Eastern Utilities
1995 Annual Report


EUA System Profile

Eastern Utilities Associates is a diversified energy services company whose
shares are traded on the New York and Pacific Stock Exchanges under the ticker
symbol EUA.  Its subsidiaries are engaged in the generation, transmission,
distribution and sale of electricity; energy related services such as energy
management and conservation and efficient use of energy.

     To better reflect the competitive business environment in which it
operates, EUA is organized in four distinct business units.

Core Electric Business
EUA's core electric business comprises two business units. The retail business
unit provides electric service to approximately 297,000 customers in
southeastern Massachusetts, and northern and coastal Rhode Island.  Retail
electric subsidiaries are Blackstone Valley Electric Company, Eastern Edison
Company and Newport Electric Corporation.  The wholesale business unit is
Montaup Electric Company, EUA's generation and transmission subsidiary, which
provides electricity at wholesale to the retail electric subsidiaries and two
other non-affiliated municipal electric utilities.

"Map of Southern New England Depicting Montaup Electric Wholesale Territory,
Blackstone Valley Electric Service Area, Eastern Edison Service Area and
Newport Electric Service Area."

Energy Related Business
EUA's energy related business unit includes EUA Cogenex Corporation, EUA Ocean
State Corporation and EUA Energy Investment Corporation.  EUA Cogenex is the
most active of our energy related companies with energy services contracts
throughout the United States and Canada (map).  EUA Ocean State owns a 29.9%
partnership interest in the Ocean State Power electric generating station in
northern Rhode Island.  EUA Energy makes investments in energy related
businesses.

Corporate
The corporate business unit is made up of Eastern Utilities Associates - the
System's parent company - and EUA Service Corporation which provides
professional and technical services to all EUA System companies.

On The Cover: Competition is on the horizon for the electric utility industry.
Just as the race goes to the most prepared runner, so too, the company which is
best prepared for competition is in a stronger position to win.  Eastern
Utilities intends to be a winner!  Throughout this Annual Report, artist Paul
Zwolak interprets factors we consider most important to our growth and the
changing utility industry.

"Map of United States and Southern Canada Depicting Areas of EUA Cogenex
Activity"

<TABLE>

HIGHLIGHTS
<CAPTION>
                                          1995        1994           1993
<S>                                   <C>           <C>            <C>
FINANCIAL DATA ($ in thousands)
 Operating Revenues                   $   563,363    $   564,278   $   566,477
 Consolidated Net Earnings(1)              32,626         47,370        44,931
 Return on Average Common Equity              8.8%          13.6%         15.0%
 Common Shareholder Equity-
     % of Capitalization (Year-End)          44.5%          42.8%         38.7%
 Total Assets                           1,200,273      1,234,049     1,203,137
 Cash Construction Expenditures            77,923         50,519        76,391
COMMON SHARE DATA
 Consolidated Earnings per Share<F1>  $      1.61    $      2.41   $      2.44
 Dividends Paid per Share             $     1.585    $     1.515   $      1.42
 Annual Dividend Rate                 $      1.60    $      1.54   $      1.44
 Total Common Shares Outstanding       20,436,764     19,936,980    19,032,598
 Average Common Shares Traded Daily        58,573         35,359        42,854
 Book Value per Share (Year-End)      $     18.36    $     18.33   $     17.50
 Market Price -High                            25             27 3/8        29 7/8
              -Low                             21 1/2         21 3/8        23 7/8
              -Year-End                        23 5/8         22            28
OPERATING DATA
   Total Primary Sales (MWH)            4,441,000      4,410,000     4,352,000
   System Requirements (MWH)            4,668,000      4,643,000     4,599,000
   System Peak Demand (MW)                    931            921           854
   System Reserve Margin (At Peak)           24.2%          22.4%         37.1%
   System Load Factor                        57.2%          57.5%         61.5%
   Customers (Year-End)                   297,331        293,707       291,799
   Employees (Year-End) - Core Electric<F2>   541            720           766
                        - Energy Related      253            240           238
                        - Corporate<F2>       536            437           440

<FN>
<F1> See Management's Discussion and Analysis of Financial Condition and Results of
     Operations for details of one-time impacts to earnings.
<F2> Reflects employee shift resulting from corporate reorganization completed in
     1995.
</FN>
</TABLE>


To Our Shareholders
Dear Shareholder:
The waves of change continued rolling through the electric utility industry in
1995.  Our management team continued its proactive involvement in the formation
of the framework for an orderly transition from the age of regulated monopoly
to the new world of competition.  As this transition plays out over the next
year or  two we will be challenged to be flexible and innovative.

During 1995 we made a number of decisions to better position ourselves in both
the new competitive electric utility business and the energy services business.
Some of these decisions had a negative impact on current earnings but we
believe they were in the best long-term interests of all stakeholders.  The
balance of this letter will summarize some of our key activities within our
Core Electric and Energy Related Businesses.

Consolidated earnings per share of $1.61 were 33% below the $2.41 per share
reported for the year 1994.  Consolidated net earnings were $32.6 million
versus $47.4 million in 1994. These decreases were driven primarily by two
unusual charges which amounted to $13.2 million or 66 cents per share.  These
charges are more fully discussed in "Management's Discussion and Analysis."  As
stated earlier, we believe that these actions were in the best long-term
interests of all stakeholders.

Your dividend was increased 3.9% - about double the electric utility average -
to an annual rate of $1.60.  This increase was consistent with our goal of
providing annual dividend increases above the industry average while
maintaining a conservative payout ratio.

CORE ELECTRIC BUSINESS    The Retail and Wholesale Business units that comprise
our Core Electric Business improved their 1995 earnings.  This improvement came
about despite a full year's impact of a reduction in electric rates to all
customers implemented in mid 1994 and a one-time after-tax charge of $2.7
million for a voluntary retirement incentive.  Consolidation of the Core
Electric Business under a single management team enabled us to continue our
practice of paring costs wherever possible without adversely affecting the
quality of our service.  As part of the consolidation, we were able to
reduce the number of professional personnel by 49 through a voluntary
retirement incentive.  Since 1990 we have reduced the workforce of our Core
Electric and Corporate Businesses by 20%.

Introduction of our Choice and Competition proposal for the restructuring of
the electric utility industry in Massachusetts and Rhode Island continued EUA's
proactive involvement in this most important issue.  The era of electric
utility competition is upon us!  Massachusetts and Rhode Island, the states
where our utility subsidiaries do business, are at the forefront of this
wave of industry reform.  Choice and Competition is predicated on a regional
approach to competition and envisions all customers in New England being able
to choose their electricity supplier.

ENERGY RELATED BUSINESS    The decision to sell EUA Cogenex's portfolio of
cogeneration installations was based on their poor financial performance and
resulted in a one-time after-tax charge of $10.5 million.  The sale enables our
most active non-utility energy related subsidiary to refocus itself for the
long term on the broader based, more profitable market for energy-efficiency
services and products.

     The EUA Cogenex refocusing includes a consolidation of marketing
activities designed to improve the "hit rate" of signed contracts from project
proposals.  In addition, new strategic alliances with major utilities in
Pennsylvania and Kansas will expand EUA Cogenex's field of operations to 11
additional states.

     Our agreement with Duke/Louis Dreyfus LLC to market energy and related
services throughout the six-state New England region provides us with the
opportunity to become a meaningful player in the competitive New England
marketplace as it develops.

     Two additional energy related opportunities in which we are investing also
show promise for the future.

     TransCapacity L.P. has developed software to be used by participants in
the gas industry. While we are disappointed that the progress of TransCapacity
slowed in 1995, we still believe this investment has the potential to
contribute positively to system earnings in the near future.

     The BIOTEN Partnership has developed a prototype bio-mass-fueled electric
generating unit which is currently going through its initial test phase.

     These two energy related opportunities represent relatively modest
investments with the potential for meaningful contributions to our earnings.
Our medium size means that an investment that contributes as little as $1
million to earnings represents 5 cents per common share.

WE PLAN TO SUCCEED    The unprecedented restructuring of the electric utility
industry will occupy a significant amount of our resources for the foreseeable
future.  However, it will not reduce the importance of our Energy Related
Business activities.

     The key to EUA's future success will continue to be pursuit of strategies
that will maximize the potential of each of our business units.

It is our intention to succeed!

We extend our thanks to our dedicated workforce who are being called upon each
day to do more with less.  We also thank you for your continued loyalty as
shareholders and assure you that we will provide our strongest efforts to
enhance the value of your investment.

"Picture of Donald G. Pardus Chairman and Chief Executive Officer"

"Picture John R. Stevens President and Chief Operating Officer"

Donald G.  Pardus
Chairman and Chief Executive Officer



John R. Stevens
President and Chief Operating Officer

March 8, 1996


BUSINESS AND STRATEGIES


COMPETITION.  COMPETITION.  COMPETITION.
 ... a word that has been synonymous with many industries for centuries... a
word that is sending shock waves through the electric utility industry today.

     At EUA we've operated in the competitive arena for ten years in the Energy
Related businesses we own. Whether one views the coming of competition in the
electric utility industry as the dawn of a bright new day or as thunder clouds
in the distance, the reality is that the age of utility competition is here.

     The approach of a competitive marketplace led us to adopt our current
Business Unit structure, a solid framework for the future.

     Our Core Electric Business includes two business units:
     Retail and Wholesale. These continue to be the foundation on which we
     build.

     Our Energy Related Business unit combines our energy related
     diversification efforts.  It provides us with the vehicle to invest in
     opportunities that can enhance shareholder value and provide non-utility
     synergies to our Core Electric Business.

     Our Corporate Business unit provides professional and technical services
     to all EUA System companies.  The remainder of this section briefly
     describes how EUA is taking a proactive position in the move to a
     competitive utility industry and the steps that have been taken at our
     Energy Related businesses in light of disappointing results in 1995.

AN INDUSTRY IN TRANSITION    There are many forces working toward a competitive
marketplace in the electric utility industry - federal and state regulators,
coalitions of utility stakeholders, state legislatures, as well as electric
utility companies.  EUA is taking a proactive stance in proposing principles
that move us towards competition, while keeping in mind the interests of our
shareholders, customers, employees and the communities we serve.

     Massachusetts and Rhode Island, the home states of our Core Electric
Business, are at the forefront of the charge to a competitive electric
industry.  While both states retain their individuality, the goal of regulators
and collaboratives of utilities and other industry stakeholders in each is the
same: negotiate the transition to competition rather than litigate.

     The move to competition is not being driven only at the state level.  The
Federal Energy Regulatory Commission, which regulates our Wholesale Business
unit, has been a primary catalyst by proposing new rules to require open access
to bulk power transmission lines.

     Eastern Utilities has participated from the start at both the federal and
state levels, and we'll continue our active role.  We reinforced our commitment
to establishing new relationships between service and energy providers and
customers by introducing our Choice and Competition plan for a competitive
industry.  Our proposal would put all utilities in New England on an equal
footing to compete head-to-head for power sales with each other and with other
market alternatives.

     By envisioning New England-wide participation, Choice and Competition
ensures access to all retail markets for all utilities and access to a variety
of energy sources for all customers.

     Key components of Choice and Competition include:

  -  Customer choice of supplier as early as 1998.

     Fossil-fueled and hydroelectric generating units enter the competitive
     arena without guaranteed cost recovery.

  -  Performance-based rates governing the distribution costs of delivering
     energy to customers.  The retail distribution companies would be measured
     against standards of performance and rewarded or penalized based on actual
     performance related to the standards.

  -  Open, equal access to transmission facilities consistent with FERC
     policies.

  -  Continued commitment to energy-efficiency and low-income programs.

  -  Competitively-priced power for customers who choose not to choose.  While
     we will do everything we can to spur competition, we accept the challenge
     of retaining our current customers with our traditional reliable service
     at the same time we actively pursue new business.

     These are but a few of our plan's highlights.  We suspect the final
outcome of the collaborative and/or legislative processes may not include all
of our recommendations, but we intend to be proactive throughout the transition
to a competitive electric industry.

     In positioning EUA for the future, our efforts have not been limited to
the changing regulatory environment.  We continue to look for innovative ways
in which Eastern Utilities can gain access to market share which today is
limited.  For example, our Retail Business unit customers represent only 4% of
the New England energy market.  Our challenge is how, in a competitive market,
we can gain access to the other 96%.  In December we agreed to form a joint-
venture with the Duke Energy subsidiary of Duke Power and the Louis Dreyfus
Group - Duke/Louis Dreyfus Energy Services (New England) - which, once all
regulatory authorizations are received, will provide the vehicle for us to
participate in the marketing of energy and other services to the other 96% of
New England.

     The new company should be ready to begin marketing electric power and
other energy services to customers throughout New England when competition
becomes a reality.  Initial efforts of Duke/Louis Dreyfus Energy Services (New
England) will focus on linking power buyers and sellers.  Over the longer term,
Duke/Louis Dreyfus Energy Services (New England) has the potential of
controlling - by buying, leasing or building - its own generating capacity.

