SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


                Quarterly Report Under Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


For the Quarter Ended December 31, 1996            Commission File No. 0-1857-3


                            THE BERKSHIRE GAS COMPANY


Massachusetts                                                        04-1731220

115 Cheshire Road, Pittsfield, Massachusetts                         01201-1879

Registrant's telephone number, including Area Code                 413:442-1511


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                               Yes  [X]    No  [ ]


At December 31, 1996, the Registrant had issued and outstanding 2,177,377 shares
of Common Stock, par value $2.50.



                            THE BERKSHIRE GAS COMPANY
             STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
                                 (In Thousands)


<TABLE>
<CAPTION>

                                                 Three Months     Three Months
                                                Ended 12/31/96   Ended 12/31/95
                                                --------------   --------------


<S>                                                <C>              <C>
Operating Revenues                                 $ 12,109         $ 11,952
Cost of Gas Sold                                      5,650            5,298
                                                   -------------------------

Operating Margin                                      6,459            6,654
                                                   -------------------------

Other Operating Expenses                              2,905            2,975
Depreciation                                          1,003              982
                                                   -------------------------

      Total                                           3,908            3,957
                                                   -------------------------
Utility Operating Income                              2,551            2,697
Other Income - Net                                      747              466
                                                   -------------------------

Operating and Other Income                            3,298            3,163
Interest Expense                                      1,034              912
Other Taxes                                             438              402
                                                   -------------------------

      Pre-Tax Income                                  1,826            1,849

Income Taxes                                            702              711
                                                   -------------------------

NET INCOME                                            1,124            1,138
Retained Earnings at Beginning of Period              6,396            5,389
                                                   -------------------------

      Total                                           7,520            6,527
                                                   -------------------------

Dividends Declared:
  Preferred Stock                                        88              173
  Common Stock                                          609              584
                                                   -------------------------

      Total Dividends                                   697              757
                                                   -------------------------

Retained Earnings at End of Period                 $  6,823         $  5,770
                                                   =========================

Earnings Available for Common Stock                $  1,036         $    965
                                                   -------------------------

Average Shares of Common Stock Outstanding          2,177.4          2,125.0
                                                   -------------------------

Earnings Per Share of Common Stock                 $   0.48         $   0.45
                                                   =========================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



                            THE BERKSHIRE GAS COMPANY
             STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
                                 (In Thousands)


<TABLE>
<CAPTION>

                                                  Six Months       Six Months
                                                Ended 12/31/96   Ended 12/31/95
                                                --------------   --------------

<S>                                                <C>              <C>
Operating Revenues                                 $ 16,226         $ 16,105
Cost of Gas Sold                                      7,282            7,017
                                                   -------------------------

Operating Margin                                      8,944            9,088
                                                   -------------------------

Other Operating Expenses                              5,635            5,257
Depreciation                                          1,339            1,317
                                                   -------------------------

      Total                                           6,974            6,574
                                                   -------------------------
Utility Operating Income                              1,970            2,514
Other Income - Net                                    1,163              782
                                                   -------------------------

Operating and Other Income                            3,133            3,296
Interest Expense                                      1,824            1,779
Other Taxes                                             626              593
                                                   -------------------------

      Pre-Tax Income                                    683              924

Income Taxes                                            267              360
                                                   -------------------------

NET INCOME                                              416              564
Retained Earnings at Beginning of Period              7,883            6,718
                                                   -------------------------
      Total                                           8,299            7,282
                                                   -------------------------

Dividends Declared:
  Preferred Stock                                       261              346
  Common Stock                                        1,215            1,166
                                                   -------------------------

      Total Dividends                                 1,476            1,512
                                                   -------------------------

Retained Earnings at End of Period                 $  6,823         $  5,770
                                                   =========================

Earnings Available for Common Stock                $    155         $    218
                                                   -------------------------

Average Shares of Common Stock Outstanding          2,169.0          2,119.0
                                                   -------------------------

Earnings Per Share of Common Stock                 $   0.07         $   0.10
                                                   =========================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



                            THE BERKSHIRE GAS COMPANY
             STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
                                 (In Thousands)


<TABLE>
<CAPTION>

                                                Twelve Months    Twelve Months
                                                Ended 12/31/96   Ended 12/31/95
                                                --------------   --------------

<S>                                                <C>              <C>
Operating Revenues                                 $ 46,170         $ 47,121
Cost of Gas Sold                                     20,480           23,079
                                                   -------------------------

