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 March 31, 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 April 30, 1997.


<TABLE>
                        PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

                    The Peoples Gas Light and Coke Company
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
<CAPTION>
                                       Three                Six                 Twelve
                                    Months Ended        Months Ended         Months Ended
                                      March 31,           March 31,            March 31,
                                 ------------------  ------------------  --------------------
                                   1997      1996      1997      1996       1997       1996 
                                 --------  --------  --------  --------  ----------  -------- 
                                                    (Thousands of Dollars) 
  <S>                            <C>       <C>       <C>       <C>       <C>         <C>
OPERATING REVENUES:
  Gas sales                      $436,984  $387,178  $733,692  $623,499  $1,018,392  $841,019
  Transportation                   48,953    38,554    83,654    73,707     124,612   113,423
  Other                             3,411     3,383     8,481     6,537      15,655    13,417
                                 --------  --------  --------  --------  ----------  --------
    Total Operating Revenues      489,348   429,115   825,827   703,743   1,158,659   967,859
                                 --------  --------  --------  --------  ----------  --------
OPERATING EXPENSES:
  Gas costs                       271,885   204,801   433,069   313,500     565,294   398,445
  Operation                        42,706    54,855    90,103   101,862     178,190   189,353
  Maintenance                       9,204    10,330    19,990    19,621      42,775    39,968
  Depreciation and amortization    16,499    15,954    32,903    30,819      65,090    60,176
  Taxes - Income                   30,934    31,929    50,908    50,654      49,697    40,957
        - State & local revenue    51,699    47,076    87,599    77,860     120,161   107,652
        - Other                     4,779     5,252     9,290     9,833      19,261    19,575
                                 --------  --------  --------  --------  ----------  --------
    Total Operating Expenses      427,706   370,197   723,862   604,149   1,040,468   856,126
                                 --------  --------  --------  --------  ----------  --------
OPERATING INCOME                   61,642    58,918   101,965    99,594     118,191   111,733
                                 --------  --------  --------  --------  ----------  --------
OTHER INCOME
  AND (DEDUCTIONS):
  Interest income                   1,759       238     2,004     2,529       3,504     8,628
  Allowance for funds used
    during construction                35        --        62        --          85        --
  Interest on long-term debt       (7,778)   (7,777)  (15,548)  (17,334)    (31,103)  (37,608)
  Other interest expense             (651)   (1,332)   (1,348)   (2,980)     (2,531)   (6,338)
  Income taxes                       (725)   (2,053)     (797)   (1,068)     (3,817)   (3,473)
  Miscellaneous - net                  46     4,918       100     3,676       6,444     3,923
                                 --------  --------  --------  --------  ----------  --------
    Total Other Income
       and Deductions              (7,314)   (6,006)  (15,527)  (15,177)    (27,418)  (34,868)
                                 --------  --------  --------  --------  ----------  --------
NET INCOME APPLICABLE
  TO COMMON STOCK                $ 54,328  $ 52,912  $ 86,438  $ 84,417  $   90,773  $ 76,865
                                 ========  ========  ========  ========  ==========  ========
                                                                               
               
<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>


                                                 March 31,                  March 31,
                                                   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                              $1,780,800   $1,761,007   $1,732,525
     Less - Accumulated depreciation                594,404      571,255      554,593
                                                 ----------   ----------   ----------
       Net property, plant and equipment          1,186,396    1,189,752    1,177,932
Other  investments                                    5,918        6,607        4,632
                                                 ----------   ----------   ----------
     TOTAL CAPITAL INVESTMENTS - NET              1,192,314    1,196,359    1,182,564
                                                 ----------   ----------   ----------
CURRENT ASSETS:

Cash                                                 13,195        3,826        5,358
Cash equivalents                                     17,290       13,711       50,937
Receivables -
   Customers, net of allowance for
     uncollectible accounts of $32,347,
       $25,279, and $22,431, respectively           208,889       63,152      168,283
   Other                                             30,379       32,045       46,803
Accrued unbilled revenues                            54,117       25,534       58,666
Materials and supplies, at average cost              12,524       14,017       15,171
Gas in storage, at last-in, first-out cost           27,341       55,876       33,578
Gas costs recoverable through rate adjustments           --       17,420       48,832
Prepayments                                          25,859       11,897        2,747
Other                                                15,500          500          500
                                                 ----------   ----------   ----------
     TOTAL CURRENT ASSETS                           405,094      237,978      430,875
                                                 ----------   ----------   ----------
OTHER ASSETS:

Regulatory assets                                    60,717       76,176       51,674
Deferred charges                                     16,460       12,249       11,432
                                                 ----------   ----------   ----------
     TOTAL OTHER ASSETS                              77,177       88,425       63,106
                                                 ----------   ----------   ----------
       TOTAL PROPERTIES AND OTHER ASSETS         $1,674,585   $1,522,762   $1,676,545
                                                 ==========   ==========   ==========


                                                                         
            
<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>
                                                 March 31,                 March 31,
                                                   1997      September 30,   1996
                                                (Unaudited)      1996     (Unaudited)
                                                 ----------   ----------   ----------
<S>                                              <C>          <C>          <C>
                                                        (Thousands of Dollars)
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                                458,262      398,875      421,360
                                                 ----------   ----------   ----------
       Total Common Stockholder's Equity            623,569      564,182      586,667
Long-term debt, exclusive of sinking fund
   payments and maturities due within one year      462,400      462,400      462,400
                                                 ----------   ----------   ----------
       TOTAL CAPITALIZATION                       1,085,969    1,026,582    1,049,067
                                                 ----------   ----------   ----------
CURRENT LIABILITIES:

Interim loans                                           700          700          700
Accounts payable                                    124,062      121,653      175,269
Dividends payable on common stock                    13,898       13,153       12,905
Customer gas service and credit deposits             15,699       37,121       16,750
Accrued taxes                                        89,713       31,242       87,510
Gas sales revenue refundable through
   rate adjustments                                   8,726       10,734       20,770
Accrued interest                                      8,573        8,758        8,579
Temporary LIFO liquidation credit                    45,422           --       55,104
                                                 ----------   ----------   ----------
       TOTAL CURRENT LIABILITIES                    306,793      223,361      377,587
                                                 ----------   ----------   ----------
DEFERRED CREDITS AND OTHER LIABILITIES:

Deferred income taxes - primarily
   accelerated depreciation                         219,254      211,623      192,991
Investment tax credits being amortized
   over the average lives of related property        30,980       31,696       32,423
Other                                                31,589       29,500       24,477
                                                 ----------   ----------   ----------
       TOTAL DEFERRED CREDITS AND
          OTHER LIABILITIES                         281,823      272,819      249,891
                                                 ----------   ----------   ----------
       TOTAL CAPITALIZATION AND LIABILITIES      $1,674,585   $1,522,762   $1,676,545


            
<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>
                                                              Six Months Ended
                                                                   March 31,
                                                             -------------------                                     
                                                               1997       1996  
                                                             --------   --------
                                                            (Thousands of Dollars)
  <S>                                                        <C>        <C>
OPERATING ACTIVITIES:
  Net Income                                                 $ 86,438   $ 84,417
  Adjustments to reconcile net income to net cash:
    Depreciation and amortization                              32,903     30,819
    Deferred income taxes and investment tax credits - net      4,513       (350)
    Change in other deferred credits and other liabilities      4,492     10,515
    Change in other assets                                      8,442    (22,268)
    Other                                                          --         28
    Change in current assets and liabilities:
     Receivables - net                                       (144,071)  (160,279)
     Accrued unbilled revenues                                (28,584)   (40,215)
     Material & Supplies                                        1,493     (1,329)
     Gas in storage                                            28,536     48,573
     Gas costs recoverable                                     17,420    (46,700)
     Accounts payable                                           2,409     87,577
     Customer gas service and credit deposits                 (21,422)   (18,263)
     Accrued taxes                                             58,471     60,548
     Gas sales revenue refundable                              (2,008)   (47,789)
     Accrued interest                                            (186)    (2,446)
     Temporary LIFO liquidation credit                         45,422     55,104
     Prepayments                                              (13,962)      (820)
                                                             --------   -------- 
  NET CASH PROVIDED BY OPERATING ACTIVITIES                    80,306     37,122
                                                             --------   -------- 
INVESTING ACTIVITIES:
  Capital expenditures - construction                         (26,260)   (31,762)
  Other assets                                                    179     12,265
  Other capital investments                                        29        367
  Other temporary cash investments                            (15,000)       100
                                                             --------    -------
  NET CASH USED IN INVESTING ACTIVITIES                       (41,052)   (19,030)
                                                             --------    -------    
FINANCING ACTIVITIES:
  Retirement of long-term debt                                     --    (86,750)
  Interim loans - net                                              --       (200)
  Trust fund - bond redemption                                     --        237
  Dividends paid on common stock                              (26,306)   (27,299)
                                                             --------   -------- 
  NET CASH USED IN FINANCING ACTIVITIES                       (26,306)  (114,012)
                                                             --------   --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS           12,948    (95,920)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD               17,537    152,215
                                                             --------   --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $ 30,485   $ 56,295
                                                             ========   ========
                                                                          