     We believe our knowledge of the New England market, our activities with
the New England Power Pool, and our entrepreneurial skills within the region
combined with the trading skills of Louis Dreyfus and Duke Energy's skills in
developing and operating power plants make us a strong team, ready to play in
the competitive arena.

ENERGY RELATED COMPETITIVE IMPACTS    Competition is not new to our Energy
Related Business unit.  In fact, it was increased competition and changes in
the marketplace that had a negative impact on the financial results of the
Energy Related Business unit in 1995. The competitive market changes impacted
EUA Cogenex, our integrated energy services company, while a more demanding
marketplace negatively impacted EUA TransCapacity, our subsidiary that holds
an investment in a gas industry software developer.

     First, during 1995 EUA Cogenex saw continued poor results in its
cogeneration business, an erosion of utility-supported demand-side management
programs nationwide, and aggressive pricing pressures from competitors in the
energy management market.  The result was a disappointing year for our most
active Energy Related business.  Our challenge has been to refocus EUA Cogenex
for 1996 so that it can retain its position as one of the major energy services
companies in the country.

     Some of the steps EUA Cogenex has taken and will take as part of its
refocusing efforts include:

  -  Divest its cogeneration portfolio.  This action was completed in September
     1995 and resulted in a one-time after-tax $10.5 million reduction in
     consolidated net earnings.  Elimination of this underperforming portion of
     its business enables EUA Cogenex to concentrate on its more profitable
     energy-efficiency business.

  -  Concentrate on traditional markets.  EUA Cogenex will concentrate on
     market sectors where it has been most successful: private educational
     institutions, hospitals, medium and large industrial and commercial
     facilities. Sectors such as federal and state facilities and utility
     demand side management programs have been de-emphasized.

  -  Restructure sales and marketing.  Consolidate marketing activities and
     improve the success, or "hit rate," of turning proposals into signed
     contracts.

  -  Develop strategic alliances.  In 1995, such alliances were announced with
     Allegheny Power Systems and Western Resources.  These alliances are
     designed to provide EUA Cogenex with a significant presence in states
     where it historically has done little or no  business and provide
     customers of these utilities an immediate and comprehensive selection of
     integrated energy services.  A third strategic alliance with Monenco-Agra,
     a major provider of engineering and related services in Canada, awaits
     regulatory approval.

     These refocusing efforts should enable EUA Cogenex to enhance its
profitability and contribution to EUA system earnings in 1996.  Implementation
of its redefined strategies should firmly establish EUA Cogenex's leadership
position in its traditional markets while maintaining its strong reputation
for customer service.

     A second segment of EUA's Energy Related business is our interest in the
TransCapacity Limited Partnership, held by our EUA Energy Investment
subsidiary. TransCapacity is a gas industry software developer in which we
started making investments in 1993.  The software, known as Capacity Scout TM,
was designed to computerize the gathering and distribution of millions of
pieces of natural gas pipeline capacity data needed to be competitive in
the gas industry.

     We had expected our investment in TransCapacity to produce positive
financial results in 1995, but developing market hurdles slowed the progress of
this venture.  The market indicated that providing data alone was not
sufficient to entice users to utilize the Capacity Scout TM system.  The market
dictated that enhancements that had been planned for the future would be needed
immediately in order to entice users.  In addition, pipeline companies, the
providers of much of the information, have been slow to fully implement FERC-
mandated standards.

     In response to these market pressures, TransCapacity increased its
activity at the Gas Industry Standards Board (GISB) to develop standard data
and has now introduced its new T/Nominatr TM service.  T/Nominatr TM enables
clients to better use their pipeline capacity by providing a single interface
for making electronic data interchange nominations, or notifications to move
gas, to multiple pipelines.  Pre-commercial user testing of T/Nominatr TM
started in late 1995.  Commercial installations began in the first quarter of
1996.  T/Nominatr TM should provide TransCapacity with a distinct advantage
over its competition.

     While we do not anticipate that TransCapacity will make a positive
contribution to EUA earnings for the full year in 1996 we believe it is
possible for its monthly contribution to be positive by year's end.
TransCapacity continues to have the potential of being a meaningful contributor
to EUA earnings in 1997 and beyond.

     Finally, EUA Energy Investment also has a 40% ownership interest in the
BIOTEN Partnership.  Test generation will begin in early 1996 at a prototype
biomass-fired combustion turbine generating unit being developed in Tennessee.
Additional investments in this venture are dependent upon the success of the
prototype, which will not only generate electricity but also help alleviate an
environmental disposal problem.  The preliminary nature of this undertaking
makes assessment of long-term earnings potential premature.

     Diversification will continue to play a significant role in EUA's future
financial success.  The long-term goals of our Energy Related Business unit are
to provide an increasing percentage of EUA System earnings, maintain EUA
Cogenex's leadership in the energy services industry, and investigate and
develop new energy related business opportunities that will enhance shareholder
value.

WE PLAN TO SUCCEED IN THE COMPETITIVE WORLD    EUA has already come far in the
metamorphosis from utility holding company to diversified energy services
company.

     We have positioned our Core Electric Business to be a positive force in
the development of a competitive electric industry, and we will continue to
search out niche-type energy related investments to support our non-core
diversification efforts.  The goal of these efforts is to strengthen our
position in the marketplace and sharpen our competitive edge.

     Our emergence as a leader in diversified energy services gives us the
opportunity to offer our customers a variety of energy options and to provide
you, our shareholders, enhanced value for your EUA shares.

<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL DATA
Years Ended December 31,
(In Thousands Except Common Share Data)   1995        1994       1993       1992        1991
<S>                                   <C>          <C>          <C>             <C>
INCOME STATEMENT DATA:
 Operating Revenues                 $   563,363 $   564,278 $   566,477 $   541,964 $   522,583
 Operating Income                        71,728      73,795      75,649      64,347      66,336
 Consolidated Net Earnings(1)            32,626      47,370      44,931      34,111      26,260

BALANCE SHEET DATA:
 Plant in Service                     1,037,662   1,020,859   1,016,453   1,002,717     990,726
 Construction Work in Progress            7,570       8,389       8,728       4,943       6,881
    Gross Utility Plant               1,045,232   1,029,248   1,025,181   1,007,660     997,607
 Accumulated Depreciation and
      Amortization                      324,146     304,034     296,995     274,725     251,503
      Net Utility Plant                 721,086     725,214     728,186     732,935     746,104
   Total Assets                       1,200,273   1,234,049   1,203,137   1,203,320   1,163,776

CAPITALIZATION:
  Long-Term Debt - Net                  434,871     455,412     496,816     462,958     488,452
  Redeemable Preferred Stock - Net       26,255      25,390      25,053      28,496      29,980
  Non-Redeemable Preferred Stock - Net    6,900       6,900       6,900      15,850      15,850
  Common Equity                         375,229     365,443     333,165     266,855     248,598
     Total Capitalization               843,255     853,145     861,934     774,159     782,880
  Short-Term Debt                        39,540      31,678      37,168     109,936      72,449

COMMON SHARE DATA:
 Consolidated Earnings per Average
      Common Share(1)               $      1.61 $      2.41 $      2.44 $      2.00 $      1.58
Average Number of Shares Outstanding 20,238,961  19,671,970  18,391,147  17,039,224  16,608,090
   Return on Average Common Equity          8.8%       13.6%       15.0%       13.2%       10.8%
   Market Price -High                        25          27 3/8      29 7/8       25 1/4     25
                -Low                         21 1/2      21 3/8      23 7/8       20 3/8     15 3/4
                -Year-End                    23 5/8      22          28           24 3/4     20 5/8
   Dividends Paid per Share         $     1.585  $    1.515  $     1.42  $      1.36 $     1.45


(1) See Management's Discussion and Analysis of Financial Condition and Results of Operations for
    details of one-time impacts to earnings.
</TABLE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND REVIEW OF
OPERATIONS

Net Earnings and Earnings Per Share by business unit for 1995 and 1994 were as
follows:

                                       1995                  1994
                              Net                       Net
                              Earnings   Earnings     Earnings    Earnings
                              (Loss)     (Loss)       (Loss)      (Loss)
                              (000's)    Per Share    (000's)     Per Share
Core Electric Business       $ 42,062    $ 2.08       $  36,897   $  1.88
Energy Related Business         3,658      0.18           7,390      0.37
Corporate                         151      0.01            (817)    (0.04)
From Operations              $ 45,871    $ 2.27       $  43,470   $  2.21
One-Time Impacts:
VRI                            (2,747)    (0.14)
Cogen Discontinuance          (10,498)    (0.52)
Tax Credits                     3,900      0.20
Consolidated                 $ 32,626    $ 1.61       $  47,370   $  2.41

Major impacts on earnings by business unit are described in the following
paragraphs.

VOLUNTARY RETIREMENT INCENTIVE (VRI) OFFER   In March 1995, Eastern Utilities
Associates (EUA) announced a corporate reorganization which, among other
things, consolidated management of Eastern Edison Company (Eastern Edison),
Blackstone Valley Electric Company (Blackstone) and Newport Electric
Corporation (Newport).  As part of the reorganization, a VRI was offered to
66 professionals of the EUA System.  Forty-nine of those eligible for the
program accepted the incentive and retired effective June 1, 1995.  This
incentive program resulted in a one-time $4.5 million pre-tax ($2.7 million
after-tax, or 14 cents per share) charge to second quarter 1995 earnings of the
Core Electric Business.  The estimated payback period is approximately 18
months.

DISCONTINUATION OF COGENERATION OPERATIONS   In September 1995, EUA announced
that EUA Cogenex Corporation (EUA Cogenex) was discontinuing its cogeneration
operations because overall, the cogeneration portfolio had not performed up to
expectations.  EUA Cogenex's total net investment in its cogeneration portfolio
was $29.2 million.  The decision to discontinue cogeneration operations
resulted in a one-time, after-tax charge of approximately $10.5 million, or 52
cents per share, to third quarter 1995 earnings.

NON-RECURRING TAX CREDITS    In 1994 EUA Ocean State Corporation (EUA Ocean
State) recognized $3.9 million of Investment Tax Credits (ITC) related to its
investment in Ocean State Power (OSP).  In 1993 EUA recognized income of
approximately $4.9 million, representing a portion of the expected utilization
of EUA Power Corporation's (now known as Great Bay Power Corporation) ITC to
reduce EUA's 1993 consolidated tax liability.  These credits, for both years,
are included in Other Income and Deductions-Net on the "Consolidated Statement
of Income."  The System has no remaining ITC carryforwards available.

OPERATING REVENUES   The following table sets forth estimates of the factors
which contributed to the change in Operating Revenues from 1993 through 1995:

                                                 Increase (Decrease)
                                                 From Prior Years
($ in millions)                                    1995    1994
Operating Revenue change attributable to:
Core Electric Business:
     Purchased Power Recovery                    $ (2.5)   $ (8.0)
     Recovery of Fuel Costs                        11.8      (1.4)
     Effect of Rate Changes                        (4.9)     (6.4)
     Unit Contracts and Sales to NEPOOL            (8.2)      1.8
     Kilowatthour (KWH) Sales and Other            (2.1)      4.2
Energy Related Business:
     EUA Cogenex                                    5.0       7.6
Total                                            $ (0.9)   $ (2.2)

Core Electric Business:  The revenues attributable to Purchased Power Recovery
reflect our retail companies' recovery of purchased power capacity costs.

     Revenues attributable to Recovery of Fuel Costs result from the operation
of fuel adjustment clauses.  The change in such revenues reflects corresponding
underlying changes in fuel costs.

     The Effect of Rate Changes reflects a base rate decrease for Montaup
Electric Company (Montaup) implemented on May 21, 1994.

     Revenues attributable to Unit Contracts and sales to the New England Power
Pool (NEPOOL) reflect revenues from such short-term contracts and interchange
sales with NEPOOL.

     The change in revenues associated with KWH Sales and Other reflects the
effect of KWH sales on base revenues and changes in other operating revenues
including conservation and load management (C&LM) expense recoveries.

Energy Related Business:  Revenues of this business unit were generated
entirely by EUA Cogenex.  The 1995 change is due primarily to the impact of EUA
Cogenex's acquisitions of Highland Energy Group (Highland) and Citizens
Conservation Corporation (Citizens) in 1995. See "Energy Related Businesses"
below.

     The 1994 increase of $7.6 million was due primarily to increased revenues
of James L. Day Co. Inc., renamed EUA Day and Northeast Energy Management, Inc.
(NEM) aggregating approximately $8.5 million.  EUA Cogenex acquired EUA Day and
NEM in December 1993 and January 1994, respectively.  Partnership revenues and
paid-from-savings contract revenues also increased in 1994.  These increases
were offset somewhat by a decline in project sales revenues recognized in 1994.