Operating Margin                                     25,690           24,042
                                                   -------------------------

Other Operating Expenses                             11,860           11,310
Depreciation                                          3,868            3,719
                                                   -------------------------

      Total                                          15,728           15,029
                                                   -------------------------

Utility Operating Income                              9,962            9,013
Other Income - Net                                    1,916            1,447
                                                   -------------------------

Operating and Other Income                           11,878           10,460
Interest Expense                                      3,516            3,355
Other Taxes                                           1,748            1,905
                                                   -------------------------

      Pre-Tax Income                                  6,614            5,200

Income Taxes                                          2,548            1,997
                                                   -------------------------

NET INCOME                                            4,066            3,203
Retained Earnings at Beginning of Period              5,770            5,580
                                                   -------------------------
      Total                                           9,836            8,783
                                                   -------------------------

Dividends Declared:
  Preferred Stock                                       607              693
  Common Stock                                        2,406            2,320
                                                   -------------------------

      Total Dividends                                 3,013            3,013
                                                   -------------------------

Retained Earnings at End of Period                 $  6,823         $  5,770
                                                   =========================

Earnings Available for Common Stock                $  3,459         $  2,510
                                                   -------------------------

Average Shares of Common Stock Outstanding          2,153.9          2,105.5
                                                   -------------------------

Earnings Per Share of Common Stock                 $   1.61         $   1.19
                                                   =========================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



                            THE BERKSHIRE GAS COMPANY
                                 BALANCE SHEETS
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                          December 31,    June 30,
                                                             1996           1996
                                                          (Unaudited)     (Audited)
                                                          ------------    ---------

<S>                                                         <C>           <C>
ASSETS:
Utility Plant:
  Utility Plant - at original cost                          $  99,296     $ 96,571
  Less: Accumulated Depreciation                               26,207       25,356
                                                            ----------------------

      Utility Plant - Net                                      73,089       71,215
                                                            ----------------------
Other Property:
  Other Property - at original cost                            11,621       11,229
  Less:  Accumulated Depreciation                               5,618        5,280
                                                            ----------------------

      Other Property - Net                                      6,003        5,949
                                                            ----------------------

Current Assets:
  Cash                                                            402          196
  Accounts Receivable
    Utility Service (less allowance: Dec. 1996-$569;
     June 1996-$720)                                            7,036        5,781
   
    Merchandise & Other (less allowance: Dec. 1996-$118;
     June 1996-$96)                                             1,153          685
     
     Other Receivables                                            173          347
     Inventories (at the lower of average cost or market):
       Natural Gas                                              2,806        1,330
       Liquefied Petroleum                                        454          248
       Materials and Supplies                                   1,481        1,492
       Prepayments and Other                                      586          307
       Prepaid and Current Deferred Taxes                       1,934          249
       Recoverable(Refundable) Gas Costs                        3,784         (831)
                                                            ----------------------

          Total Current Assets                                 19,809        9,804
                                                            ----------------------

     Deferred Debits:
       Unamortized Debt Expense                                 2,240          729
       Capital Stock Expense                                      454          508
       Environmental Cleanup Costs                              1,048          973
       Other                                                    1,674        1,192
                                                            ----------------------

          Total Deferred Debits                                 5,416        3,402
                                                            ----------------------

   Recoverable Environmental Cleanup Costs                      3,290        3,290
                                                            ----------------------

          TOTAL ASSETS                                      $ 107,607     $ 93,660
                                                            ======================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



                   THE BERKSHIRE GAS COMPANY
                          BALANCE SHEETS
                          (In Thousands)


<TABLE>
<CAPTION>

                                                         December 31,    June 30,
                                                             1996          1996
                                                         (Unaudited)     (Audited)
                                                         ------------    ---------

<S>                                                        <C>           <C>
CAPITALIZATION AND LIABILITIES Common Shareholders' 
 Equity:
  Common Stock                                             $   5,443     $  5,382
  Premium on Common Stock                                     16,652       16,330
  Retained Earnings                                            6,823        7,883
                                                           ----------------------

      Total Common Shareholders' Equity                       28,918       29,595
                                                           ----------------------

Redeemable Cumulative Preferred Stock                            363        8,406
                                                           ----------------------

Long-Term Debt                                                40,000       31,999
                                                           ----------------------

Current Liabilities:
  Notes Payable to Banks                                      14,965        3,636
  Accounts Payable                                             4,727        3,176
  Other Current Liabilities                                    2,246        2,453
                                                           ----------------------
      Total Current Liabilities                               21,938        9,265
                                                           ----------------------