<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 six months
         ended March 31,            1997           1996  
         ------------------------------------------------
                                        (Thousands)
         <S>                       <C>            <C>
         Income taxes paid         $23,488        $22,018
         Interest paid              16,608         20,577

</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 and 1996 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.)

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 has appealed the Commission's order to the
Illinois Appellate Court.  Any change made by the Appellate Court
would have a prospective effect only.

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 March 31, 1997, the Company has made
payments of $83.2 million, and has accrued an additional $19.8
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 March 31, 1997, the total
of the costs deferred by the Company, net of recoveries and amounts
billed to other entities, was $10.4 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 March 31, 1997 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 March 31, 1997, it had recovered $4.9 million of
such costs through rates.

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 $3.7 million for the 12-months
ended March 31, 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 $3.2 million,
or $2.4 million after income taxes, for the 12-months ended       
March 31, 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 $9.7 million, $10.9
million, and $20.6 million for the three-, six-, and 12-month
periods, respectively.  The decrease in pension expense was caused
by the Company's adoption of settlement accounting, 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 increased $1.4 million, to $54.3 million, for the
three-months ended March 31, 1997, from the results of last year's
like quarter, due mainly to decreased pension expense caused by the
Company's adoption of settlement accounting, 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, net income benefited from a
tax accrual adjustment, reduced other operation and maintenance
expenses, and higher interest income.  These were partially offset
by reduced gas deliveries, attributable to warmer weather and
conservation and last year's gain associated with the expiration of
gas storage contracts.  (See Note 5 of the Notes to Consolidated
Financial Statements.)

   Net income increased $2.0 million, to $86.4 million, for the
current six-months ended March 31, 1997, as compared to the same
period in the prior year, due mainly to the aforementioned
decreased pension expense and tax accrual adjustment.  In addition,
the Company benefited from a full six-month effect of the Company's
rate increase that went into effect on November 14, 1995 (see Note
3A of the Notes to Consolidated Financial Statements), increased
miscellaneous operating revenues and a reduction in interest
expense.  However, these positive effects were partially offset by
the same factors that impacted the current second quarter, as well
as by lower interest income due to lower cash balances.

   Net income increased $13.9 million, to $90.8 million, for the
current 12-month period, from the results of the similar prior
period, due primarily to the aforementioned decreased pension
expense, the full 12-month effect 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 reduction in
interest expense, and a gain associated with the expiration of
certain gas storage contracts.    These beneficial effects were
partially offset by reduced gas deliveries and a reduction in
interest income due to lower cash balances.

<TABLE>
   A summary of variations affecting income between periods is
presented below, with explanations of significant differences
following:
<CAPTION>
                            Three Months Ended   Six Months Ended   12-Months Ended
                              March 31, 1997      March 31,1997        March 31, 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)  $(11,474)  (6.5)      $(7,224)  (2.3)     $11,442    2.5
Operation and
    maintenance expenses      (13,275) (20.4)      (11,390)  (9.4)      (8,356)  (3.6)
Depreciation and
    amortization expense          545    3.4         2,084    6.8        4,914    8.2
Income taxes                     (995)  (3.1)          254     .5        8,740   21.3
Other income and deductions     1,308   21.8           350    2.3       (7,450) (21.4)
Net Income Applicable
    to Common Stock             1,416    2.7         2,021    2.4       13,908   18.1
                                                                   
------------------------------------------------------------------------------------------
                          
<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 $11.5 million, to $165.8
million, and $7.2 million, to $305.2 million, for the current
three- and six-month periods, respectively, reflecting lower gas
deliveries due to warmer weather and conservation.  The current
six-month period also benefited from a full six month's effect of
the Company's rate increase.