CORE ELECTRIC BUSINESS KWH SALES   Primary KWH sales of electricity by EUA's
Core Electric Business unit increased by a modest 0.7% in 1995 compared to
1994.  A 2.0% improvement in 1995 industrial sales is an indication of the
continued slow improvement in economic conditions in EUA's service territory.
Economic indicators suggest that this moderate trend will continue for the
foreseeable future. Total energy sales decreased 11.1% in 1995, due mainly to
decreased energy sales to NEPOOL and decreased short-term unit contract
sales.  Purchased power contracts of Montaup totaling 41 MW which expired in
October 1994 resulted in lower KWH available to Montaup for interchange and
short-term energy sales.  These interchange and short-term energy sales
essentially recover fuel costs only and have little or no earnings impact.

     Total primary sales of electricity increased 1.3% in 1994, despite the
fourth quarter's mild weather which caused an 18.7% decrease in heating degree
days compared to those of the fourth quarter 1993.  An on-going review of our
customer classes resulted in the reclassification of certain customers from the
commercial class to the residential and industrial classes in 1994.  The impact
of these reclassifications is reflected in the following table.  Removing
the impacts of these reclassifications results in 1994 sales increases of 1.1%,
0.6% and 3.0% to our residential, commercial and industrial customers,
respectively.

Percentage Changes in KWH Sales by Class of Customer for the past two years
were as follows:

                                                Percent
                                             Increase (Decrease)
                                             From Prior Year
                                              1995   1994
Residential                                   1.1     3.3
Commercial                                    0.2    (1.9)
Industrial                                    2.0     4.2
Other Electric Utilities                      1.4    20.4
Other                                        (5.7)   (7.0)
Total Primary Sales                           0.7     1.3
Losses and Company Use                       (2.6)   (5.3)
Total System Requirements                     0.5     1.0
Unit Contracts                              (59.8)   20.2
Total Energy Sales                          (11.1)    4.2


EXPENSES 1995 VS. 1994

Fuel and Purchased Power:  The EUA System's most significant expense items
continue to be fuel and purchased power expenses of our Core Electric Business
which together comprised about 43.9% of total operating expenses for 1995.

     Fuel expense of the Core Electric Business increased by $3.3 million, or
3.8%, in 1995 compared to 1994.  This change was caused by a 14.1% increase in
the average cost of fuel, offset by an 11.1% decrease in total energy generated
and purchased, as discussed above.  Also, purchased power-energy costs,
previously recorded as purchased power expense by Newport, were recorded as
fuel expense by Montaup as a result of Newport becoming an all-requirements
customer of Montaup effective May 21, 1994.  This resulted in a classification
adjustment which increased fuel expense and decreased purchased power expense
by approximately $1.8 million in 1995.

     Purchased Power demand expense for 1995 decreased $4.5 million, or 3.4%.
This change was due primarily to decreases of $6.7 million related to 41
megawatts (MW) of purchased power contracts which expired in October 1994 and
the classification adjustments discussed above. These decreases were partially
offset by increased billings from OSP and the Yankee nuclear units aggregating
$5.2 million.

Other Operation and Maintenance:  Other Operation and Maintenance (O&M)
expenses for 1995 totaled $187.4 million, an increase of $2.9 million, or 1.6%,
over 1994.

     Total O&M expenses are comprised of three components:
Direct Controllable, Indirect and Energy Related.  Changes in these components
for 1995 were as follows:

                                                      Increase
($ in millions)                     1995     1994     (Decrease)
Direct Controllable              $   83.4  $  87.7    $  (4.3)
Indirect                             41.3     46.7       (5.4)
Energy Related                       62.7     50.1       12.6
   Total O&M                      $ 187.4  $ 184.5    $   2.9

     Direct Controllable expenses of our Core Electric and Corporate Business
units represent 44.5% of total 1995 O&M and include expense items such as:
salaries, fringe benefits, insurance and maintenance.  Indirect expenses
include items over which we have limited short-term control.

     Indirects include such expense items as:  O&M expenses related to
Montaup's joint ownership interests in generating facilities such as Seabrook
Unit 1 and Millstone Unit 3 (see Note H of Notes to Consolidated Financial
Statements for other jointly-owned units), power contracts where transmission
rental fees are fixed, C&LM expenses that are fully recovered in revenues, and
expenses related to accounting standards such as Statement of Financial
Accounting Standard No. 106, "Accounting for Post-Retirement Benefits Other
Than Pensions" (FAS 106).

     The Energy Related component relates to O&M expenses of our Energy Related
Business unit where increases are tied to new and expanded business activity.
EUA Cogenex continues to be the most active of our Energy Related businesses
and incurred 93% of the total O&M expenses of this business unit in 1995.

     The changes in 1995 O&M expenses were due primarily to the following:

Direct Controllable:  Direct controllable expenses of our Core Electric and
Corporate Business units decreased by $4.3 million.  One-time computer software
development and hardware buy-out costs aggregating $1.9 million expensed in
1994, decreased insurance expense of approximately $1.2 million and strict
attention to cost control were major components of that change.  We reduced
our Core Electric and Corporate units' workforce level by 6.9% in 1995 which
will mitigate future labor cost increases.  We remain committed to our efforts
to control costs wherever possible.

Indirect:  Indirect expenses of the Core Electric and Corporate Business units
decreased $5.4 million due primarily to $4.2 million of decreased C&LM expense
and lower litigation expense.

Energy Related:  EUA Cogenex's O&M expenses for 1995 increased by $10.4 million
and are directly related to increased revenues, the acquisition of Citizens and
Highland and costs related to new product development of the EUA Day division.
Operating and development expenses of EUA Energy Investment Corporation (EUA
Energy) increased $2.2 million in 1995 due primarily to development expenses
related to the discontinued Home and Family venture and operating costs of EUA
Transcapacity.

Interest Charges:  Net interest charges for 1995 decreased approximately $2.3
million compared to 1994.  This change was due primarily to decreased long-term
debt interest resulting from normal cash sinking fund payments, increases in
capitalized interest of EUA Cogenex related to increased construction
activity in 1995, and decreased Other Interest Expense.  Other Interest Expense
in 1994 included approximately $1.0 million related to Internal Revenue Service
audits of prior years' consolidated income tax returns.

Income Taxes:  EUA files a consolidated federal income tax return for the EUA
System.  EUA's 1995 composite federal and state effective tax rate was
approximately 30.1%, versus 29% in 1994.  In 1994 EUA Ocean State recognized
$3.9 million of ITC as previously discussed.

Taxes Other Than Income:  Taxes other than income decreased $3.6 million in
1995 compared to 1994.  The 1995 reversal of previously over-accrued property
taxes and lower Rhode Island gross receipts taxes, related to lower revenues
and a decrease in the gross receipts tax rate, account for most of this change.

Other Items:  Depreciation and Amortization expense decreased by $1.0 million,
or 2.1%, in 1995. Decreased EUA Cogenex depreciation and amortization expense
resulting from the disposal of cogeneration assets was the primary factor.

     Other Income (Deductions) - Net decreased by $4.3 million in 1995 from
1994.  The 1994 amount included: (i) ITC recognized by EUA Ocean State of
approximately $3.9 million as previously discussed; (ii) a settlement of
$900,000 received in 1994 from the Vermont Electric Generation and Transmission
Cooperative, Inc. (Vermont Co-op) related to Seabrook Nuclear Project payments
previously withheld; and (iii) the 1994 income recognition of $900,000 of
capitalized costs related to nuclear fuel buyouts which were previously
deferred. EUA Cogenex interest income and management fee income increased by
approximately $1.1 million in 1995.


EXPENSES 1994 VS. 1993

Fuel and Purchased Power:  Fuel expense for 1994 increased $2.4 million from
1993 due primarily to fuel expense previously recorded as purchased power-
demand expense by Newport as previously discussed.  A 4.8% decrease in the
average cost of fuel in 1994 essentially offset the 4.2% increase in total
energy sales.

    Purchased Power expense decreased from 1993 by $9.4 million, or 6.8%.  This
decrease was due primarily to expiring contracts totaling approximately 41 MW,
lower billings by Montaup's suppliers aggregating approximately $8.6 million
and the recognition of purchased power-energy as fuel expense (see above).
These decreases were offset somewhat by a $1.0 million increase in C&LM
expenses recorded as purchased power expense.

Other Operation and Maintenance: O&M expenses for 1994 totaled $184.5 million,
an increase of $2.4 million over 1993.

     Changes by O&M components for 1994 were as follows:

                                                           Increase
($ in millions)                          1994      1993   (Decrease)
Direct Controllable                  $  87.7  $   86.0   $  1.7
Indirect                                46.7      47.1     (0.4)
Energy Related                          50.1      49.0      1.1
   Total O&M                         $ 184.5   $ 182.1   $  2.4

     The changes in 1994 O&M expenses were due primarily to the following:

Direct Controllable:  Direct controllable expenses increased by $1.7 million in
1994 due to our decision to expense one-time computer software development and
hardware buy-out costs aggregating $1.9 million.  Cost control efforts
continued to be successful in 1994, and we reduced our Core Electric workforce
by 6.0%.

Indirect:  Indirect expenses decreased slightly in 1994 due to the offsetting
impacts of decreased jointly owned generating unit expenses and pension
expenses aggregating $3.8 million and increased FAS 106, C&LM and power
contract expenses totaling $3.2 million.

Energy Related:  EUA Cogenex's O&M expenses for 1994 increased by $1.7 million.
This increase was due primarily to the operations of EUA Day and NEM offset by
a reduction in expenses related to lower project sales recognized in 1994.
Research and development expenses of EUA Energy decreased $700,000 in 1994.
Interest Charges:  Interest on long-term debt for 1994 decreased approximately
$2.5 million, or 6.1%, compared to 1993.  This decrease was due primarily to
the full year impact of Eastern Edison's 1993 refinancing of $195 million of
long-term debt at lower rates and Newport's January 1994 issuance of $7.9
million of variable rate Electric Energy Facilities Revenue Refunding Bonds due
2011.

     Offsetting these declines somewhat was the issuance by EUA Cogenex of $50
million of 7% Unsecured Notes in October 1993.

Income Taxes:  EUA's 1994 composite federal and state effective tax rate was
approximately 29%, versus 27.3% in 1993.  This increase is primarily
attributable to the net decrease in the income recognition of ITC in 1994
versus 1993.

Other Items:  Depreciation and Amortization expense increased by $1.7 million,
or 3.9%, in 1994.   Increased EUA Cogenex depreciation and amortization expense
of $2.4 million was offset somewhat by a decrease in amortization expense of
Montaup related to its Seabrook Unit II loss amortization which was completed
in 1993.  The EUA Cogenex increase was due primarily to the
operations of EUA Day and NEM.

     Equity in Earnings of Jointly Owned Companies decreased in 1994 by
approximately $1.7 million due primarily to lower earnings on EUA Ocean State's
investment in OSP.

     Other Income (Deductions) - Net increased by $3.2 million in 1994 due to:
(i) a decrease in tax expense recorded as other deductions of approximately
$1.6 million; (ii) increased EUA Cogenex interest income and management fee
income aggregating approximately $900,000; (iii) the $900,000 Vermont Co-op
settlement as previously discussed; and (iv) the 1994 income recognition of
$900,000 of capitalized costs previously discussed.  These impacts were
partially offset by a net decrease of $1.0 million in ITC utilized in 1994
versus 1993.

     The Preferred Dividend requirement of the retail subsidiaries decreased by
approximately $1.0 million, or 29.6%, in 1994 due to a full-year impact of
Eastern Edison's 1993 Preferred Stock financing activity.

1995 SYSTEM FINANCING ACTIVITY

Core Electric Business:  On December 1, 1995, Eastern Edison used available
cash to fund maturities of $10 million of First Mortgage Bonds and $25 million
of unsecured Medium Term Notes.

Corporate:  EUA received proceeds of approximately $6.0 million in 1995 from
the issuance and sale of 262,115 common shares primarily through its Dividend
Reinvestment and Common Share Purchase Plans.

     In May 1995 EUA issued 176,258 common shares in connection with the
acquisition of Highland Energy Group, Inc. by EUA Cogenex.  See "Energy Related
Businesses" below for more details.

"Bar Graph Depicting Cash Construction Expenditures and Internally Generated
Funds for the Years 1991 Through 1995 as follows: "

$ in Millions
                                    1991    1992      1993    1994   1995

Cash Construction expenditures      57.57   71.365   76.391   50.519  77.922
Internally Generated Funds         63.681   48.933   79.691   79.274  90.883


Financial Condition and Liquidity:  The EUA System's need for permanent capital
is primarily related to investments in facilities required to meet the needs of
its existing and future customers.

Core Electric Business:  For 1995, 1994 and 1993, the Core Electric Business
cash construction expenditures were $31.5 million, $33.0 million and $32.4
million, respectively.

Internally generated funds available after the payment of dividends supplied
approximately 210%, 150% and 160% of these cash construction requirements in
1995, 1994 and 1993, respectively.  Various laws, regulations and contract
provisions limit the use of EUA's internally generated funds such that the
funds generated by one subsidiary are not generally available to fund the
operations of another subsidiary.

     Cash construction expenditures of the Core Electric Business for 1996,
1997 and 1998 are estimated to be approximately $38.3 million, $35.3 million
and $28.8 million, respectively and are expected to be financed with internally
generated funds.