      Other Liabilities                                        1,391        1,159
                                                           ----------------------

Unamortized Investment Tax Credit                              1,244        1,280
                                                           ----------------------

Deferred Income Taxes                                         10,463        8,666
                                                           ----------------------

Reserve for Recoverable Environmental Cleanup Costs            3,290        3,290
                                                           ----------------------

TOTAL CAPITALIZATION AND LIABILITIES                       $ 107,607     $ 93,660
                                                           ======================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



                            THE BERKSHIRE GAS COMPANY
                      STATEMENTS OF CASH FLOWS - Unaudited
                                 (In Thousands)


<TABLE>
<CAPTION>

                                                            Six Months        Six Months
                                                          Ended 12/31/96    Ended 12/31/95
                                                          --------------    --------------

<S>                                                          <C>               <C>
Cash Flows from Operating Activities:
  Net Income                                                 $    416          $    564

Adjustments to Reconcile Net Income to Net Cash Used 
 in Operating Activities:
  Depreciation and Amortization                                 1,817             1,780
  Provision for Losses on Accounts Receivable                     351               448
  Refundable Gas Costs                                         (4,615)           (2,593)
  Deferred  Income Taxes                                        1,797             1,016
Changes in Assets and Liabilities Which Provided 
 (Used) Cash:
  Accounts Receivable                                          (2,074)           (2,235)
  Other Receivables                                               174               130
  Inventories                                                  (1,671)               78
  Accounts Payable                                              1,551               863
  Prepaid and Current Deferred Taxes                           (1,685)             (971)
  Other                                                          (983)           (1,019)
                                                             --------------------------

      Total Adjustments                                        (5,338)           (2,503)
                                                             --------------------------

Net Cash Used in Operating Activities                          (4,922)           (1,939)
                                                             --------------------------

Cash Flows from Investing Activities:
  Construction Expenditures                                    (3,705)           (3,970)
                                                             --------------------------

Cash Flows from Financing Activities:
  Dividends Paid                                               (1,477)           (1,512)
  Proceeds from Issuance of Long-Term Debt                     16,000                 0
  Proceeds from Note Payable Borrowings                         3,330             7,015
 Redemption of Preferred Stock                                 (9,360)                0
  Proceeds from Other Stock Transactions                          340               278
                                                             --------------------------

Net Cash Provided by Financing Activities                       8,833             5,781
                                                             --------------------------

Net Increase (Decrease) in Cash                                   206              (128)
Cash at Beginning of Period                                       196               492
                                                             --------------------------

Cash at End of Period                                        $    402          $    364
                                                             ==========================
</TABLE>


See Independent Accountants' Review Report and Notes to Financial Statements.



The Berkshire Gas Company
Notes to Financial Statements
December 31,1996
-------------------------------------------------------------------------------
(Dollars in Thousands Except Share Amounts)

NOTES:

   OTHER FINANCIAL INFORMATION:
      The  accompanying  unaudited  financial  statements  have been prepared in
accordance  with the  instructions  to Form 10-Q and do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete  financial  statements.  All  adjustments,  which in the opinion of
management  are  necessary for a fair  presentation  of the  operations  for the
interim periods  presented,  have been made.  These  adjustments are of a normal
recurring  nature.  The results of operations  for such interim  periods are not
necessarily indicative of results of operations for a full year. These financial
statements should be read in conjunction with the summary of accounting policies
and notes to financial  statements  included in the  Company's  Annual Report on
Form 10-K for the year ended June 30, 1996.

CONTINGENCIES:

   ENVIRONMENTAL:
      Like other  companies in the natural gas industry,  the Company is a party
to  governmental   actions  associated  with  former  gas  manufacturing  sites.
Management   estimates  that   expenditures   to  remediate  and  monitor  known
environmental  sites will range from $3,290 to $12,302.  In accordance with SFAS
No. 5, the Company has  recorded the most likely cost of $3,290.  The  Company's
unamortized  costs at December 31, 1996 were $1,048 and should be recovered over
a seven-year period through the Cost of Gas Adjustment Clause ("CGAC").



