FORM 10-Q

                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, 1997
  
                                 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, 1997.



<TABLE>
                        PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

                    The Peoples Gas Light and Coke Company
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)

<CAPTION>
                                        Three                 Nine                 Twelve
                                     Months Ended         Months Ended          Months Ended
                                       June 30,              June 30,              June 30,      
                                  ------------------  --------------------  ----------------------
                                    1997      1996       1997       1996       1997        1996   
                                  --------  --------  ----------  --------  ----------  ----------
                                                     (Thousands of Dollars)  
<S>                                <C>       <C>       <C>         <C>       <C>         <C>

OPERATING REVENUES:
  Gas sales                       $150,871  $187,395  $  884,563  $810,894  $  981,868  $  891,506
  Transportation                    22,254    25,313     105,908    99,019     121,554     115,713
  Other                              4,183     3,730      12,663    10,267      16,108      13,352
                                  --------  --------  ----------  --------  ----------  ----------
    Total Operating Revenues       177,308   216,438   1,003,134   920,180   1,119,530   1,020,571
                                  --------  --------  ----------  --------  ----------  -----------
OPERATING EXPENSES:
  Gas costs                         62,419    93,886     495,488   407,386     533,827     434,072
  Operation                         38,904    47,275     129,006   149,136     169,820     193,154
  Maintenance                       12,093    10,568      32,083    30,189      44,301      40,384
  Depreciation and amortization     16,659    16,134      49,563    46,953      65,615      62,002
  Taxes - Income                     5,806     4,910      56,713    55,564      50,594      46,190
        - State & local revenue     18,596    21,508     106,195    99,368     117,248     110,144
        - Other                      4,685     4,960      13,975    14,793      18,985      19,572
                                  --------  --------  ----------  --------  ----------  ----------
    Total Operating Expenses       159,162   199,241     883,023   803,389   1,000,390     905,518
                                  --------  --------  ----------  --------  ----------  ----------
OPERATING INCOME                    18,146    17,197     120,111   116,791     119,140     115,053
                                  --------  --------  ----------  --------  ----------  ----------
OTHER INCOME
  AND (DEDUCTIONS):
  Interest income                      974       795       2,978     3,325       3,683       6,201
  Allowance for funds used
    during construction                 82        10         144        10         157          10
  Interest on long-term debt        (7,773)   (7,777)    (23,321)  (25,111)    (31,099)    (35,191)
  Other interest expense              (333)     (669)     (1,681)   (3,649)     (2,195)     (5,146)
  Income taxes                        (389)   (1,907)     (1,186)   (2,975)     (2,300)     (4,108)
  Miscellaneous - net                 (313)    4,256        (213)    7,931       1,876       8,133
                                  --------  --------  ----------  --------  ----------  ---------- 
   Total Other Income
      and Deductions                (7,752)   (5,292)    (23,279)  (20,469)    (29,878)    (30,101)
                                  --------  --------  ----------  --------  ----------  ----------
NET INCOME APPLICABLE
  TO COMMON STOCK                 $ 10,394  $ 11,905  $   96,832  $ 96,322  $   89,262  $   84,952
                                  ========  ========  ==========  ========  ==========  ==========
                                                                               
               
<FN>
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,
                                                    1997     September 30,     1996
                                                 (Unaudited)      1996      (Unaudited)
                                                  ----------   ----------   ----------
                                                        (Thousands of Dollars)
<S>                                               <C>          <C>          <C>