     In addition to construction expenditures, projected requirements for
scheduled cash sinking fund payments and mandatory redemption of securities of
the Core Electric Business in 1996, 1997, 1998, 1999 and 2000 are $9.3 million,
$2.3 million, $62.2 million, $11.6 million and $2.3 million, respectively.

Energy Related Business:  Capital expenditures of our Energy Related Business
amounted to $44.7 million, $17.2 million and $43.6 million in 1995, 1994 and
1993, respectively.  Internally generated funds supplied 68.8%, 111.9% and
29.6% of cash capital requirements in 1995, 1994 and 1993, respectively.

     Estimated capital expenditures of the Energy Related Business are $42.8
million, $58.3 million and $64.3 million in 1996, 1997 and 1998, respectively.
Internally generated funds are expected to supply approximately 60% of 1996
estimated capital requirements.  Continued growth at EUA Cogenex may require
some external financing in the 1997-1998 time frame.

     In addition to capital expenditures and energy related investments,
projected requirements for scheduled cash sinking fund payments and mandatory
redemption of securities of the Energy Related Business in 1996, 1997, 1998,
1999 and 2000 are $9.2 million, $24.2 million, $9.2 million, $9.2 million and
$59.2 million, respectively.

Corporate:  Construction activity of the Corporate Business unit is minimal.
Projected requirements for scheduled cash sinking fund payments for the
corporate operations for each of the five years following 1995 are $1.1
million.

Short-Term Lines of Credit:  At December 31, 1995, EUA System companies
maintained short-term lines of credit with various banks aggregating
approximately $150 million.

Year-End Short-Term Debt Outstanding by business unit:

($ in thousands)                     1995     1994
Core Electric Business           $  6,761  $      0
Energy Related Business            14,421    23,476
Corporate                          18,358     8,202
    Total                        $ 39,540  $ 31,678

     EUA expects to repay the outstanding balances of short-term indebtedness
through internally generated funds and the possible issuance of additional EUA
Cogenex debt securities.

ENERGY RELATED BUSINESSES   Net Earnings and Earnings Per Share contributions
of EUA's Energy Related Businesses for 1995 and 1994, excluding one-time
impacts, were as follows:

                                     1995                   1994
                              Net                    Net
                              Earnings    Earnings   Earnings    Earnings
                              (Loss)      (Loss)     (Loss)      (Loss)
                              (000's)     Per Share  (000's)     Per Share
EUA Cogenex                  $  2,704(1)  $  0.13(1) $  4,171    $ 0.21
EUA Ocean State                 4,617        0.23       4,456(2)   0.22(2)
EUA Energy Investment          (3,663)      (0.18)     (1,237)    (0.06)
Energy Related Business      $  3,658     $  0.18    $  7,390    $ 0.37

(1) Excludes one-time charge of $10.5 million, or 52 cents per share, related
    to discontinuance of cogeneration operations.

(2) Excludes one-time recognition of $3.9 million, or 20 cents per share, of
     Investment Tax Credits.

EUA Cogenex:  EUA Cogenex's earnings from continuing operations decreased by
approximately $1.5 million in 1995 due to, among other things, lower earnings
on project sales and costs related to new product development by its EUA Day
division.  Also, 1995 saw a significant reduction in demand-side management
activity as electric utilities nationwide prepare themselves for the evolution
to a competitive marketplace.  The discontinuance of its cogeneration
operations will allow EUA Cogenex to devote maximum resources to providing
integrated energy services.  In addition EUA Cogenex has refocused its national
sales force toward the private sector.  Though governmental projects, such as
the Department of Energy, have proven profitable for EUA Cogenex, securing such
contracts is significantly more cumbersome, time consuming, and costly than
private sector contracts.

     EUA Cogenex implemented various strategies in 1995 designed to leverage
existing resources to broaden its markets, to reduce costs, and to bring new
products to market.  These efforts will continue in 1996.  Specifically, EUA
Cogenex will continue to develop its sales and marketing organization, evaluate
and enter into strategic alliances, and emphasize cost control.

     In early 1995, EUA Cogenex completed its acquisitions of Highland Energy
Group, Inc. of Boulder, Colorado, and the principal energy services operations
of Citizens Conservation Corporation of Boston.  Highland engages in
conservation and energy management programs principally in Colorado, Texas,
Ohio and North Carolina.  The renamed EUA Citizens Conservation Services
provides energy management services to the public and private multi-family
housing sector.  Also in 1995, EUA Cogenex announced joint ventures with
affiliates of the Allegheny Power System and Western Resources, Inc. to provide
energy services in and around the geographic regions served by those companies.
In early 1996, EUA Cogenex announced a proposed joint venture with Monenco-Agra
of Canada to provide similar services in Canada.

EUA Ocean State:  EUA Ocean State owns 29.9% of each of the partnerships which
developed and operate Units I and II of OSP, twin 250-megawatt, gas-fired
generating units in northern Rhode Island.  Both units have provided a premium
return since their respective in-service dates of December 31, 1990, and
October 1, 1991.  The change in EUA Ocean State's earnings contribution, net
of the $3.9 million of ITC utilized in 1994, was minimal.

EUA Energy Investment:  EUA Energy was organized to seek out investments in
energy related businesses.  The 1995 results reflect an increase in operating
and development expenses versus 1994, in particular, expenses related to the
Home and Family, L.P. pilot program, operating expenses of EUA Transcapacity,
and development costs of BIOTEN's biomass-fired combustion turbine electric
generation system.  Market analysis results of the Home and Family pilot
program led management to discontinue that venture in mid 1995.

POWER MARKETING    In December 1995, EUA and Duke/Louis Dreyfus LLC signed an
agreement to form a company to market energy related services in New England.
The new entity - Duke/Louis Dreyfus Energy Services (New England) LLC - plans
to engage in electric power and fuels marketing and associated market hedges;
own or lease generating facilities; and participate in other energy related
activities such as energy-efficiency services and management of energy assets,
upon receipt of required regulatory authorizations.  This partnership
will give EUA the opportunity to increase its share of New England's energy
market.

ELECTRIC OPERATIONS   The 1995 peak demand for electricity, 931 MW on July 27,
1995, surpassed the previous all-time high, 921 MW, set in July 1994.  Current
forecasts indicate that the combination of company owned generation, current
long-term purchased power contracts, expected short-term power opportunities,
and the System's C&LM programs, should meet EUA System capacity requirements
through the year 1999.  As shown in the accompanying chart the EUA System's
fuel mix continues to be diverse and is projected to remain that way in the
future.

"Three Pie Charts Depicting EUA Fuel Mix for the Years 1990, 1995, and
estimated 2000 as follows: "

              1990      1995        2000

Oil            38%       25%        21%
Gas             2%       27%        29%
Coal           22%       15%        13%
Nuclear        38%       28%        33%
Other                     5%         4%


     The EUA System offers customers a comprehensive group of C&LM programs.
These programs provide EUA with a flexible, cost-effective resource option,
while serving customers with valued cost control opportunities to develop and
maintain a competitive advantage.  The programs also offer opportunities to
EUA and its customers to comply with environmental standards and reduce air
emissions.

     During 1995, more than 19,000 customers participated in one or more of the
EUA System C&LM programs, resulting in 27,000 megawatthours of annual energy
savings.  In addition, the programs reduced customers' demand by 6,000
kilowatts in 1995 and provided the long-term benefits of reducing the need to
invest in costly new generating facilities.

ELECTRIC UTILITY INDUSTRY RESTRUCTURING   The electric industry is in a period
of transition from a traditional rate-regulated environment to a competitive
marketplace.  While competition in the wholesale electric market is not new,
electric utilities now face impending competition in the retail sector.

     In 1995, Eastern Edison, Blackstone and Newport participated with
collaborative groups in their respective states consisting of other utilities,
industrial users, environmental groups and consumer advocates in submitting
similar sets of interdependent principles addressing electric utility industry
restructuring to their respective state regulatory commissions.  These filings
were intended to be statements of the consensus position by the signatories of
the principles that should underlie any electric industry restructuring
proposal and include but are not limited to principles addressing stranded cost
recovery, unbundling of services and demand side management programs.  Each set
of principles was submitted on the condition they be approved in full by the
respective Commissions.

     The Rhode Island Public Utilities Commission (RIPUC) accepted all but one
of the principles submitted by the Rhode Island Collaborative with minor
modifications to certain language in others and added a new principle which
supports negotiation (as opposed to litigation) to resolve conflicts as
restructuring moves forward.  The RIPUC also directed the Rhode Island
Collaborative to proceed with negotiations on the issues presented in the
principles and to submit a progress report to the RIPUC, which was submitted in
February of 1996.  The one principle that was not accepted provided for
subsidization of renewable energy sources.

     In February 1996 a bill was introduced in the Rhode Island legislature
that, if enacted, would allow customer choice of electricity supplier
commencing January 1, 1998 for large industrial customers and phasing in all
customers by January 1, 2001.  The proposed legislation also provides for
recovery of "stranded investments" through a transition charge initially set
at 3 cents per KWH.

     EUA believes that the development of the proposed legislation should have
been conducted in a public forum so that all interested stakeholders could have
participated.  EUA believes that competition, if done right, can benefit
customers.  However, there are substantial issues about the proposed
legislation which EUA is currently reviewing.

The Massachusetts Department of Public Utilities (MDPU) issued an order
enumerating principles, similar to those submitted by the Massachusetts
Collaborative, that describe the key characteristics of a restructured electric
industry and provide for, among other things, customer choice of electric
service providers, services, pricing options and payment terms, an opportunity
for customers to share in the benefits of increased competition, full and fair
competition in the generation markets and incentive regulation for distribution
services where competition cannot exist.  This order sets out principles for
the transition from a regulated to a competitive industry structure and
identifies conditions for the transition process which will require investor-
owned utilities to unbundle rates, provide consumers with accurate price
signals and allow customers choice of generation services.  The order also
provides for the principle of recovery of net, non-mitigable stranded costs by
investor-owned utilities resulting from the industry restructuring.

     Each Massachusetts investor-owned utility is required to file
restructuring proposals for moving from the current regulated industry
structure to a competitive generation market.  The schedule for the filing
requirement is staggered.  The initial group of utilities was required to file
their proposals in February 1996.  The second group is required to file within
three months of the MDPU's orders on the first group of submissions.  Eastern
Edison Company filed its proposal, Choice and Competition (see below) with the
first group of proposals and is awaiting MDPU review.

     In January 1996, EUA unveiled its preliminary proposal for a restructured
electric utility industry called Choice and Competition and began discussions
with the Rhode Island and Massachusetts Collaboratives.  The plan proposes,
among other things: choice of power supplier by all customers as early as
January 1998; open access transmission services; performance based rates for
electric distribution services; all utility generation competing for power
sales; and a transition charge allowing regional utilities the opportunity to
recover, among other things, the costs of past commitments to nuclear and
independent power.  We believe the plan, which requires participation by all
New England parties, satisfies the principles adopted in both Rhode Island and
Massachusetts, and provides a fair and equitable transition to a competitive
electric utility marketplace for all parties.

     Historically, electric rates have been designed to recover a utility's
full costs of providing electric service including recovery of investment in
plant assets.  Also, in a regulated environment, electric utilities are subject
to certain accounting rules that are not applicable to other industries.  These
accounting rules allow regulated companies, in appropriate circumstances, to
establish regulatory assets and liabilities, which defer the current financial
impact of certain costs that are expected to be recovered in future rates.  EUA
believes that its Core Electric operations continue to meet the criteria
established in these accounting standards.  Effects of legislation and/or
regulatory initiatives or EUA's own initiatives such as Choice and Competition
could ultimately cause EUA's Core Electric companies to no longer follow these
accounting rules.  In such an event, a non-cash write-off of regulatory assets
and liabilities could be required at that time.

     In addition, if legislative or regulatory changes and/or competition
result in electric rates which do not fully recover the company's costs, a
write-down of plant assets could be required pursuant to Financial Accounting
Standard No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of" (FAS 121) issued in March 1995,
effective for fiscal year 1996.  See "Notes to Consolidated Financial
Statements," Note A, for further discussion of FAS 121.

ENVIRONMENTAL MATTERS   EUA's Core Electric Business subsidiaries and other
companies owning generating units from which power is obtained are subject,
like other electric utilities, to environmental and land use regulations at the
federal, state and local levels.  The federal Environmental Protection Agency
(EPA), and certain state and local authorities, have jurisdiction over releases
of pollutants, contaminants and hazardous substances into the environment and
have broad authority to set rules and regulations in connection therewith,
such as the Clean Air Act Amendments of 1990, which could require installation
of pollution control devices and remedial actions.  In 1994, EUA instituted an
environmental audit program to ensure compliance with environmental laws and
regulations and to identify and reduce liability.