   Net operating revenues increased $11.4 million, to $473.2
million, for the current 12-month period, due to the full effect of
the Company's rate increase.  However, this was partially offset by
decreased gas deliveries, due to conservation and warmer weather.

   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 $13.3 million, to
$51.9 million, and $11.4 million, to $110.1 million, for the
current three- and six-month periods, due mainly to a $9.7 million,
and a $10.9 million decrease in pension expense caused by the
Company's adoption of settlement accounting, an increase in the
number of employees choosing early retirement and by changes in
actuarial assumptions in the three- and six-month periods,
respectively.  (See Note 8 of the Notes to Consolidated Financial
Statements.)  In addition, labor costs decreased $1.2 million and
$830,000 in the three- and six-month periods, respectively.  The
positive developments in the current six-month period were
partially offset by an increase of $2.0 million in the provision
for uncollectible accounts due to increased gas sales revenues.

   Operation and maintenance expenses decreased $8.4 million, to
$221 million, in the current 12-month period due primarily to a
$20.6 million decrease in pension expense caused by the Company's
adoption of settlement accounting, 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.)  This decrease in costs was partially offset by an
increase in the provision for uncollectible accounts of $4.6
million, due to increased gas sales revenues, the prior period's
recognition of an IRS settlement (see Note 7 of the Notes to
Consolidated Financial Statements), which accounted for a $3.2
million reduction of expense in that period, and to an increase in
other non-labor operation and maintenance expenses.

Depreciation and Amortization Expense

   Depreciation and amortization expense increased $545,000, to
$16.5 million, for the current three-month period, due primarily to
net property additions.

   Depreciation and amortization expense increased $2.1 million, to
$32.9 million, and $4.9 million to $65.1 million, for the current
six- and 12-month periods, due primarily to depreciable property
additions and the amortization of costs associated with the closing
of the SNG Plant.  (See Note 7 of the Notes to Consolidated
Financial Statements.)

Income Taxes

   Income taxes, exclusive of income taxes included in other income
and deductions, decreased $1 million, to $30.9 million for the
three-month period due to an adjustment to reduce taxes accrued. 
This decrease was partially offset by increased income taxes due to
higher pre-tax income.

   Income taxes, exclusive of income taxes included in other income
and deductions, increased  $254,000 to $50.9 million, and $8.7
million, to $49.7 million, for the current six- and 12-month
periods, due primarily to increased pre-tax income.  These
increases were partially offset by an adjustment to reduce taxes
accrued.

Other Income and Deductions

   Other income and deductions increased $1.3 million for the
current three-month period, due chiefly to the prior year's gain of
$3.0 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.)  This was partially offset
by higher interest income and lower interest expense.

   Other income and deductions increased $350,000 for the current
six-month period, due primarily to the prior year's gain of $3.0
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
due to lower cash balances.  These negatives were partially offset
by lower interest expense.

   Other income and deductions decreased $7.5 million for the
current 12-month period, due primarily to lower interest expense,
due to reductions in long-term debt and amounts refundable to
customers.  In addition, the current period reflected a gain
associated with the expiration of certain natural gas storage
contracts.  These positive impacts were partially offset by lower
interest income due to lower cash balances.  (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 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.  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.

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

                              Three Months Ended   Six Months Ended   Twelve Months Ended
                                   March 31,          March 31,             March 31,
                              ------------------  -----------------  --------------------
                               1997      1996      1997      1996        1997      1996  
                               ----      ----      ----      ----        -----     ----  
<S>                          <C>       <C>       <C>       <C>       <C>         <C>
Operating Revenues (thousands):
  Gas sales
    Residential              $365,198  $316,972  $616,982  $517,507  $  857,072   $703,502
    Commercial                 59,203    57,115    97,191    86,561     133,456    112,812
    Industrial                 12,583    13,091    19,519    19,431      27,864     24,705
                             --------  --------  --------  --------  ----------   --------
                              436,984   387,178   733,692   623,499   1,018,392    841,019