PROPERTIES AND OTHER ASSETS

CAPITAL INVESTMENTS:
Property, plant and equipment,
   at original cost                               $1,795,178   $1,761,007   $1,743,502
     Less - Accumulated depreciation                 605,626      571,255      564,485
                                                  ----------   ----------   ----------
       Net property, plant and equipment           1,189,552    1,189,752    1,179,017
Other  investments                                     5,499        6,607        4,181 
                                                  ----------   ----------   -----------
     TOTAL CAPITAL INVESTMENTS - NET               1,195,051    1,196,359    1,183,198
                                                  ----------   ----------   ----------
CURRENT ASSETS:
Cash                                                   4,510        3,826        3,483
Cash equivalents                                      65,783       13,711       49,147
Temporary cash investments                            15,500          500          500
Receivables -
   Customers, net of allowance for
     uncollectible accounts of $31,406,
       $25,279, and $25,564, respectively            117,881       63,152      107,943
   Other                                              32,552       32,045       36,291
Accrued unbilled revenues                             18,402       25,534       18,374
Materials and supplies, at average cost               13,313       14,017       14,724
Gas in storage, at last-in, first-out cost            42,269       55,876       40,894
Gas costs recoverable through rate adjustments            --       17,420       22,460
Prepayments                                           34,125       11,897        4,591
                                                  ----------   ----------   ----------
     TOTAL CURRENT ASSETS                            344,335      237,978      298,407
                                                  ----------   ----------   ----------
OTHER ASSETS:

Regulatory assets                                     53,176       76,176       61,969
Deferred charges                                      15,508       12,249       11,338
                                                  ----------   ----------   ----------
     TOTAL OTHER ASSETS                               68,684       88,425       73,307
                                                  ----------   ----------   ----------
     TOTAL PROPERTIES AND OTHER ASSETS            $1,608,070   $1,522,762   $1,554,912
                                                  ==========   ==========   ==========


                                                                           
            
<FN>
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,
                                                   1997     September 30,     1996
                                                (Unaudited)      1996      (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                                455,007      398,875      420,360
                                                 ----------   ----------   ----------
       Total Common Stockholder's Equity            620,314      564,182      585,667
Long-term debt, exclusive of sinking fund
   payments and maturities due within one year      462,400      462,400      462,400
                                                 ----------   ----------   ----------
       TOTAL CAPITALIZATION                       1,082,714    1,026,582    1,048,067
                                                 ----------   ----------   ----------
CURRENT LIABILITIES:
Interim loans                                            --          700           --
Accounts payable                                    107,799      121,653      101,172
Dividends payable on common stock                    13,650       13,153       12,905
Customer gas service and credit deposits             17,663       37,121       16,456
Accrued taxes                                        57,526       31,242       79,521
Gas sales revenue refundable through
   rate adjustments                                  14,310       10,734        9,407
Accrued interest                                      6,505        8,758        6,488
Temporary LIFO liquidation credit                    21,659           --       29,418
                                                 ----------   ----------   ----------
       TOTAL CURRENT LIABILITIES                    239,112      223,361      255,367
                                                 ----------   ----------   ----------
DEFERRED CREDITS AND OTHER LIABILITIES:

Deferred income taxes - primarily
   accelerated depreciation                         224,155      211,623      193,869
Investment tax credits being amortized
   over the average lives of related property        30,632       31,696       32,072
Other                                                31,457       29,500       25,537
                                                 ----------   ----------   ----------
       TOTAL DEFERRED CREDITS AND
         OTHER LIABILITIES                          286,244      272,819      251,478
                                                 ----------   ----------   ----------
       TOTAL CAPITALIZATION AND LIABILITIES      $1,608,070   $1,522,762   $1,554,912
                                                 ==========   ==========   ==========
                                                                           
            
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
</TABLE>
        


<TABLE>
          The Peoples Gas Light and Coke Company

                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Unaudited)

<CAPTION>
                                                             Nine Months Ended
                                                                  June 30,                                          
                                                              1997       1996  
                                                            --------   --------
                                                           (Thousands of Dollars)
<S>                                                         <C>        <C>