     Because of the nature of the EUA System's business, various by-products
and substances are produced or handled which are classified as hazardous under
the rules and regulations promulgated by such authorities.  The EUA System
generally provides for the disposal of such substances through licensed
contractors, but these statutory provisions generally impose potential joint
and several responsibility on the generators of the wastes for clean-up costs.
Subsidiaries of EUA have been notified with respect to a number of sites where
they may be responsible for such costs, including sites where they may have
joint and several liability with other responsible parties.  It is the policy
of the EUA System companies to notify liability insurers and to initiate
claims.  However, EUA is unable to predict whether liability, if any, will be
assumed by, or can be enforced against, the insurance carrier in these matters.

     As of December 31, 1995, the EUA System had incurred costs of
approximately $4.6 million in connection with these sites.  These amounts have
been financed primarily by internally generated cash.  The EUA System is
currently amortizing substantially all of its incurred costs over a
five-year period consistent with prior regulatory recovery periods and is
recovering certain of those costs in rates.

     EUA estimates that additional costs of up to $3.0 million may be incurred
at these sites through 1997 by its subsidiaries and the other responsible
parties.  Estimates beyond 1997 cannot be made since site studies, which are
the basis of these estimates, have not been completed.

     In addition to the previously discussed costs, Blackstone is currently
litigating responsibility for clean-up costs and related interest aggregating
$5.9 million incurred by the Commonwealth of Massachusetts at a site in which
Blackstone has been named as the responsible party. See Note J of "Notes to
Consolidated Financial Statements" for further discussion.

     A number of scientific studies in the past several years have examined the
possibility of health effects from electric and magnetic fields (EMF) that are
found everywhere there is electricity.  Research to date has not conclusively
established a direct causal relationship between EMF exposure and human health.
Additional studies, which are intended to provide a better understanding of the
subject, are continuing.  Management cannot predict the ultimate outcome of the
EMF issue.

OTHER   Montaup is recovering through rates its share of estimated
decommissioning costs for the Millstone Unit 3 and Seabrook Unit 1 nuclear
generating units.  Montaup's share of the currently allowed estimated total
costs to decommission Millstone Unit 3 is approximately $19.2 million in 1995
dollars and Seabrook Unit 1 is approximately $12.5 million in 1995 dollars.
These figures are based on studies performed for the lead owners of the units.
Montaup also pays into decommissioning reserves, pursuant to contractual
arrangements, at other nuclear generating facilities in which it has an equity
ownership interest or life-of-unit entitlement.  Such expenses are currently
recovered through rates.

EUA occasionally makes forward-looking projections of expected future
performance or statements of our plans and objectives.  These forward-looking
statements may be contained in filings with the Securities and Exchange
Commission, press releases and oral statements.  Actual results could differ
materially from these statements.  Therefore, no assurances can be given that
such forward-looking statements and estimates will be achieved.

"Management's Discussion and Analysis of Financial Condition and Review of
Operations" provides a summary of information regarding the Company's financial
condition and results of operation and should be read in conjunction with the
"Consolidated Financial Statements" and "Notes to Consolidated Financial
Statements" to arrive at a more complete understanding of such matters.


Financial Table of Contents
Consolidated Statement of Income                                      22
Consolidated Statement of Cash Flows                                  23
Consolidated Balance Sheet                                            24
Consolidated Statement of Retained Earnings                           25
Consolidated Statement of Equity Capital and Preferred Stock          25
Consolidated Statement of Indebtedness                                26
Notes to Consolidated Financial Statements                            27
Report of Independent Accountants                                     36
Report of Management                                                  36
Quarterly Financial and Common Share Information                      37
Consolidated Operating and Financial Statistics                       38
Shareholder Information                                               40
Trustees and Officers                                  Inside Back Cover



<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF INCOME

Years Ended December 31,
<S>                                                        <C>          <C>       <C>
                                                            1995       1994     1993
(In Thousands Except Common Shares and per Share Amounts)

OPERATING REVENUES                                       $   563,363 $   564,278 $   566,477
OPERATING EXPENSES:
   Fuel                                                       90,888      87,573      85,218
   Purchased Power-Demand                                    125,616     130,080     139,524
   Other Operation                                           163,907     160,985     156,972
   Voluntary Retirement Incentive                              4,505
   Maintenance                                                23,468      23,510      25,148
   Depreciation and Amortization                              45,492      46,455      44,722
   Taxes - Other Than Income                                  20,744      24,337      24,468
   Income Taxes                                               17,015      17,543      14,776
      Total Operating Expenses                               491,635     490,483     490,828
   Operating Income                                           71,728      73,795      75,649
   Equity in Earnings of Jointly Owned Companies              12,063      12,485      14,140
   Allowance for Other Funds Used
     During Construction                                         538         351         379
   Loss on Disposal of Cogeneration Operations               (18,086)
   Income Tax Impact of Loss on Disposal of Cogeneration
      Operations                                               7,588
   Other Income (Deductions) - Net                             2,574       6,847       3,655
      Income Before Interest Charges                          76,405      93,478      93,823
INTEREST CHARGES:
   Interest on Long-Term Debt                                 38,216      38,987      41,530
   Amortization of Debt Expense and Premium - Net              2,752       2,729       1,904
   Other Interest Expense                                      3,167       3,849       4,137
   Allowance for Borrowed Funds Used During
     Construction (Credit)                                    (2,677)     (1,788)     (1,989)
      Net Interest Charges                                    41,458      43,777      45,582
Net Income                                                    34,947      49,701      48,241
Preferred Dividends of Subsidiaries                            2,321       2,331       3,310
Consolidated Net Earnings                                $    32,626 $    47,370 $    44,931
Average Common Shares Outstanding                         20,238,961  19,671,970  18,391,147
Consolidated Earnings per Share                          $      1.61 $      2.41 $      2.44
Dividends Paid per Share                                 $     1.585 $     1.515 $      1.42

The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF CASH FLOWS

Years Ended December 31, (In Thousands)                     1995          1994      1993
<S>                                                       <C>          <C>          <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income                                                 $    34,947 $   49,701  $   48,241
Adjustments to Reconcile Net Income
  to Net Cash Provided from Operating Activities:
   Depreciation and Amortization                                52,413     54,091      50,492
   Amortization of Nuclear Fuel                                  3,647      3,310       5,136
   Deferred Taxes                                                 (985)     8,017      11,099
   Non-cash (Gains)/Expenses on Sales of Investments in
     Energy Savings Projects                                    (1,264)       382      (4,731)
   Loss on Disposal of Cogeneration Operations                  18,086
   Investment Tax Credit, Net                                   (1,212)      (181)     (1,279)
   Allowance for Other Funds Used During Construction             (538)      (351)       (379)
   Collections and Sales of Project Notes and Leases Receivable 17,748     11,115       3,512
   Other - Net                                                   5,129    (10,360)      6,058
Changes in Operating Assets and Liabilities:
   Accounts Receivable                                           5,729      (4,509)   (9,609)
   Materials and Supplies                                       (1,280)     (2,035)      452
   Accounts Payable                                              1,543      (2,668)   (1,885)
   Taxes Accrued                                                (1,921)     (5,834)    3,382
   Other - Net                                                 (19,079)      9,641    (8,405)
     Net Cash Provided from Operating Activities               112,963     110,319   102,084
CASH FLOW FROM INVESTING ACTIVITIES:
   Construction Expenditures                                   (77,923)    (50,519)  (76,391)
   Collections on Notes and Lease Receivables of EUA Cogenex     3,125       1,635     1,210
   Proceeds from Disposal of Cogeneration Assets                11,501
   Increase in Other Investments                                (2,300)   (11,329)
   Net Cash (Used in) Investing Activities                     (65,597)   (60,213)   (75,181)
CASH FLOW FROM FINANCING ACTIVITIES:
 Issuances:
   Common Shares                                                 5,985     9,538      46,313
   Long-Term Debt                                                          7,925     245,000
   Preferred Stock                                                                    30,000
 Redemptions:
   Long-Term Debt                                              (42,725)  (13,233)   (214,809)
   Preferred Stock                                                (100)     (100)    (41,700)
 Premium on Reacquisition and
     Financing Expenses                                            (63)     (689)    (14,956)
 EUA Common Share Dividends Paid                               (32,050)  (29,795)    (26,101)
 Subsidiary Preferred Dividends Paid                            (2,324)   (2,333)     (3,316)
 Net Increase (Decrease) in Short-Term Debt                      7,862    (5,490)    (72,768)
     Net Cash (Used in) Financing Activities                   (63,415)  (34,177)    (52,337)
NET (DECREASE) INCREASE IN CASH AND
  TEMPORARY CASH INVESTMENTS:                                  (16,049)   15,929     (25,434)
Cash and Temporary Cash Investments at Beginning of Year        20,109     4,180      29,614
Cash and Temporary Cash Investments at End of Year          $    4,060 $  20,109  $    4,180
Cash Paid during the year for:
   Interest (Net of Amounts Capitalized)                    $   39,306 $  39,650  $   45,057
   Income Taxes                                             $    9,412 $  15,233  $   12,919
Conversion of Investments in Energy Savings Projects
     to Notes and Leases Receivable                         $   19,324 $  10,914  $   16,591


The accompanying notes are an integral part of the financial statements.
</TABLE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET

December 31, (In Thousands)                                     1995             1994
<S>                                                      <C>                  <C>
ASSETS
Utility Plant and Other Investments:
   Utility Plant in Service                              $ 1,037,662    $   1,020,859
     Less Accumulated Provisions for Depreciation and
Amortization                                                 324,146          304,034
         Net Utility Plant in Service                        713,516          716,825
   Construction Work in Progress                               7,570            8,389
   Net Utility Plant                                         721,086          725,214
   Non-utility Property - Net                                 82,347          107,803
   Investments in Jointly Owned Companies                     70,210           70,675
   Other                                                      67,157           55,416
       Total Utility Plant and Other Investments             940,800          959,108
Current Assets:
   Cash and Temporary Cash Investments                         4,060           20,109
   Accounts Receivable:
     Customers, Net                                           61,096           63,709
     Accrued Unbilled Revenues                                11,311           10,178
     Other                                                    11,969           15,461
   Notes Receivable                                           18,663           13,906
   Materials and Supplies (at average cost):
     Fuel                                                      7,450            6,413
     Plant Materials and Operating Supplies                    9,066            8,755
   Other Current Assets                                       11,804            8,517
       Total Current Assets                                  135,419          147,048
   Other Assets                                              124,054          127,893
Total Assets                                              $1,200,273    $   1,234,049

LIABILITIES AND CAPITALIZATION
Capitalization:
   Common Equity                                          $  375,229    $     365,443
   Non-Redeemable Preferred Stock of Subsidiaries - Net        6,900            6,900
   Redeemable Preferred Stock of Subsidiaries - Net           26,255           25,390
   Long-Term Debt - Net                                      434,871          455,412
      Total Capitalization                                   843,255          853,145
Current Liabilities:
   Notes Payable - Banks                                      39,540           31,678
   Long-Term Debt Due Within One Year                         19,506           41,601
   Accounts Payable                                           35,769           33,442
   Redeemable Preferred Stock Sinking Fund Requirement            50               50
   Taxes Accrued                                               4,544            6,465
   Interest Accrued                                           10,861           10,889
   Other Current Liabilities                                  19,931           29,566
      Total Current Liabilities                              130,201          153,691
Other Liabilities                                             86,077           89,313
Accumulated Deferred Taxes                                   140,740          137,900
Commitments and Contingencies (Note J)
Total Liabilities and Capitalization                      $1,200,273    $   1,234,049

The accompanying notes are an integral part of the financial statements.
</TABLE>


<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF RETAINED EARNINGS
                                                              1995        1994       1993
<S>                                                         <C>        <C>       <C>
Years Ended December 31, (In Thousands)
Retained Earnings - Beginning of Year                     $  56,617  $   39,642  $   21,434
Consolidated Net Earnings                                    32,626      47,370      44,931
   Total                                                     89,243      87,012      66,365
Dividends Paid - EUA Common Shares                           32,050      29,795      26,101
Other                                                           965         600         622
Retained Earnings - Accumulated since June 1991 Accounting
   Reorganization                                         $  56,228  $   56,617  $   39,642

</TABLE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF EQUITY CAPITAL & PREFERRED STOCK
December 31, (Dollar Amounts In Thousands)
                                                                  1995        1994
<S>                                                               <C>           <C>
EASTERN UTILITIES ASSOCIATES:
 Common Shares:
   $5 par value 36,000,000 shares authorized, 20,436,764 shares
      outstanding in 1995 and 19,936,980 shares in 1994          $ 102,184   $ 99,685
Other Paid-In Capital                                              220,730    212,990
 Common Share Expense                                               (3,913)    (3,849)
 Retained Earnings - Accumulated since June 1991 Accounting
Reorganization                                                      56,228     56,617
      Total Common Equity                                          375,229    365,443
CUMULATIVE PREFERRED STOCK OF SUBSIDIARIES:
 Non-Redeemable Preferred:
   Blackstone Valley Electric Company:
      4.25% $100 par value 35,000 shares (1)                         3,500      3,500
      5.60% $100 par value 25,000 shares (1)                         2,500      2,500
      Premium                                                          129        129
   Newport Electric Corporation:
      3.75% $100 par value 7,689 shares (1)                            769        769
      Premium                                                            2          2
        Total Non-Redeemable Preferred Stock                         6,900      6,900
 Redeemable Preferred:
   Eastern Edison Company:
      6  5/8% $100 par value 300,000 shares (2)                     30,000     30,000
      Expense, Net of Premium                                         (335)      (335)
      Preferred Stock Redemption Costs                              (3,447)    (4,408)
   Newport Electric Corporation:
      9.75% $100 par value 900 shares (1)                               90        190
      Expense                                                           (3)        (7)
      Sinking Fund Requirement Due Within One Year                     (50)       (50)
        Total Redeemable Preferred Stock                            26,255     25,390
        Total Preferred Stock of Subsidiaries                    $  33,155 $   32,290

(1)  Authorized and Outstanding.
(2)  Authorized 400,000 shares.  Outstanding 300,000 at December 31, 1995.
</TABLE>

The accompanying notes are an integral part of the financial statements.

