month periods ended June 30, 1998, respectively,
reflecting weather that was 18 percent warmer in both comparable
periods.  Also contributing to the declines were increases in
outside professional services. A one-time gain associated with the
expiration of natural gas storage contracts in the prior period
also affected the 12-month comparison.  For both periods, the
decline in earnings was partially offset by decreased operation and
maintenance expenses.

<TABLE>

   A summary of variations affecting income between periods is
presented below, with explanations of significant differences
following:
<CAPTION>

 
                                        Three Months Ended   Nine Months Ended      12 Months Ended
                                           June 30, 1998       June 30, 1998         June 30, 1998
                                        Increase/(Decrease) Increase/(Decrease)   Increase/(Decrease)
                                         From Prior Period   From Prior Period     From Prior Period
(Thousands of dollars)                   Amount        %      Amount        %       Amount        %
<S>                                     <C>          <C>     <C>          <C>     <C>           <C>
Net operating revenues (a)              $(5,767)     (6.0)   $(27,905)    (7.0)   $(31,642)     (6.8)
Operation and maintenance expenses       (1,010)     (2.0)     (5,810)    (3.6)     (2,906)     (1.4)
Depreciation and amortization expense       383       2.3         980      2.0       1,440       2.2
Other taxes                               2,406      51.4       5,203     37.2       5,258      27.7
Income taxes                             (4,498)    (77.5)    (10,782)   (19.0)    (14,745)    (29.1)
Other income and deductions                 (13)     (0.2)      1,133      4.9       2,124       7.1
Net income applicable to common stock    (3,035)    (29.2)    (18,649)   (19.3)    (22,813)    (25.6)
                                   
(a) Operating revenues, net of gas costs and revenue taxes.
</TABLE>

Net Operating Revenues

   Gross revenues of the Company are affected by changes in the
unit cost of the Company's gas purchases and do not include the
cost of gas supplies for customers who purchase gas directly from
producers and marketers rather than from the Company.  The direct
customer purchases have no effect on net income because the Company
provides transportation service for such gas volumes and recovers
margins similar to those applicable to conventional gas sales.
Changes in the unit cost of gas do not significantly affect net
income because the Company's tariffs provide for dollar-for-dollar
recovery of gas costs.  (See Note 2F of the Notes to Consolidated
Financial Statements.)  The Company's tariffs also provide for
dollar-for-dollar recovery of the cost of revenue taxes imposed by
the State and City.

   Since income is not significantly affected by changes in
revenue from customers' gas purchases from producers or marketers
rather than from the Company, changes in gas costs, or changes in
revenue taxes, the discussion below pertains to "net operating
revenues" (operating revenues, net of gas costs and revenue
taxes).  The Company considers net operating revenues to be a
more pertinent measure of operating results than gross revenues.

   Net operating revenues declined $5.8 million, to $90.5
million, for the current three-month period due primarily to the
effect of El Nino which caused weather to be 39 percent warmer
than during the same period a year-ago.

   Net operating revenues declined $27.9 million, to $373.5
million, and $31.6 million, to $436.8 million, for the current
nine- and 12-month periods, respectively, due primarily to
weather that was 18 percent warmer, in both periods, than during
comparable periods a year-ago.

   See Other Matters - Operating Statistics for details of
selected financial and operating information by gas service
classification.

Operation and Maintenance Expenses

   Operation and maintenance expenses decreased $1.0 million, to
$50.0 million, for the current three-month period, due primarily
to a $494,000 decrease in the provision for uncollectible
accounts, caused by reduced revenues, and to reduced group
insurance expenses ($417,000).  In addition, costs associated
with operating and maintaining the Company's distribution system
decreased by $383,000, along with reductions in pension expense
($341,000), reengineering costs ($242,000), and other non-labor
operation and maintenance expenses.  These reductions were
offset, in part, by higher labor costs of $675,000, and by an
increase in the cost of outside professional services of $2.1
million.  The cost of outside professional services has 
increased primarily due to the use of contract programmers to
maintain existing systems while the Company's staff is involved 
in the development and implementation of a new customer
information system.

   Operation and maintenance expenses decreased $5.8 million, to
$155.3 million, and $2.9 million, to $211.2 million, for the
current nine- and 12-month periods, respectively, due mainly to
$4.8 million and $5.3 million decreases in the provision for
uncollectible accounts and to $1.6 million and $1.8 million
decreases in environmental costs recovered through rates,
respectively.  Also contributing to the positive variations were
reduced group insurance expenses of $1.4 million and $2.2
million, and decreased costs associated with operating and
maintaining the Company's distribution systems of $969,000 and
$990,000, respectively.  These effects were offset, in part, by
increases in costs of outside professional services ($3.5 million
and $5.8 million, respectively), a prior period adjustment to
costs associated with claim settlements of $1.3 million and $1.0
million, respectively, and increases in labor costs of $367,000
and $1.9 million, respectively.