OPERATING ACTIVITIES:
  Net Income                                                $ 96,832   $ 96,322
  Adjustments to reconcile net income to net cash:
    Depreciation and amortization                             49,563     46,953
    Deferred income taxes and investment tax credits - net     8,724       (274)
    Change in other deferred credits and other liabilities     4,701     12,025
    Change in other assets                                    15,531    (33,874)
    Other                                                         --         55
    Change in current assets and liabilities:
     Receivables - net                                       (55,236)   (89,427)
     Accrued unbilled revenues                                 7,132         77
     Materials and supplies                                      704       (881)
     Gas in storage                                           13,607     41,257
     Gas costs recoverable                                    17,420    (20,328)
     Accounts payable                                        (13,853)    13,480
     Customer gas service and credit deposits                (19,458)   (18,556)
     Accrued taxes                                            26,284     52,559
     Gas sales revenue refundable                              3,576    (59,151)
     Accrued interest                                         (2,253)    (4,537)
     Temporary LIFO liquidation credit                        21,659     29,418
     Prepayments                                             (22,228)    (2,664)
                                                            --------   --------
  NET CASH PROVIDED BY OPERATING ACTIVITIES                  152,705     62,454
                                                            --------   -------- 
INVESTING ACTIVITIES:
  Capital expenditures - construction                        (44,174)   (47,183)
  Other assets                                                  (319)    11,870
  Other capital investments                                      448        791
  Other temporary cash investments                           (15,000)       100
                                                            --------   --------
  NET CASH USED IN INVESTING ACTIVITIES                      (59,045)   (34,422)
                                                            --------   --------
FINANCING ACTIVITIES:
  Retirement of long-term debt                                    --    (86,750)
  Interim loans - net                                           (700)      (900)
  Trust fund - bond redemption                                    --        237
  Dividends paid on common stock                             (40,204)   (40,204)
                                                            --------   --------
  NET CASH USED IN FINANCING ACTIVITIES                      (40,904)  (127,617)
                                                            --------   --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          52,756    (99,585)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD              17,537    152,215
                                                            --------   --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                  $ 70,293   $ 52,630
                                                            ========   ======== 
             
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
</TABLE>



              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, 1996.  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 revenues.

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.



<TABLE>
      Income taxes and interest paid (excluding capitalized
   interest) were as follows:
<CAPTION>

         For the nine months
         ended June 30,            1997            1996  
         ------------------------------------------------
                                        (Thousands)
         <S>                       <C>            <C>
         Income taxes paid         $31,078        $22,051
         Interest paid              26,452         30,590


</TABLE>

2F Recovery of Gas Costs, Including Charges for Transition 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).

   The Commission conducts annual proceedings regarding, for each
gas utility, 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 proceedings regarding the Company for fiscal
years 1995 through 1997 are currently pending before the
Commission.

   Pursuant to Federal Energy Regulatory Commission (FERC) Order
636 and successor orders, pipelines are allowed to recover from
their customers so-called transition costs.  These costs arise
from the restructuring of pipeline service obligations required by
the 636 Orders.  The Company is currently recovering pipeline
charges for transition costs through the Gas Charge.  (See Notes
3A and 3B.)

2G Recovery of Costs of Environmental Activities Relating to
Former Manufactured Gas Operations

   The Company is recovering the costs of environmental activities
relating to its former manufactured gas operations, including
carrying charges on the unrecovered balances, under rate
mechanisms approved by the Commission.  The Commission conducts
annual proceedings regarding, for each utility with such a rate
mechanism, the reconciliation of revenues from the rate mechanism
and related costs.  In such proceedings, costs recovered by a
utility through the rate mechanism are subject to challenge.  Such
proceedings regarding the Company for fiscal years 1994, 1995 and
1996 are currently pending before the Commission.  (See Note 4.)

3.  RATES AND REGULATION

3A Utility Rate Proceedings

Rate Order.  On November 8, 1995, the Commission issued an order
approving changes in rates of the Company that were designed to
increase annual revenues by approximately $30.8 million, exclusive
of additional charges for revenue taxes.  The Company was allowed a
rate of return on original-cost rate base of 9.19 per cent, which
reflected an 11.10 per cent cost of common equity.  The new rates
were implemented on November 14, 1995.  A group of industrial
transportation customers appealed the Commission's order to the
Illinois Appellate Court, but on June 27, 1997, the Appellate Court
affirmed the Commission's order.  All proceedings regarding this
case have concluded.