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF INDEBTEDNESS

December 31, (In Thousands)                                         1995         1994
<S>                                                                 <C>          <C>
EUA Service Corporation:
       10.2% Secured Notes due 2008                              $   12,300    $ 14,500
EUA Cogenex Corporation:
       7.22% Unsecured Notes due 1997                                15,000      15,000
         7.0% Unsecured Notes due 2000                               50,000      50,000
         9.6% Unsecured Notes due 2001                               19,200      20,000
     10.56% Unsecured Notes due 2005                                 35,000      35,000
EUA Ocean State Corporation:
       9.59% Unsecured Notes due 2011                                33,544      36,020
Blackstone Valley Electric Company:
   First Mortgage Bonds:
         9 1/2% due 2004 (Series B)                                  13,500      15,000
      10.35% due 2010 (Series C)                                     18,000      18,000
   Variable Rate Demand Bonds due 2014(1)                             6,500       6,500
Eastern Edison Company
   First Mortgage and Collateral Trust Bonds:
         8.9% Secured Medium Term Notes due 1995                                 10,000
         4 7/8% due 1996                                              7,000       7,000
        5 7/8% due 1998                                              20,000      20,000
          5 3/4% due 1998                                            40,000      40,000
        7.78% Secured Medium Term Notes due 2002                     35,000      35,000
          6 7/8% due 2003                                            40,000      40,000
         6.35% due 2003                                               8,000       8,000
         8.0% due 2023                                               40,000      40,000
   Pollution Control Revenue Bonds:
         5 7/8% due 2008                                             40,000      40,000
   Unsecured Medium Term Notes:
      9-9 1/4% due 1995 (Series A)                                               25,000
Newport Electric Corporation:
   First Mortgage Bonds:
         9.0% due 1999                                                1,386       1,400
         9.8% due 1999                                                8,000       8,000
         8.95% due 2001                                               3,900       4,550
   Small Business Administration Loan:
         6.5% due 2005                                                  809         894
   Variable Rate Revenue Refunding Bonds due 2011(2)                  7,925       7,925
Unamortized (Discount) - Net                                           (687)       (776)
                                                                    454,377     497,013
Less Portion Due Within One Year                                     19,506      41,601
      Total Long-Term Debt - Net                                 $  434,871    $455,412

(1)  Weighted average interest rate was 3.9% for 1995 and 2.9% for 1994.
(2)  Weighted average interest rate was 3.9% for 1995 and 2.6% for 1994.
</TABLE>

The accompanying notes are an integral part of the financial statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993

(A) Nature of Operations and Summary of Significant Accounting Policies:

General:  Eastern Utilities Associates (EUA) is a diversified energy services
holding company.  Its subsidiaries are principally engaged in the generation,
transmission, distribution and sale of electricity; energy related services
such as energy management; and promoting the conservation and efficient use of
energy.

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 assets and 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.

Reclassifications:  Certain prior period amounts on the financial statements
have been reclassified to conform with current presentation.

Basis of Consolidation:  The consolidated financial statements include the
accounts of EUA and all subsidiaries.  All material intercompany transactions
between the consolidated subsidiaries have been eliminated.

System of Accounts:  The accounts of EUA and its consolidated subsidiaries are
maintained in accordance with the uniform system of accounts prescribed by the
regulatory bodies having jurisdiction.

Jointly Owned Companies:  Montaup Electric Company (Montaup) follows the equity
method of accounting for its stock ownership investments in jointly owned
companies including four regional nuclear generating companies.  Montaup's
investments in these nuclear generating companies range from 2.25% to 4.50%.
Montaup is entitled to electricity produced from these facilities based on its
ownership interests and is billed for its entitlement pursuant to contractual
agreements which are approved by the Federal Energy Regulatory Commission
(FERC).

One of the four facilities is being decommissioned, but Montaup is required to
pay, and has received FERC authorization to recover, its proportionate share of
any unrecovered costs and costs incurred after the plant's retirement.
Montaup's share of all unrecovered assets and the total estimated costs to
decommission the unit aggregated approximately $10.1 million at December 31,
1995 and is included with Other Liabilities on the Consolidated Balance Sheet.
Also, due to recoverability, a regulatory asset has been recorded for the same
amount and is included with Other Assets.

Montaup also has a stock ownership investment of 3.27% in each of two companies
which own and operate certain transmission facilities between the Hydro Quebec
electric system and New England.

EUA Ocean State Corporation (EUA Ocean State) follows the equity method of
accounting for its 29.9% partnership interest in the Ocean State Power Project
(OSP).  EUA Ocean State's investment in OSP and Montaup's stock ownership
investments are included in "Investments in Jointly Owned Companies" on the
Consolidated Balance Sheet.

Plant and Depreciation:  Utility plant is stated at original cost.  The cost of
additions to utility plant includes contracted work, direct labor and material,
allocable overhead, allowance for funds used during construction and indirect
charges for engineering and supervision.  For financial statement purposes,
depreciation is computed on the straight-line method based on estimated useful
lives of the various classes of property.  On a consolidated basis, provisions
for depreciation on utility plant were equivalent to a composite rate of
approximately 3.3% in 1995 and 1994, and 3.4% in 1993 based on the average
depreciable property balances at the beginning and end of each year.  Non-
utility property and equipment of EUA Cogenex Corporation (EUA Cogenex) is
stated at original cost.  For financial statement purposes, depreciation on
office furniture and equipment, computer equipment and real property is
computed on the straight-line method based on estimated useful lives ranging
from five to forty years.  Project equipment is depreciated over the term of
the applicable contracts or based on the estimated useful lives, whichever is
shorter, ranging from five to fifteen years.

Other Assets:  The components of Other Assets at December 31, 1995 and 1994 are
detailed as follows:

(In Thousands)                                      1995          1994
Regulatory Assets:
     Unamortized losses on reacquired debt      $   15,894     $  17,709
     Unrecovered plant and
         decommissioning costs                      10,100        18,400
     Deferred FAS 109 costs (Note B)                48,196        43,535
     Deferred FAS 106 costs                          4,583         4,941
     Mendon Road judgment (Note J)                   6,591         5,857
     Other regulatory assets                         5,650         9,505
     Total regulatory assets                        91,014        99,947
Other deferred charges and assets:
     Unamortized debt expenses                       5,349         6,197
     Goodwill                                        7,054         7,260
     Other                                          20,637        14,489
     Total Other Assets                          $ 124,054     $ 127,893

Regulatory Accounting:  EUA's Core Electric companies are subject to certain
accounting rules that are not applicable to other industries.  These accounting
rules allow regulated companies, in appropriate circumstances, to establish
regulatory assets and liabilities which defer the current financial impact of
certain costs that are expected to be recovered in future rates.  EUA believes
that its Core Electric operations continue to meet the criteria established in
these accounting standards.  Effects of legislation and/or regulatory
initiatives or EUA's own initiatives such as "Choice and Competition" could
ultimately cause the Core Electric companies to no longer follow these
accounting rules.  In such an event, a non-cash write-off of regulatory assets
and liabilities could be required at that time.

Allowance for Funds Used During Construction (AFUDC) and Capitalized Interest:
AFUDC represents the estimated cost of borrowed and equity funds used to
finance the EUA System's construction program.  In accordance with regulatory
accounting, AFUDC is capitalized as a cost of utility plant in the same manner
as certain general and administrative costs.  AFUDC is not an item of current
cash income but is recovered over the service life of utility plant in the form
of increased revenues collected as a result of higher depreciation expense.
The combined rate used in calculating AFUDC was 9.2% in 1995, 9.7% in 1994, and
9.5% in 1993.  The caption "Allowance for Borrowed Funds Used During
Construction" also includes interest capitalized for non-regulated entities in
accordance with Financial Accounting Standards Board (FASB) Statement No. 34.

Operating Revenues:  Utility revenues are based on billing rates authorized by
applicable federal and state regulatory commissions.  Eastern Edison Company
(Eastern Edison), Blackstone Valley Electric Company (Blackstone) and Newport
Electric Corporation (Newport) (collectively, the Retail Subsidiaries) accrue
the estimated amount of unbilled base rate revenues at the end of each month to
match costs and revenues more closely.  In addition they also record the
difference between fuel costs incurred and fuel costs billed.  Montaup
recognizes revenues when billed.  Montaup, Blackstone, and Newport also record
revenues related to rate adjustment mechanisms.

EUA Cogenex's revenues are recognized based on financial arrangements
established by each individual contract.  Under paid-from-savings contracts,
revenues are recognized as energy savings are realized by customers.  Revenue
from the sale of energy savings projects and sales-type leases are recognized
when the sales are complete.  Interest on the financing portion of the
contracts is recognized as earned at rates established at the outset of the
financing arrangement.  All construction and installation costs are recognized
as contract expenses when the contract revenues are recorded.  In circumstances
in which material uncertainties exist as to contract profitability, cost
recovery accounting is followed and revenues received under such contracts are
first accounted for as recovery of costs to the extent incurred.

Federal Income Taxes:  EUA and its subsidiaries generally reflect in income the
estimated amount of taxes currently payable, and provide for deferred taxes on
certain items subject to temporary timing differences to the extent permitted
by the various regulatory agencies.  EUA's rate-regulated subsidiaries defer
recognition of annual investment tax credits (ITC) and amortize these credits
over the productive lives of the related assets.

Cash and Temporary Cash Investments:  EUA considers all highly liquid
investments and temporary cash investments with a maturity of three months or
less when acquired to be cash equivalents.

New Accounting Standard:  In March 1995, the FASB issued Statement of Financial
Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (FAS 121), effective for
fiscal year 1996.  FAS 121 requires all regulatory assets, assets which were
established as a result of high probability of recovery in a regulated
environment, to continue to meet that high probability of recovery at each
balance sheet date.  Based on the current regulatory framework, management does
not expect that adoption of this standard will have a material effect on EUA's
financial position or results of operation.  However, this assumption may
change in the future as changes are made in the current regulatory framework or
as competitive factors influence wholesale and retail pricing in the electric
utility industry.

(B) Income Taxes:

EUA adopted FASB statement No. 109, "Accounting for Income Taxes" (FAS 109)
which required recognition of deferred income taxes for temporary differences
that are reported in different years for financial reporting and tax purposes
using the liability method.  Under the liability method, deferred tax
liabilities or assets are computed using the tax rates that will be in effect
when temporary differences reverse.  Generally, for regulated companies, the
change in tax rates may not be immediately recognized in operating results
because of rate-making treatment and provisions in the Tax Reform Act of 1986.
At December 31, 1995 and 1994, no valuation allowance was deemed necessary for
total deferred tax assets.  Total deferred tax assets and liabilities for 1995
and 1994 are comprised as follows:

                    Deferred Tax                           Deferred Tax
($ in thousands)    Assets             ($ in thousands)    Liabilities
                     1995   1994                             1995    1994
Plant Related                           Plant Related
     Differences    $21,028   $19,072        Differences  $170,562  $164,130
Alternative                             Refinancing
     Minimum Tax      9,302     9,446          Costs         1,919     2,196
Litigation               41       902   Pensions             1,496     1,769
Bad Debts               125       234
Pensions              3,392     1,907
Acquisitions          4,281     4,575
Other                 7,143     5,127     Other             11,684    10,627
     Total          $45,312   $41,263        Total        $185,661  $178,722

As of December 31, 1995 and 1994,  EUA has recorded on its Consolidated Balance
Sheet a regulatory liability to ratepayers of approximately $27.2 million and
$29.2 million, respectively.  These amounts primarily represent excess deferred
income taxes resulting from the reduction in the federal income tax rate and
also include deferred taxes provided on investment tax credits.  Also at
December 31, 1995 and 1994, a regulatory asset of approximately $48.2 million
and $43.5 million, respectively, has been recorded, representing the cumulative
amount of federal income taxes on temporary depreciation differences which were
previously flowed through to ratepayers.

EUA has $9.3 million of alternative minimum tax credits which have no
expiration and can be utilized to reduce the consolidated regular tax
liability.  Under the terms of the December 1992 settlement agreement with
EUA Power Corporation (EUA Power, now known as Great Bay Power Corporation),
EUA was entitled to utilize EUA Power's tax credits to reduce the 1993
consolidated tax liability without compensation to EUA Power.  Approximately
$6.9 million of such credits were utilized in 1993 of which $4.9 million was
charged against 1993 federal income tax expense.