Depreciation and Amortization Expense

   Depreciation and amortization expense increased $383,000, to
$17.0 million, $980,000, to $50.5 million, and $1.4 million, to
$67.1 million, for the current three-, nine- and 12-month
periods, respectively, due mainly to net property additions.

Other Taxes

   Other taxes increased $2.4 million, to $7.1 million, $5.2 
million, to $19.2 million, and $5.3 million, to $24.2 million, 
for the current three-, nine- and 12-month periods, respectively, 
due primarily to the new Supplemental Low Income Energy Assistance
Charge.  Since this charge was collected from customers, it had
no impact on net income.

Income Taxes

   Income taxes, exclusive of taxes in other income and
deductions, decreased $4.5 million, to $1.3 million, $10.8
million, to $46.0 million, and $14.7 million, to $35.8 million,
for the current three-, nine- and 12-month periods, respectively,
due primarily to lower pre-tax income and a current period
adjustment to reduce taxes accrued.  Partially offsetting these
effects in the nine- and 12-month comparative periods was a prior
period adjustment to reduce income tax accruals.

Other Income and Deductions

   Other income and deductions increased $1.1 million for the
current nine-month period due chiefly to a decrease in
miscellaneous interest revenues, higher interest expense and a
loss on disposition of property.  Partially offsetting these
effects was an increase in the allowance for funds used during
construction.

   Other income and deductions increased $2.1 million for the
current 12-month period due primarily to the prior period's gain
of $1.3 million, net of income taxes, associated with the
expiration of natural gas storage contracts.  Also contributing
to the variation between periods was a decrease in miscellaneous
interest revenues, higher interest expense and a loss on
disposition of property.  These effects were offset, in part, by
an increase in the allowance for funds used during construction.

Other Matters

Effect of Weather.  Weather variations affect the volumes of gas
delivered for heating purposes and, therefore, can have a
significant positive or negative impact on net income, cash
position, and coverage ratios.

Accounting Standard.  In fiscal 1998, the Company adopted SOP 96-
1, "Environmental Remediation Liabilities".  (See Note 2G of the
Notes to Consolidated Financial Statements.)

Large Volume Gas Service Agreements.  The Company has entered
into gas service contracts with certain large volume customers
under a specific rate schedule approved by the Commission.  These
contracts were negotiated to overcome the potential threat of
bypassing the utility's distribution system.  The impact on the
net income of the Company as a result of these contracts is not
material.

Small-Volume Transportation Service.  On June 25, 1997, the
Commission allowed Riders SVT and AGG to go into effect for the
Company, thus initiating a two year pilot program designed to
provide transportation service to certain small-volume industrial
and commercial customers of the utility as well as to some of its
large residential customers.  The Commission also ordered a
concurrent investigation of the program to ascertain if program
adjustments or revisions are required.

<TABLE>
Operating Statistics.  
The following table represents gas distribution margin components:
<CAPTION>

                              Three Months Ended     Nine Months Ended     Twelve Months Ended
                                   June 30,               June 30,              June 30,
                                1998       1997       1998        1997       1998        1997
<S>                          <C>        <C>        <C>        <C>         <C>        <C>
Operating Revenues (Thousands):
 Gas sales
  Residential                $ 115,636  $ 127,380  $ 603,487  $  744,366  $ 671,350  $  826,819
  Commercial                    13,966     19,639     87,325     117,280     97,524     129,753
  Industrial                     2,573      3,852     16,220      23,422     17,407      25,131
                               132,175    150,871    707,032     885,068    786,281     981,703

 Transportation
  Residential                    6,491      6,652     29,955      30,230     33,749      34,616
  Commercial                     8,231      7,916     35,819      37,422     41,036      43,105
  Industrial                     5,123      5,486     18,943      21,432     23,401      25,464
  Contract Pooling               1,364      2,200      6,896      15,913      6,800      18,128
  Other                            110          -        644         406        644         406

                                21,319     22,254     92,257     105,403    105,630     121,719

 Other                           3,870      4,183     13,443      12,663     17,170      16,108

Total Operating Revenues       157,364    177,308    812,732   1,003,134    909,081   1,119,530
Less - Gas Costs                53,633     62,419    355,849     495,488    379,696     533,827
     - Revenue Taxes            13,205     18,596     83,337     106,195     92,572     117,248

Net Operating Revenues       $  90,526  $  96,293  $ 373,546  $  401,451  $ 436,813  $  468,455