FERC Order 636 Cost Recovery.  In 1994, the Commission issued
orders providing for the full recovery of pipeline charges for FERC
Order 636 transition costs from the Company's gas service
customers.  The Commission directed that gas supply realignment
(GSR) costs (one of the four categories of transition costs) be
recovered on a uniform volumetric basis from all transportation and
sales customers.  A group of industrial transportation customers
has filed a petition with the Illinois Supreme Court appealing the
Commission's orders.  If the Illinois Supreme Court accepts the
appeal, any changes made by it to the Commission's orders would
have a prospective effect only.  (See Notes 2F and 3B.)

3B FERC Orders 636, 636-A, and 636-B

   FERC Order 636 and successor orders require pipelines to make
separate rate filings to recover transition costs.  The Company is
subject to charges for transition cost recovery by Natural Gas
Pipeline Company of America (Natural).  Under a Stipulation and
Agreement filed by Natural and approved by FERC, Natural's charges
to the Company for GSR transition costs (the largest category of
such costs for the Company) are subject to a cap of approximately
$103 million.  The Company is currently recovering transition costs
through the Gas Charge.  At June 30, 1997, the Company had made
payments of $89.6 million and had accrued an additional $13.4
million toward the cap.

   The 636 Orders are not expected to have a material effect on
financial position or results of operations of the Company.  (See
Notes 2F and 3A.)

4.  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, 1997, the total
of the costs deferred by the Company, net of recoveries and amounts
billed to other entities, was $10.5 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 in Chicago, 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 contributions 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 of its 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, 1997 have not been
reduced to reflect recoveries from insurance carriers.

   The Company believes that costs incurred by it for environmental
activities relating to former manufactured gas operations are
recoverable 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, 1997, it had
recovered $5.3 million of such costs through rates.  (See Note 2G.)

5.  EXPIRATION OF GAS STORAGE CONTRACTS

   The Company had certain natural gas storage contracts with
Natural that expired on or before December 1, 1995.  Associated
with the expiration of the contracts, the Company realized a gain,
after income taxes, of approximately $1.3 million for the 12-months
ended June 30, 1997.

6.  TAX MATTERS

   On September 30, 1993, the Company received notification from
the Internal Revenue Service (IRS) that settlement of past income
tax returns had been reached for fiscal years 1978 through 1990. 
The IRS settlement resulted in payments of principal and interest
to the Company in 1994 of approximately $25 million, or $19.4
million after income taxes.  The Company received regulatory
authorization to defer the recognition of the settlement amount in
income for fiscal year 1993, and to recognize the settlement amount
in income for fiscal years 1994 and 1995.  The Company represented
to the Commission that, having received this accounting
authorization, it would not file a request for an increase in base
rates before December 1994.

   As a result of the Commission's accounting authorization, the
Company amortized to operation expense approximately $1.1 million,
or $847,000 after income taxes, for the 12-months ended June 30,
1996.  The effect was to offset increases in costs that the Company
incurred during the period.

7.  LONG-TERM DEBT

7A 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, 1996, have been remarketed.  The interest rate on such bonds is
3.95 per cent for the period October 1, 1996, through September 30,
1997.

   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, 1996, have been remarketed.  The interest rate on such
bonds is 3.70 per cent for the period December 1, 1996, through
November 30, 1997.

   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, 1999.

7B Bonds Redeemed

   On December 29, 1995, the Company redeemed, from general
corporate funds, approximately $87 million aggregate principal
amount of the City of Joliet's 1984 Gas Supply Revenue Bonds,
Series A and B, which were secured by the Company's Series U and V
First and Refunding Mortgage Bonds.

8.  PENSION EXPENSE

   Pension expense for the Company decreased $7.7 million, $18.6
million, and $26.5 million for the three-, nine-, and 12-month
periods, respectively.  The decrease in pension expense was caused
by  settlement accounting attributed to an increase in the number
of employees choosing early retirement and changes in actuarial
assumptions.


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 $1.5 million, to
$10.4 million, for the three-months ended June 30, 1997, resulting
mainly from lower gas deliveries due to conservation and the prior
period's gain associated with the expiration of gas storage
contracts.  (See Note 5 of the Notes to Consolidated Financial
Statements.)  These effects were partially offset by decreased
pension expense caused by settlement accounting attributed to an
increase in the number of employees choosing early retirement and
changes in actuarial assumptions.  (See Note 8 of the Notes to
Consolidated Financial Statements.)