In 1994, EUA Ocean State utilized $3.9 million of investment tax credits
related to its investment in OSP, which were charged against 1994 federal
income tax expense and reduced the consolidated regular tax liability.  EUA has
no remaining ITC carryforwards available.

Components of income tax expense for the year 1995, 1994, and
1993  are as follows:

($ in thousands)                       1995       1994     1993
Federal:
   Current                           $  10,335 $     5,986    $  9,203
   Deferred                              6,456       9,199       4,148
   Investment Tax Credit, Net           (1,130)        (99)     (1,197)
                                        15,661      15,086      12,154
State:
   Current                               2,579       1,154       2,289
   Deferred                             (1,225)      1,303         333
                                         1,354       2,457       2,622
Charged to Operations                   17,015      17,543      14,776
Charged to Other Income:
   Current                               4,353       9,243       1,770
   Deferred                             (6,217)     (2,486)      6,618
   Investment Tax Credit, Net              (82)     (3,972)     (5,049)
                                        (1,946)      2,785       3,339
Total                                 $ 15,069  $   20,328    $ 18,115


Total income tax expense was different from the amounts computed by applying
federal income tax statutory rates to book income subject to tax for the
following reasons:

($ in thousands)                                 1995      1994        1993
Federal Income Tax Computed at Statutory Rates $ 17,506  $ 24,510  $ 23,224
(Decrease) Increase in Tax From:
   Equity Component of AFUDC                       (187)     (123)     (133)
   Depreciation Differences                         118        50     1,230
   Amortization and Utilization of ITC           (1,212)   (5,115)   (6,295)
   State Taxes, Net of Federal Income Tax Benefit   (44)    2,285     2,237
   Cost of Removal                                  (36)     (404)     (583)
   Other                                         (1,076)     (875)   (1,565)
Total Income Tax Expense                       $ 15,069  $ 20,328  $ 18,115

(C) Capital Stock:

The changes in the number of common shares outstanding and related increases in
Other Paid-In Capital during the years ended December 31, 1995, 1994, and 1993
were as follows:

<TABLE>
<CAPTION>
                                   Number of Common Shares Issued
<S>  <C>       <C>           <C>           <C>           <C>          <C>
               Dividend                    Northeast     Highland      Common   Other
               Reinvestment                Energy        Energy        Shares   Paid-In
     Public    and Employee   J.L. Day Co. Management    Group         At Par   Capital
     Offering  Savings Plans  Acquisition  Acquisition   Acquisition   (000)     (000)
1995             323,526                                 176,258      $ 2,499  $  7,683
1994             427,304        12,499        464,579                   4,522    10,209
1993 1,300,000   385,825       108,985                                  8,974    40,339
</TABLE>

The preferred stock provisions of the Retail Subsidiaries place certain
restrictions upon the payment of dividends on common stock by each company. At
December 31, 1995 and 1994, each company was in excess of the minimum
requirements which would make these restrictions effective.

In the event of involuntary liquidation, the holders of non-redeemable
preferred stock of the Retail Subsidiaries are entitled to $100 per share plus
accrued dividends.  In the event of voluntary liquidation, or if redeemed at
the option of these companies, each share of the non-redeemable preferred stock
is entitled to accrued dividends plus the following:

Company          Issue        Amount
Blackstone:    4.25% issue    $104.40
               5.60% issue     103.82
Newport:       3.75% issue     103.50

(D) Redeemable Preferred Stock:

Eastern Edison's 65/8% Preferred Stock issue is entitled to an annual mandatory
sinking fund sufficient to redeem 15,000 shares commencing September 1, 2003.
The redemption price is $100 per share plus accrued dividends.  All outstanding
shares of the 65/8% issue are subject to mandatory redemption on September 1,
2008, at a price of $100 per share plus accrued dividends.

In the event of liquidation, the holders of Eastern Edison's 65/8% Preferred
Stock are entitled to $100 per share plus accrued dividends.

Newport's 9.75% Preferred Stock issue is entitled to a mandatory sinking fund
sufficient to redeem 500 shares during each twelve-month period until the year
1999.  The balance of  any shares outstanding must be redeemed by the year
2000.  The redemption price is $100 per share plus accrued dividends.  In the
event of involuntary liquidation, the holders of Newport's redeemable preferred
stock are entitled to $100 per share plus accrued dividends.  In the event of
voluntary liquidation, or if redeemed at the option of Newport, the holders of
the 9.75% issue are entitled to $102.44 per share plus accrued dividends prior
to October 1, 1998; thereafter no premium is payable upon such redemption.

The aggregate amount of redeemable preferred stock sinking fund requirements
for each of the five years following 1995 are $50,000 for 1996, $40,000 for
1997 and zero for 1998, 1999 and  2000.

(E) Long-Term Debt:

The various mortgage bond issues of Blackstone, Eastern Edison, and Newport are
collateralized by substantially all of their utility plant.  In addition,
Eastern Edison's bonds are collateralized by securities of Montaup, which are
wholly-owned by Eastern Edison, in the principal amount of approximately $236
million.

Blackstone's Variable Rate Demand Bonds are collateralized by an irrevocable
letter of credit which expires on January 21, 1997.  The letter of credit
permits an extension of one year upon mutual agreement of the bank and
Blackstone.

Newport's Variable Rate Electric Energy Facilities Revenue Refunding Bonds are
collateralized by an irrevocable Letter of Credit which expires on January 6,
1997, and permits an extension of one year upon mutual agreement of the Bank
and Newport.  EUA Service Corporation's (EUA Service) 10.2% Secured Notes due
2008 are collateralized by certain real estate and property of the company.

In December, Eastern Edison used available cash to redeem $25 million of 9-
91/4% Unsecured Medium Term Notes at maturity, and $10 million of 8.90% First
Mortgage and Collateral Trust Bonds at maturity.

The EUA System's aggregate amount of current cash sinking fund requirements and
maturities of long-term debt, (excluding amounts that may be satisfied by
available property additions) for each of the five years following 1995 are:
$19.5 million in 1996, $27.5 million in 1997, $72.5 million in 1998, $21.9
million in 1999, and $62.5 million in 2000.

(F) Fair Value Of Financial Instruments:

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate:

Cash and Temporary Cash Investments:  The carrying amount approximates fair
value because of the short-term maturity of these instruments.

Long Term Notes Receivable and Net Investment in Sales-Type Leases:   The
carrying amounts approximate fair value due to the nature of the asset.

Preferred Stock and Long-Term Debt of Subsidiaries:  The fair value
of the System's redeemable preferred stock and long-term debt were based on
quoted market prices for such securities at December 31, 1995.

The estimated fair values of the System's financial instruments at December 31,
1995, are as follows:

                                         Carrying  Fair
($ in thousands)                         Amount    Value

Cash and Temporary Cash Investments     $ 4,060   $ 4,060
Long-Term Notes Receivable               38,635    38,635
Net Investment in Sales-Type Leases       9,565     9,565
Redeemable Preferred Stock               30,090    31,890
Long-Term Debt                          455,064   479,242

(G) Lines Of Credit:

EUA System companies maintain short-term lines of credit with various banks
aggregating approximately $150 million.  At December 31, 1995, unused short-
term lines of credit were approximately $111 million.  In accordance with
informal agreements with the various banks, commitment fees are required
to maintain certain lines of credit.  During 1995, the weighted average
interest rate for short-term borrowings was 6.2%.

(H) Jointly Owned Facilities:

At December 31, 1995, in addition to the stock ownership interests discussed in
Note A, Nature of Operations and Summary of Significant Accounting Policies -
Jointly Owned Companies, Montaup and Newport had direct ownership interests in
the following electric generating facilities:

                                          Accumulated
                                          Provision For  Net       Construc-
                               Utility    Depreciation   Utility   tion
                      Percent  Plant in       and        Plant in  Work in
($ in thousands)      Owned    Service    Amortization   Service   Progress
Montaup:
  Canal Unit 2       50.00%    $ 71,715      $42,657     $ 29,058   $2,085
  Wyman Unit 4        1.96%       4,050        2,020        2,030
  Seabrook Unit 1     2.90%     194,735       23,993      170,742      454
  Millstone Unit 3    4.01%     178,231       40,482      137,749       42
Newport:
  Wyman Unit 4        0.67%       1,314          684          630

The foregoing amounts represent Montaup's and Newport's interest in each
facility, including nuclear fuel where appropriate, and are included on the
like-captioned lines on the Consolidated Balance Sheet.  At  December 31, 1995,
Montaup's total net investment in nuclear fuel of the Seabrook and Millstone
Units amounted to $3.0 million and $2.2 million, respectively.

Montaup's and Newport's shares of related operating and maintenance expenses
with respect to units reflected in the table above are included in the
corresponding operating expenses.

(I) Financial Information By Business Segments:

The Core Electric Business includes results of the electric utility operations
of Blackstone, Eastern Edison, Newport and Montaup.

Energy Related Business includes results of our diversified energy related
subsidiaries, EUA Cogenex, EUA Ocean State and EUA Energy Investment
Corporation (EUA Energy).

Corporate results include the operations of EUA Service and EUA
Parent.
<TABLE>
<CAPTION>
<S>                  <C>       <C>       <C>      <C>           <C>           <C>
                               Pre-Tax            Depreciation  Cash          Equity in
                    Operating  Operating  Income      and       Construction  Subsidiary
($ in thousands)    Revenues   Income     Taxes   Amortization  Expenditures  Earnings

Year Ended
  December 31, 1995
    Core Electric   $ 483,864  $ 86,505 $  20,312   $ 34,218      $ 31,466     $  1,646
    Energy Related     79,499     3,377    (3,318)    11,265        44,684       10,417
    Corporate          (1,139)       21         9      1,773
        Total       $ 563,363  $ 88,743 $  17,015   $ 45,492      $ 77,923     $ 12,063

Year Ended
  December 31, 1994
    Core Electric   $ 489,798  $ 83,966  $  18,879   $ 33,409      $ 32,978    $  1,700
    Energy Related     74,480     9,905    (1,149)     12,491        17,231      10,785
    Corporate          (2,533)     (187)      555         310
        Total       $ 564,278  $ 91,338  $ 17,543    $ 46,455      $ 50,519    $ 12,485

Year Ended
  December 31, 1993
    Core Electric   $ 499,565  $ 84,654  $ 18,443    $ 34,035      $ 32,407    $  1,750
    Energy Related     66,912     6,690    (3,766)     10,031        43,604      12,390
    Corporate            (919)       99       656         380
        Total       $ 566,477  $ 90,425  $ 14,776    $ 44,722      $ 76,391    $ 14,140
</TABLE>


                                                      December 31,
($ in thousands)                                     1995      1994
Total Plant and Other Investments
    Core Electric                             $   716,828    $   721,840
    Energy Related                                203,670        217,584
    Corporate                                      20,302         19,684
        Total Plant and Other Investments         940,800        959,108
Other Assets
    Core Electric                                 188,087        204,982
    Energy Related                                 57,083         55,554
    Corporate                                      14,303         14,405
        Total Other Assets                        259,473        274,941
Total Assets                                   $1,200,273     $1,234,049


(J) Commitments And Contingencies:

Nuclear Fuel Disposal and Nuclear Plant Decommissioning Costs:
The owners (or lead participants) of the nuclear units in which Montaup  has an
interest have made, or expect to make, various arrangements for the acquisition
of uranium concentrate, the conversion, enrichment, fabrication and utilization
of nuclear fuel and the disposition of that fuel after use.  The owners (or
lead participants) of United States nuclear units have entered into contracts
with the Department of Energy (DOE) for disposal of spent nuclear fuel in
accordance with the Nuclear Waste Policy Act of 1982 (NWPA).  The NWPA requires
(subject to various contingencies) that the federal government design, license,
construct and operate a permanent repository for high level radioactive wastes
and spent nuclear fuel and establish a prescribed fee for the disposal of such
wastes and nuclear fuel.  The NWPA specifies that the DOE provide for the
disposal of such waste and spent nuclear fuel starting in 1998.  Objections on
environmental and other grounds have been asserted against proposals for
storage as well as disposal of spent nuclear fuel.  The DOE now estimates that
a permanent disposal site for spent fuel will not be ready to accept fuel for
storage or disposal until as late as the year 2010.  Montaup owns a 4.01%
interest in Millstone Unit 3 and a 2.9% interest in Seabrook Unit 1.
Northeast Utilities, the operator of the units, indicates that Millstone Unit 3
has sufficient on-site storage facilities which, with rack additions, can
accommodate its spent fuel for the projected life of the unit.  At the Seabrook
Project, there is on-site storage capacity which, with rack additions, will be
sufficient to at least the year 2011.