        Management's Discussion and Analysis of Financial Condition and
                            Results of Operations
--------------------------------------------------------------------------------


Results of Operations - Second Quarter Ended December 31, 1996
versus Second Quarter Ended December 31, 1995
--------------------------------------------------------------------------------

      Berkshire Gas considers Operating Margin (Operating Margin or Gross Profit
= Operating  Revenues Net of Cost of Gas Sold) to be a more pertinent measure of
operating  results than  Operating  Revenues.  This is due primarily to the fact
that revenues include changes in the cost of natural gas which must be recovered
or  returned  to  customers   through  the  Cost  of  Gas   Adjustment   Clause.
Consequently,  changes in the cost of gas will affect revenue  levels,  but does
not have a  corresponding  affect on  income.  Additionally,  margins  earned on
interruptible  gas sold and  transported  are flowed back to firm  customers and
therefore are not included in income. Accordingly, the discussion below pertains
to Operating Margin.

      Operating  Margin  decreased  $195,000 or 2.9% from the three months ended
December 31, 1995.  Operating Margin is primarily  affected by the change in the
level of firm gas sold and transported.  The decrease from 1995 is primarily due
to lower volumes of firm  residential  and  commercial  gas sold  resulting from
warmer than normal weather,  partially offset by higher transportation  revenues
and an increase in the number of customers.

<TABLE>
<CAPTION>

                                                         1996           1995
                                                     -----------    ------------

   <S>                                               <C>            <C>
   3 Month Firm MCF Sold & Transported                 1,651,000      1,662,000
   3 Month Operating Margin                          $ 6,459,000    $ 6,654,000
   3 Month Average Operating Margin Per Firm MCF     $      3.91    $      4.00
</TABLE>

      Other Operating  Expenses  decreased $70,000 or 2.4% from the three months
ended December 31, 1996.  The decrease is primarily due to lower  Administrative
and General Costs reflecting lower costs of employee  benefits and a decrease in
customer accounts expense due to reduced bad debt expense.

      Depreciation Expense increased $21,000 due to an increase in the amount of
depreciable assets.

      Other  Income  increased  $281,000 or 60.3% from 1995.  The  increase  was
primarily due to higher  interest  income from the over/under  collection of gas
costs from customers  through the CGAC,  increase in propane net revenues due to
greater  margins,  and to a lesser extent,  an increased  customer base.  Higher
jobbing revenues was due to higher levels of service activity.

      Interest  Expense  increased  $122,000 due to higher  levels of borrowings
caused  by  increased  gas  costs  and to a debt  restructuring  which  replaced
$8,000,000 of the 8.4% Preferred Stock with a 7.8% Senior Note.

      Dividends on Preferred  Stock  decreased  $85,000 due to the retirement of
the 8.4% Preferred series. Dividends on Common Stock increased $25,000 due to an
increase in the dividend rate of 1/2 cent per share quarterly and an increase in
the  number of  shares  reflecting  shareholder  participation  in the  Dividend
Reinvestment Program.

      The Allowance for Doubtful Accounts on Utility Service Accounts Receivable
was reduced by $151,000  since June 30, 1996 due to  additional  accounts  being
written off.



         Management's Discussion and Analysis of Financial Condition and
                             Results of Operations
--------------------------------------------------------------------------------


Results of Operations - Six Months Ended December 31, 1996
versus Six Months Ended December 31, 1995
--------------------------------------------------------------------------------


      Operating  Margin  decreased  $144,000  or 1.6% as  compared  with the six
months ended  December  31,  1995.  The decrease is due to 6% warmer than normal
weather,  partially  offset  by higher  transportation  revenues  and  increased
customer base.

<TABLE>
<CAPTION>

                                                          1996          1995
                                                      -----------    -----------

   <S>                                                <C>            <C>
   6 Month Firm MCF Sold & Transported                  2,347,000      2,363,000
   6 Month Operating Margin                           $ 8,944,000    $ 9,088,000
   6 Month Average Operating Margin Per Firm MCF      $      3.81    $      3.85
</TABLE>

      Other Operating  Expenses  increased  $378,000 or 7.2% from the six months
ended December 31, 1995. The increase is due primarily to higher  Administrative
and  General  Expenses  of  $239,000  due  to  the  implementation  of an  early
retirement program to lower payroll costs,  higher Transmission and Distribution
expense of $112,000 due to increased  customer service costs and vehicle leasing
costs,  and  higher  Marketing  expenses,  partially  offset  by lower  costs of
uncollectible accounts expense.

      Depreciation expense increased $22,000 due to an increase in the amount of
depreciable assets.

      Other  Income  increased  $381,000 or 48.7%,  Interest  Expense  increased
$45,000 or 2.5%,  Dividends on Preferred Stock decreased $85,000,  and Dividends
on Common Stock  increased  $49,000 from the six months ended  December 31, 1995
for the same reasons as discussed in the Results of Operations - Second Quarter.