   Net income applicable to common stock increased $510,000, to
$96.8 million, and $4.3 million, to $89.3 million, for the current
nine- and 12-month periods ended June 30, 1997, respectively.  Net
income benefited from the aforementioned decrease in pension costs,
the  full nine- and 12-month effects of the Company's rate increase
that went into effect on November 14, 1995 (see Note 3A of the
Notes to Consolidated Financial Statements), a tax accrual
adjustment, and reduced interest expense.  These positive impacts
were partially offset by reduced gas deliveries due to conservation
and warmer weather, last year's gain associated with the expiration
of certain natural gas storage contracts (see Note 5 of the Notes
to Consolidated Financial Statements), and lower other income.


<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, 1997         June 30,1997         June 30, 1997
                         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) $(4,751)   (4.7)     $(11,975)   (2.9)      $(7,900)  (1.7)
Operation and
    maintenance expenses     (6,846)  (11.8)      (18,236)  (10.2)      (19,417)  (8.3)
Depreciation and
    amortization expense        525     3.3         2,610     5.6         3,613    5.8
Income taxes                    896    18.2         1,149     2.1         4,404    9.5
Other income and deductions  (2,460)  (46.5)       (2,810)  (13.7)          223    0.7
Net Income Applicable
    to Common Stock          (1,511)  (12.7)          510     0.5         4,310    5.1
                                                                   
                                                                   
                          
<FN>
(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 decreased $4.8 million, to $96.3 million,
$12.0 million, to $401.5 million, and $7.9 million, to $468.5
million, for the current three-, nine-, and 12-month periods,
respectively, due to a decline in gas deliveries attributable to
conservation and warmer weather.  However, the effects of these
factors on the nine- and 12-month periods were partially offset by
the full effect of the Company's rate increase.

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

Operation and Maintenance Expenses

   Operation and maintenance expenses decreased $6.8 million, to
$51 million, for the current three-month period, due chiefly to a
$7.7 million decrease in pension expense caused by settlement
accounting attributed to an increase in the number of employees
choosing early retirement and by changes in actuarial assumptions. 
(See Note 8 of the Notes to Consolidated Financial Statements.)  In
addition, the provision for uncollectible accounts decreased $1.8
million.  These decreases were partially offset by increases in the
cost of operating and maintaining the Company's distribution system
($761,000) and to an increase in the cost of outside services
($558,000).

   Operation and maintenance expenses decreased $18.2 million, to
$161.1 million, in the current nine-month period, due principally
to an $18.6 million decrease in the aforementioned pension expense,
and reductions in costs associated with injuries and damages
($1.4 million) and labor ($1.2 million).  Partially
offsetting these decreases were increased expenses for outside
services ($900,000), environmental costs recovered through rates
($825,000), and costs associated with operating and maintaining the
Company's distribution system ($476,000).

   Operation and maintenance expenses decreased $19.4 million, to
$214.1 million, in the current 12-month period due largely to a
reduction of $26.5 million in pension expense and a decline in the
costs associated with injuries and damages ($1.1 million).  The
above mentioned decreases were offset, in part, by increases
associated with the following items:  the costs of outside services
($1.7 million), the costs of operating and maintaining the
Company's distribution system ($1.7 million), the prior period's
recognition of an IRS settlement ($1.1 million) (see Note 6 of the
Notes to Consolidated Financial Statements), and environmental
costs recovered through rates ($1.1 million).

Depreciation and Amortization Expense

   Depreciation and amortization expense increased $525,000, to
$16.7 million, for the current three-month period, due primarily to
net property additions.

   Depreciation and amortization expense increased $2.6 million, to
$49.6 million, and $3.6 million to $65.6 million, for the current
nine- and 12-month periods, due primarily to depreciable property
additions and the amortization of costs associated with the closing
of the Company's synthetic natural gas-making (SNG) Plant.