Deliveries (MDth):
 Gas Sales
  Residential                   14,594     19,767     94,258     114,197    101,320     122,553
  Commercial                     2,078      3,763     15,248      19,719     16,992      21,518
  Industrial                       486        833      3,173       4,291      3,403       4,608
                                17,158     24,363    112,679     138,207    121,715     148,679

 Transportation (a)
  Residential                    4,092      4,613     22,189      23,268     24,074      25,466
  Commercial                     6,626      6,545     30,030      32,440     34,133      36,488
  Industrial                     8,289      7,155     27,503      26,545     33,468      32,118
  Other                              -          -          -         234          -         234
                                19,007     18,313     79,722      82,487     91,675      94,306

 Total Gas Sales
   and Transportation           36,165     42,676    192,401     220,694    213,390     242,985

 Margin per Dth delivered    $    2.50  $    2.26  $    1.94  $     1.82  $    2.05  $     1.93

                                      
 (a)Volumes associated with contract pooling revenues are included in
      their respective customer classes.
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

Environmental Matters.  The Company is conducting environmental
investigations and work at certain sites that were the location
of former manufactured gas operations.  (See Note 3 of the Notes
to Consolidated Financial Statements.)

Credit Lines.  The Company has lines of credit totaling $129.4
million of which North Shore Gas may borrow up to $30 million.
At June 30, 1998, the Company and North Shore Gas had unused
credit available from banks of $91.2 million of which $30 million
was available to North Shore Gas.

Interest Coverage.  The fixed charges coverage ratios for the
Company for the 12 months ended June 30, 1998, and for fiscal
1997 and 1996 were 4.04, 5.01, and 4.84, respectively.

Year 2000.  The Company is modifying all of its computer programs
to be year 2000 compliant.  The Company does not believe that the
amount of expenditures it will incur in connection with its year
2000 modifications will have a material adverse effect on the
financial position or results of operations of the Company.  The
Company's year 2000 modification program has achieved substantial
progress and the Company expects that the modifications will be
completed and fully tested prior to the year 2000.  The Company
is also requiring that other parties, particularly vendors with
whom the Company electronically interacts, have year 2000
compatible computer systems.  The Company, however, cannot
control the success of other parties' year 2000 modification
efforts.

Forward-Looking Information.  Management's Discussion and
Analysis of Results of Operations and Financial Condition
("MD&A") contains statements that may be considered forward-
looking, such as the discussion of the effect of weather on net
income, cash position and coverage ratios, the insignificant
effect on income arising from changes in revenue from customers'
gas purchases from entities other than the Company, environmental
matters, and the discussion concerning year 2000 compliant
information systems.  These statements speak of the Company's
plans, goals, beliefs, or expectations, refer to estimates or use
similar terms.  Actual results could differ materially because
the realization of those results is subject to many
uncertainties, including:

"    The future health of the U.S. and Illinois economies.
  
"    The timing and extent of changes in energy commodity prices
  and interest rates.
  
"    Regulatory developments in the U.S., Illinois and other
  states where the Company has investments.
  
"    Changes in the nature of the Company's competition resulting
  from industry consolidation, legislative change, regulatory
  change and other factors, as well as action taken by particular
  competitors.
  
"    The ability of various vendors and others with whom the
  Company electronically interacts to complete year 2000 systems
  modification efforts on a timely basis and in a manner that
  allows them to continue normal business transactions with the
  Company without disruption.

   Some of these uncertainties that may affect future results are
discussed in more detail in the sections of "Item 1 - Business"
of the Annual Report on Form 10-K captioned "Competition", "Sales
and Rates", "State Legislation and Regulation", "Federal
Legislation and Regulation", "Environmental Matters", and
"Current Gas Supply".  All forward-looking statements included in
this MD&A are based upon information presently available, and the
Company assumes no obligation to update any forward-looking
statements.

                  PART II.   OTHER INFORMATION


Item 1.  Legal Proceedings

   See Note 3 of the Notes to Consolidated Financial Statements
for a discussion pertaining to environmental matters.


Item 6.  Exhibits and Reports on Form 8-K

      a.  Exhibits

          Exhibit
          Number       Description of Document

           27          Financial Data Schedule

      b.  Reports on Form 8-K filed during the quarter ended June
30, 1998

        None
















                            SIGNATURE



   Pursuant to the requirements of the Securities Exchange Act of

1934, as amended, the registrant has duly caused this report to

be signed on its behalf by the undersigned thereunto duly

authorized.




                    The Peoples Gas Light and
                          Coke Company
                          (Registrant)




 August 11, 1998                 By: /s/ K. S. BALASKOVITS
    (Date)                               K. S. Balaskovits
                                    Vice President and Controller





                         (Same as above)
                      Principal Accounting
                             Officer
                                




                                                                      Exhibit 27