      Income  Taxes  decreased  $93,000  or 25.8% due to a  decrease  in Pre-Tax
Income.


         Management's Discussion and Analysis of Financial Condition and
                             Results of Operations
--------------------------------------------------------------------------------


Results of Operations - Twelve Months Ended December 31, 1996
versus Twelve Months Ended December 31, 1995
--------------------------------------------------------------------------------

     Earnings  available for Common Stock were  $3,459,000 for the twelve months
ended  December 31, 1996 as compared to $2,510,000 for 1995. The increase is due
primarily to a return to colder weather during the 1996 heating season.

     Operating Margin increased  $1,648,000 or 6.9% from the twelve months ended
December 31, 1995.  Operating Margin is primarily  affected by the change in the
level of firm gas sold and transported.

     The  Company's  sales are  affected by weather as the  majority of its firm
customers  use natural gas for heating.  The increase from 1995 is primarily due
to higher  volumes of firm gas sold due to 13.0%  colder  weather for the winter
period of January - March as compared with 1995.

<TABLE>
<CAPTION>

                                                         1996           1995
                                                     ------------   ------------

   <S>                                               <C>            <C>
   12 Month Firm MCF Sold & Transported                 6,498,000      6,122,000
   12 Month Operating Margin                         $ 25,690,000   $ 24,042,000
   12 Month Average Operating Margin Per Firm MCF    $       3.95   $       3.93
</TABLE>

      Other Operating Expenses increased $550,000 or 4.9% over the twelve months
ended December 31, 1995. The increase is primarily the result of higher Customer
Accounts expenses of $255,000 due to higher levels of uncollectible accounts and
increased data processing costs, higher  Transmission and Distribution  expenses
of $256,000 and net increase in all other expenses of $39,000.

      Depreciation  increased $149,000 over the twelve months ended December 31,
1995, due to an increase in the level of depreciable assets.

      Other  Income  increased  $469,000 or 32.4% from 1995.  The  increase  was
primarily  due to higher  interest on the  undercollection  of prior  period gas
costs through the CGAC, higher Propane revenues due to colder weather, partially
offset by lower Appliance Rental revenues.

      Interest expense increased  $161,000 due to the increase in long-term debt
used to retire the $8,000,000, 8.4% Preferred Stock series.

      Income Taxes increased $551,000 due to higher earnings in 1996.

      Dividends on Preferred  Stock  decreased  $86,000 due to the retirement of
the 8.4% Preferred Stock in the fourth quarter of 1996.

      Dividends  declared on Common Stock  increased  $86,000 due to  additional
shares  outstanding  through  the  Company's  DRIP  and to a lesser  extent,  an
increase in  quarterly  dividends  to $.28 per share from $.275,  effective  the
fourth quarter of 1996.

Liquidity and Capital Resources - December 31, 1996

      The Company added approximately  $3,705,000 to Plant assets during the six
months ended  December  31,  1996.  These  construction  expenditures  primarily
represent  investments  in new  and  replacement  mains  and  services,  and the
continued conversion to automated meter reading.

      The capital structure of the Company at December 31, 1996 was 41.7% Common
Equity, .5% Preferred Stock and 57.8% Long-Term Debt.

      The Company initially finances construction expenditures and other funding
needs primarily with short-term bank borrowings, and to a lesser extent with the
reinvestment  of dividends.  The Company  continually  evaluates its  short-term
borrowing  position and based on prevailing  interest rates,  market conditions,
etc.,  makes  determinations  regarding  conversion of short-term  borrowings to
long-term  debt or equity.  As part of this process and in keeping with its cost
containment program, the Company called for redemption the First Mortgage Bonds,
Series K,  7.875%,  $540,000  and  Series M,  9.375%,  $720,000  and the  9.125%
Debentures,  $6,543,000  during  the third  quarter of fiscal  1996.  During the
second quarter of fiscal 1997, the Company  repurchased the 80,000 shares of the
8.4%  Preferred  Stock at $117 per share.  To  finance  these  redemptions,  the
Company sold a $16,000,000 Senior Note at 7.8% due 2021. As of June 30, 1996, in
accordance  with SFAS No. 6, the  Company  had  classified  $7,999,000  of Notes
Payable  to  Banks  as  Long-Term  Debt  in  anticipation  of  the  Senior  Note
transaction.