Income Taxes

   Income taxes, exclusive of income taxes included in other income
and deductions, increased $896,000, to $5.8 million for the
three-month period due to higher pre-tax income.

   Income taxes, exclusive of income taxes included in other income
and deductions, increased  $1.1 million to $56.7 million, and $4.4
million, to $50.6 million, for the current nine- and 12-month
periods, due primarily to increased pre-tax income.  These
increases were partially offset by a reduction to taxes accrued.

Other Income and Deductions

   Other income and deductions increased $2.5 million for the
current three-month period, due chiefly to the prior year's gain of
$2.4 million, after income taxes, associated with the expiration of
certain natural gas storage contracts (see Note 5 of the Notes to
the Consolidated Financial Statements) and to lower interest
income.  These effects were partially offset by lower interest
expense.

   Other income and deductions increased $2.8 million for the
current nine-month period, due primarily to the prior year's gain
of $5.4 million, after income taxes, associated with the expiration
of certain natural gas storage contracts (see Note 5 of the Notes
to the Consolidated Financial Statements) and to lower other
income.  These negative effects were partially offset by lower
interest expense.

   Other income and deductions decreased $223,000 for the current
12-month period, due primarily to lower interest expense. Partially
offsetting this benefit was the prior period's gain associated with
the expiration of certain natural gas storage contracts.  (See Note
5 of the Notes to the Consolidated Financial Statements.)

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 Standards.  In March 1995, the Financial Accounting
Standards Board (FASB) issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of ".  This statement requires recognition of impairment
losses on long-lived assets when an asset's book value may not be
recoverable.  For regulated companies, the statement requires that
regulatory assets be probable of recovery at every balance sheet
date.  This statement requires adoption no later than the Company's
1997 fiscal year.  The Company does not expect the adoption of SFAS
No. 121 to have a material adverse effect on its financial position
or results of operations.

   In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation".  This statement requires companies to
either recognize compensation costs measured at fair value
attributable to employee stock options or similar equity
instruments at the grant date in net income, or, in the
alternative, provide pro forma footnote disclosure on net income
and earnings per share.  This statement requires adoption no later
than the Company's 1997 fiscal year.  The Company anticipates
electing the pro forma footnote disclosure provisions of this
statement in 1997.

FERC Order 636 Costs.  In 1992, the FERC issued Order No. 636 and
successor orders that required substantial restructuring of the
service obligations of interstate pipelines.  (See Notes 2F, 3A,
and 3B of the Notes to Consolidated Financial Statements.)

   In 1994, the Commission entered orders providing for full
recovery by the Company of FERC Order 636 transition costs from the
Company's gas service customers.  The Commission's orders have been
appealed to the Illinois Supreme Court.  (See Notes 2F, 3A, and 3B
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.  The contracts
were negotiated to overcome the potential threat of bypassing the
utility's distribution system.  The contracts will not have a
material adverse effect on the financial position or results of
operations of the Company.