  Transportation
    Residential                12,801    11,895    23,582    23,840      35,024     36,172
    Commercial                 16,309    16,502    29,956    30,981      43,918     45,642
    Industrial                  8,127    10,157    15,946    18,886      27,436     31,609
    Contract Pooling           11,710        --    13,764        --      17,828         --
    Other                           6        --       406        --         406         --
                             --------  --------  --------  --------  ----------   --------
                               48,953    38,554    83,654    73,707     124,612    113,423
                             --------  --------  --------  --------  ----------   --------
  Other Revenues                3,411     3,383     8,481     6,537      15,655     13,417
                             --------  --------  --------  --------  ----------   --------
Total Operating Revenues      489,348   429,115   825,827   703,743   1,158,659    967,859
Less  - Gas Costs             271,885   204,801   433,069   313,500     565,294    398,445
      - Revenues Taxes         51,699    47,076    87,599    77,860     120,161    107,652
                             --------  --------  --------  --------  ----------   --------
Net Operating Revenues       $165,764  $177,238  $305,159  $312,383  $   473,204  $461,762
                             ========  ========  ========  ========  ===========  ========
Deliveries (MDth):
  Gas Sales
    Residential                54,786   60,923     94,430   101,683      124,086   129,973
    Commercial                  9,345   11,796     15,871    18,186       21,377    23,217
    Industrial                  2,152    2,810      3,452     4,369        4,957     5,584
                             --------  -------  ---------  --------  -----------  --------
                               66,283   75,529    113,753   124,238      150,420   158,774
                             --------  -------  ---------  --------  -----------  --------
  Transportation (a)
    Residential                10,410    9,521     8,246     18,174       15,179    24,964
    Commercial                 14,448   14,536    25,980     26,379       36,917    37,738
    Industrial                  9,674   11,932    19,396     22,324       34,166    37,218
    Other                         224       --       234         --          234        --
                             --------  -------  --------  ---------  -----------  ---------   
                               34,756   35,989    53,856     66,877       86,496    99,920
                             --------  -------  --------  ---------  -----------  --------
Total Gas Sales
  and Transportation          101,039  111,518   167,609    191,115      236,916   258,694
                             ========  =======  ========  =========  ===========  ========
Margin per Dth
  delivered                     $1.64    $1.59     $1.82      $1.63        $2.00     $1.78

<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 $129.4 million of
which North Shore Gas Company may borrow up to $30 million.  At
March 31, 1997, the Company had unused credit available of $128.6
million.

Interest Coverage.  The fixed charges coverage ratios for the
Company for the 12-months ended March 31, 1997, and for fiscal 1996
and 1995 were 5.29, 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 4. Submission of Matters to a Vote of Security Holders

        a.  On March 27, 1997, the following persons were elected
            Directors of the Company and comprise the entire
            Board of Directors of the Company: Kenneth S. Balaskovits, 
            J. Bruce Hasch, James Hinchliff, Thomas M. Patrick, 
            Michael S. Reeves, and Richard E. Terry.

        b.  The following matter was voted upon at the annual
            meeting of shareholders. There were no broker non-votes
            with respect to the matters voted upon.
            

              1. The election of nominees for directors who will
                 serve for a one-year term or until their
                 respective successors shall be duly elected.  The
                 nominees, all of whom were elected, were as
                 follows:  Kenneth S. Balaskovits, J. Bruce Hasch, 
                 James Hinchliff, Thomas M. Patrick, Michael S. 
                 Reeves, and Richard E. Terry. The Secretary of the 
                 Company certified the following vote tabulations:

                                                       FOR          WITHHELD 
          Kenneth S. Balaskovits . . . . . .    .  . 24,817,566        0
          J. Bruce Hasch . . . . . . . . . . . . . . 24,817,566        0
          James Hinchliff  . . . . . . . . . . . . . 24,817,566        0
          Thomas M. Patrick . . . . . . . .     . . .24,817,566        0
          Michael S. Reeves  . . . . . . . . . . .   24,817,566        0
          Richard E. Terry  . . . . . . . . . . . .  24,817,566        0

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 March 31, 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)




        May 13, 1997                By:    /s/    K. S. BALASKOVITS     
       -------------               -----------------------------------
          (Date)                           K. S. Balaskovits
                                       Vice President and Controller





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