      Funds for  environmental  clean-up  costs are initially  financed  through
short-term  borrowings  and all such costs will be  recovered  over a seven year
period under a ruling issued by the MDPU.

     Cautionary Statement for Purposes of the "Safe Harbor"
     Provisions of the Private Securities Litigation Reform
     Act of 1995

      This  Quarterly  Report  contains  forward-looking  statements  within the
meaning of the Private Securities  Litigation Reform Act of 1995. Actual results
could  differ  materially  from  those  contemplated  by such  statements.  Such
statements reflect management's current views, are based on many assumptions and
are subject to risks and uncertainties.

      Certain important factors which could cause such results to differ include
risks  associated  with  the  Company's   maintaining  contracts  with  specific
customers,  government  regulation,  the increasingly  competitive nature of the
markets in which the Company is engaged, and dependence on key personnel.  These
factors are not intended to represent a complete list of the general or specific
risks that may affect the Company.



PART II - OTHER INFORMATION


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

          No developments during the quarter.

Item 2.   Changes in Securities
-------------------------------

          During November,  1996, the Company repurchased all 80,000 shares of
          the 8.4% Preferred  Stock series at $117 per share.  The redemptions
          were financed  through the sale of a  $16,000,000,  7.8% Senior Note
          due 2021.

Item 3.   Defaults Upon Senior Securities
-----------------------------------------

          Not Applicable

Item 4.   Submission of Matters to a Vote of Security Holders
-------------------------------------------------------------

          On November 13, 1996, the Annual Meeting of the  shareholders of the
          Berkshire  Gas  Company  was  held  at  the  Berkshire  Hilton  Inn,
          Pittsfield, Massachusetts at 10:00 a.m.

          Proxies  for  said  annual  meeting  were   solicited   pursuant  to
          Regulation   14A.  There  was  no   solicitation  in  opposition  to
          Management's  nominees,  as listed in the Proxy  statement,  for the
          election of Directors. All nominees were duly elected.

Item 5.   Other Information
---------------------------
          Not Applicable

Item 6.   Exhibits and Reports on Form 8 - K
--------------------------------------------

          (a) List of Exhibits

               3(i) - Articles of  Incorporation including  an  Amendment to the
                      Company's Charter dated September  10, 1996,  and attached
                      herewith.

               4   -  A copy of the Senior  Note  Agreement  dated  November 1,
                      1996, and attached herewith.

               27  -  Financial Data Schedule

The balance sheet as of December 31, 1996, the related  statements of operations
and retained  earnings for the three month,  six month and twelve month  periods
ended  December 31, 1996 and 1995,  and the statements of cash flows for the six
month  periods  ended  December 31, 1996 and 1995 have been  reviewed,  prior to
filing, by the Registrant's  independent public  accountants,  Deloitte & Touche
LLP, whose report covering their review of the financial statements is presented
below.


Deloitte &
   Touche LLP
-------------     --------------------------------------------------------------
                  City Place                           Telephone: (860) 280-3000
                  185 Asylum Street                    Facsimile: (860) 280-3051
                  Hartford, Connecticut 06103-3402


INDEPENDENT ACCOUNTANTS' REPORT

The Berkshire Gas Company:

We have reviewed the accompanying  balance sheet of The Berkshire Gas Company as
of December 31, 1996, the related statements of operations and retained earnings
for the three month,  six month and twelve month periods ended December 31, 1996
and 1995,  and the  statements  of cash  flows for the six month  periods  ended
December 31, 1996 and 1995. These financial statements are the responsibility of
the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression  of  an  opinion  regarding  the  financial  statements  as a  whole.
Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to such financial statements for them to be in conformity with generally
accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards,  the balance  sheet of The Berkshire Gas Company as of June 30, 1996,
and the related statements of income and retained earnings and of cash flows for
the year then ended (not presented  herein);  and in our report dated August 19,
1996, we expressed an unqualified opinion on those financial statements.  In our
opinion,  the information set forth in the accompanying balance sheet as of June
30, 1996 is fairly stated, in all material respects,  in relation to the balance
sheet from which it has been derived.


/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
February 10, 1997



                                   SIGNATURES


      Pursuant to the  requirements  of the Securities and Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                        THE BERKSHIRE GAS COMPANY
                                        Registrant


                                        /s/ MICHAEL J. MARRONE
                                        ----------------------------------------
                                        Michael J. Marrone
                                        Vice President, Treasurer & 
                                         Chief Financial Officer



Dated: February 11, 1997