Small Volume Transportation Service.  On June 25, 1997, the
Illinois Commerce Commission approved the Company's Riders SVT and
AGG which will initiate a two year pilot program designed to
provide transportation service to certain small volume 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,  
                            -------------------    -----------------   -------------------
                               1997       1996      1997        1996     1997       1996    
<S>                         <C>        <C>        <C>        <C>       <C>         <C>
Operating Revenues (thousands):
  Gas sales
    Residential             $127,380   $157,641   $ 744,362  $675,148  $ 826,812   $744,997
    Commercial                19,639     23,369     116,830   109,930    129,725    119,090
    Industrial                 3,852      6,385      23,371    25,816     25,331     27,419
                            --------  ---------   ---------  --------  ---------   --------
                             150,871    187,395     884,563   810,894    981,868    891,506
                            --------  ---------   ---------  --------  ---------   --------
  Transportation
    Residential                6,652      7,054      30,235    30,894     34,622     35,627
    Commercial                 7,916      8,702      37,871    39,683     43,133     45,618
    Industrial                 5,486      7,709      21,432    26,594     25,214     32,620
    Contract Pooling           2,200      1,848      15,964     1,848     18,179      1,848
    Other                         --         --         406        --        406         -- 
                            --------   --------   ---------  --------  ---------   --------
                              22,254     25,313     105,908    99,019    121,554    115,713
                            --------   --------   ---------  --------  ---------   --------
  Other Revenues               4,183      3,730      12,663    10,267     16,108     13,352
                            --------  ---------   ---------  --------  ---------   --------
Total Operating Revenues     177,308    216,438   1,003,134   920,180  1,119,530  1,020,571
Less  - Gas Costs             62,419     93,886     495,488   407,386    533,827    434,072
    - Revenues Taxes          18,596     21,508     106,195    99,368    117,248    110,144
                           ---------  ---------   ---------  --------  ---------  ---------
Net Operating Revenues     $  96,293   $101,044   $ 401,451  $413,426  $ 468,455  $ 476,355
                           =========  =========   =========  ========  =========  =========
Deliveries (MDth):
  Gas Sales
    Residential               19,767     21,301     114,196   122,984    122,552    131,763
    Commercial                 3,763      3,627      19,634    21,813     21,513     23,467
    Industrial                   833      1,115       4,285     5,484      4,674      5,848
                           ---------  ---------   ---------  --------  ---------  ---------
                              24,363     26,043     138,115   150,281    148,739    161,078
                           ---------  ---------   ---------  --------  ---------  ---------
  Transportation (a)
    Residential                4,613      4,734      23,269    22,908     25,468     25,140
    Commercial                 6,545      6,969      32,525    33,348     36,492     37,965
    Industrial                 7,155      9,269      26,551    31,593     32,052     39,146
    Other                         --         --         234        --        234         -- 
                           ---------   --------   ---------  --------  ---------  ---------
                              18,313     20,972      82,579    87,849     94,246    102,251
                           ---------   --------   ---------  --------  ---------  ---------
Total Gas Sales
  and Transportation          42,676     47,015     220,694   238,130    242,985    263,329
                           =========   ========   =========  ========   ========  =========
Margin per Mcf
  delivered                    $2.26      $2.15       $1.82     $1.74       $1.93     $1.81


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


LIQUIDITY AND CAPITAL RESOURCES

Rate Order.  On November 8, 1995, the Commission issued an order
approving changes in rates of the Company.  (See Note 3A of the
Notes to Consolidated Financial Statements.)

Environmental Matters.  The Company is conducting environmental
investigations and work at certain sites that were the location of
former manufactured gas operations.  (See Note 4 of the Notes to
Consolidated Financial Statements.)

Bonds Redeemed.  On December 29, 1995, the Company redeemed, from
general corporate funds, approximately $87 million aggregate
principal amount of the City of Joliet's 1984 Gas Supply Revenue
Bonds, Series A and B, which were secured by the Company's Series U
and V First and Refunding Mortgage Bonds.  (See Note 7B of the
Notes to Consolidated Financial Statements.)

Credit Lines.  The Company has lines of credit of $114.4 million of
which North Shore Gas Company may borrow up to $25 million.  At
June 30, 1997, the Company had unused credit available of $114.4
million.

Interest Coverage.  The fixed charges coverage ratios for the
Company for the 12-months ended June 30, 1997, and for fiscal 1996
and 1995 were 5.27, 4.84, and 2.76, respectively.



                   PART II.   OTHER INFORMATION

Item 1.  Legal Proceedings

   See Note 4 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
          ------------------------------------------------------------- 

            3(a)       Amendment to the By-Laws of the Registrant
                       dated March 26, 1997.
            
            3(b)       By-Laws of the Registrant, as amended,
                       dated March 26, 1997.

            27         Financial Data Schedule

      b.  Reports on Form 8-K filed during the quarter ended June 30, 1997

              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  12  , 1997                  By:    /s/    K. S. BALASKOVITS     
     ------------------                 ----------------------------------
            (Date)                            K. S. Balaskovits
                                          Vice President and Controller





                                                    (Same as above)
                                          ------------------------------
                                           Principal Accounting Officer