The Energy Policy Act requires that a fund be created for the decommissioning
and decontamination of the DOE uranium enrichment facilities.  The fund will be
financed in part by special assessments on nuclear power plants in which
Montaup has an interest.  These assessments are calculated based on the
utilities' prior use of the government facilities and have been levied by the
DOE, starting in September 1993, and will continue over 15 years.  This cost is
passed on to the joint owners or power buyers as an additional fuel charge on a
monthly basis and is currently being recovered by Montaup through rates.

Also, Montaup is recovering through rates its share of estimated
decommissioning costs for Millstone Unit 3 and Seabrook Unit 1.  Montaup's
share of the current estimate of total costs to decommission Millstone Unit 3
is $19.2 million in 1995 dollars, and Seabrook Unit 1 is $12.5 million in 1995
dollars.  These figures are based on studies performed for the lead owners of
the plants.  Montaup also pays into decommissioning reserves pursuant to
contractual arrangements with other nuclear generating facilities in which it
has an equity ownership interest or life of the unit entitlement.  Such
expenses are currently recoverable through rates.

Pensions:  EUA maintains a non-contributory defined benefit pension plan
covering substantially all employees of the EUA System (Retirement Plan).
Retirement Plan benefits are based on years of service and average compensation
over the four years prior to retirement.  It is the EUA System's policy to fund
the Retirement Plan on a current basis in amounts determined to meet the
funding standards established by the Employee Retirement Income Security Act of
1974.

Net pension expense for the Retirement Plan, including amounts related to the
1995 voluntary retirement incentive offer, for 1995, 1994 and 1993 included the
following components:

($ in thousands)                   1995       1994        1993
Service cost-benefits earned
  during the period            $      2,776   $    3,281   $   2,567
Interest cost on projected
  benefit obligations                 9,391        8,848       8,761
Actual loss (return) on assets      (36,220)       1,523     (18,005)
Net amortization and deferrals       24,392      (12,494)      6,795
Net periodic pension expense            339        1,158         118
Voluntary Retirement Incentive        1,653
Total periodic pension expense $      1,992  $     1,158    $    118

Assumptions used to determine pension costs:

Discount Rate                          8.25%        7.25%       8.75%
Compensation
  Increase Rate                        4.75%        4.75%       6.00%
Long-Term
  Return on Assets                     9.50%        9.50%      10.00%

The following table sets forth the actuarial present value of benefit
obligations and funded status at December 31, 1995, 1994 and 1993:

($ in thousands)                       1995          1994       1993
Accumulated benefit obligations
Vested                            $ (117,060)    $  (96,045)  $(101,279)
Non-vested                              (271)          (315)       (358)
Total                             $ (117,331)    $  (96,360)  $(101,637)
Projected benefit obligations     $ (135,415)    $ (112,483)  $(121,082)
Plan assets at fair value,
  primarily stocks and bonds         152,308        122,816     130,040
Less: Unrecognized net gain
  on assets                          (21,769)       (13,643)    (11,689)
Unamortized net
  assets at January 1                  4,939          5,365       5,944
Net pension assets                $       63     $    2,055   $   3,213

The discount rate and compensation increase rate used to determine post-
retirement benefit costs were changed effective January 1, 1996 to 7.25% and
4.25% respectively, and were used to calculate the plan's funded status  at
December 31, 1995.

The one-time voluntary retirement incentive also resulted in $1.6 million of
non-qualified pension benefits which were expensed in 1995.  At December 31,
1995, approximately $1.5 million was included in other liabilities for these
unfunded benefits.

EUA also maintains non-qualified supplemental retirement plans for certain
officers of the EUA System (Supplemental Plans).  Benefits provided under the
Supplemental Plans are based primarily on compensation at retirement date.  EUA
maintains life insurance on certain participants of the Supplemental Plans to
fund in whole, or in part, its future liabilities under the Supplemental Plans.
As of December 31, 1995, approximately $3.4 million was included in accrued
expenses and other liabilities for these plans.  For the years ended December
31, 1995, 1994 and 1993 expenses related to the Supplemental Plans were $1.5
million, $516,000 and $2.3 million respectively.

Post-Retirement Benefits:  Retired employees are entitled to participate in
health care and life insurance benefit plans.  Health care benefits are subject
to deductibles and other limitations.  Health care and life insurance benefits
are partially funded by EUA System companies for all qualified employees.

The EUA System adopted Statement of Financial Accounting Standard No. 106,
"Accounting for Post-Retirement Benefits Other  Than Pensions," (FAS 106) as of
January 1, 1993.  This standard establishes accounting and reporting standards
for such post-retirement benefits as health care and life insurance.  Under FAS
106 the present value of future benefits is recorded as a periodic expense over
employee service periods through the date they become fully eligible for
benefits.  With respect to periods prior to adopting FAS 106, EUA elected to
recognize accrued costs (the Transition Obligation) over a period of 20 years,
as permitted by FAS 106.  The resultant annual expense, including amortization
of the Transition Obligation and net of capitalized and deferred amounts, was
approximately $6.3 million in 1995, $5.8 million in 1994 and $5.3 million in
1993.

The total cost of post-retirement benefits other than pensions for 1995, 1994
and 1993 includes the following components:

($ in thousands)                              1995      1994      1993
Service cost                              $    996  $   1,537 $   1,337
Interest cost                                4,822      5,381     5,983
Actual return on plan assets                  (671)      (126)      (68)
Amortization of transition obligation        3,312      3,429     3,429
Other amortizations & deferrals - net         (970)       (85)      (60)
Net periodic post-retirement benefit cost    7,489     10,136    10,621
Voluntary Retirement Incentive                 832
Total periodic post-retirement
  benefit costs                            $ 8,321   $ 10,136  $ 10,621

Assumptions used to determine post-retirement benefit costs
    Discount rate                             8.25%     7.25%     8.75%
    Health care cost trend rate
                          - near-term        11.00%    13.00%    13.00%
                          - long-term         5.00%     5.00%     6.25%
    Salary increase rate                      4.75%     4.75%     6.00%
    Rate of return on plan assets
                          - union             8.50%     8.50%     8.50%
                          - non-union         5.50%     5.50%     5.50%

Reconciliation of funded status:
($ in thousands)                               1995     1994      1993

Accumulated post-retirement benefit
  obligation (APBO):
    Retirees                               $(40,817) $(35,386) $(38,008)
    Active employees fully eligible
      for benefits                           (9,760)   (9,778)  (15,324)
    Other active employees                  (20,115)  (23,306) $(25,357)
Total                                      $(70,692) $(68,470) $(78,689)

Fair value of assets, primarily notes
  and bonds                                  12,614     7,722     3,522
Unrecognized transition obligation           56,314    61,718    65,147
Unrecognized net loss (gain)                 (7,575)   (9,098)    5,368
(Accrued)/prepaid post-retirement
  benefit cost                            $  (9,339) $ (8,128) $ (4,652)

The discount rate and compensation increase rate used to determine post-
retirement benefit costs were changed effective January 1, 1996 to 7.25% and
4.25%, respectively, and were used to calculate the funded status of post-
retirement benefits at December 31, 1995.

Increasing the assumed health care cost trend rate by 1% each year would
increase the total post-retirement benefit cost for 1995 by $0.8 million and
increase the total accumulated post-retirement benefit obligation by $8.1
million.

The EUA System has also established separate irrevocable external Voluntary
Employees' Beneficiary Association Trust Funds for union and non-union
retirees.  Contributions to the funds commenced in March 1993 and totaled
approximately $7.1 million during 1995, $6.7 million in 1994 and $6.0 million
in 1993.  Long-Term Purchased Power Contracts:  The EUA System is committed
under long-term purchased power contracts, expiring on various dates through
September 2021, to pay demand charges whether or not energy is received.  Under
terms in effect at December 31, 1995, the aggregate annual minimum commitments
for such contracts are approximately $129 million in 1996 and 1997, $128
million in 1998, $127 million in 1999, $123 million in 2000 and will aggregate
$1.4 billion for the ensuing years.  In addition, the EUA System is required to
pay additional amounts depending on the actual amount of energy received under
such contracts.  The demand costs associated with these contracts are reflected
as Purchased Power-Demand on the Consolidated Statement of Income.  Such costs
are currently recoverable through rates.

Environmental Matters:  The Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, and certain similar state statutes authorize
various governmental authorities to seek court orders compelling responsible
parties to take cleanup action at disposal sites which have been determined by
such governmental authorities to present an imminent and substantial danger to
the public and to the environment because of an actual or threatened release of
hazardous substances.  Because of the nature of the EUA System's business,
various by-products and substances are produced or handled which are classified
as hazardous under the rules and regulations promulgated by the United States
Environmental Protection Agency (EPA) as well as state and local authorities.
The EUA System generally provides for the disposal of such substances through
licensed contractors, but these statutory provisions generally impose potential
joint and several responsibility on the generators of the wastes for cleanup
costs.  Subsidiaries of EUA have been notified with respect to a number of
sites where they may be responsible for such costs, including sites where they
may have joint and several liability with other responsible parties.  It is the
policy of the EUA System companies to notify liability insurers and to initiate
claims.  EUA is unable to predict whether liability, if any, will be assumed
by, or can be enforced against, the insurance carrier in these matters.

On December 13, 1994, the United States District Court for the District of
Massachusetts (District Court) issued a judgment against Blackstone, finding
Blackstone liable to the Commonwealth of Massachusetts (Commonwealth) for the
full amount of response costs incurred by the Commonwealth in the cleanup of a
by-product of manufactured gas at a site at Mendon Road in Attleboro,
Massachusetts.  The judgment also found Blackstone liable for interest and
litigation expenses calculated to the date of judgment.  The total liability is
approximately $5.9 million, including approximately $3.6 million in interest
which has accumulated since 1985.  Due to the uncertainty of the ultimate
outcome of this proceeding and anticipated recoverability, Blackstone recorded
the $5.9 million District Court judgment as a deferred debit.  This amount is
included with Other Assets at December 31, 1995 and 1994.

Blackstone filed a Notice of Appeal of the District Court's judgment and filed
its brief with the United States Court of Appeals for the First Circuit (First
Circuit) on February 24, 1995.  On October 6, 1995 the First Circuit vacated
the District Court's judgment and ordered the District Court to refer the
matter to the EPA to determine whether the chemical substance, ferric
ferrocyanide (FFC), contained within the by-product is a hazardous substance.

On January 20, 1995, Blackstone entered into an escrow agreement with the
Commonwealth whereby Blackstone deposited $5.9 million with an escrow agent who
transferred the funds into an interest bearing money market account.  The
distribution of the proceeds of the escrow account will be determined upon the
final resolution of the judgment.  No additional interest expense will accrue
on the judgment amount.

On January 28, 1994, Blackstone filed a complaint in the District Court,
seeking, among other relief, contribution and reimbursement from Stone &
Webster Inc., of New York City and several of its affiliated companies (Stone &
Webster), and Valley Gas Company of Cumberland, Rhode Island (Valley) for any
damages incurred by Blackstone regarding the Mendon Road site. On November 7,
1994, the court denied motions to dismiss the complaint which were filed by
Stone & Webster and Valley.  This proceeding was stayed in December 1995
pending final EPA determination as to whether FFC is hazardous.

In addition, Blackstone has notified certain liability insurers and has filed
claims with respect to the Mendon Road site, as well as other sites.
Blackstone reached settlement with one carrier for reimbursement of legal costs
related to the Mendon Road case.  In January 1996, Blackstone received $1.2
million in connection with this settlement.

As of December 31, 1995, the EUA System had incurred costs of approximately
$4.6 million (excluding the $5.9 million Mendon Road judgment) in connection
with these sites, substantially all of which relate to Blackstone.  These
amounts have been financed primarily by internally generated cash.  Blackstone
is currently amortizing all of its incurred costs over a five-year period
consistent with prior regulatory recovery periods and is recovering certain of
those costs in rates.

EUA estimates that additional costs of up to $3.0 million (excluding the $5.9
million Mendon Road judgment) may be incurred at these sites through 1997 by
its subsidiaries and the other responsible parties.  Of this amount,
approximately $2.5 million relates to sites at which Blackstone is a
potentially responsible party.  Estimates beyond 1997 cannot be made since site
studies, which are the basis of these estimates, have not been completed.

As a result of the recoverability of cleanup costs in rates and the uncertainty
regarding both its estimated liability, as well as its potential contributions
from insurance carriers and other responsible parties, EUA does not believe
that the ultimate impact of the environmental costs will be material to the
financial position of the EUA System or to any individual subsidiary and thus
no loss provision is required at this time.

The Clean Air Act created new regulatory programs and generally updated and
strengthened air pollution control laws.  These amendments will expand the
regulatory role of the EPA regarding emissions from electric generating
facilities and a host of other sources.  EUA System generating facilities were
first affected in 1995, when EPA regulations took effect for facilities owned
by the EUA System.  Montaup's coal-fired Somerset Unit #6 is utilizing lower
sulfur content coal to meet the 1995 air standards.  EUA does not anticipate
the impact from the Amendments to be material to the financial position of the
EUA System.

In April 1992, the Northeast States for Coordinated Air Use Management
(NESCAUM), an environmental advisory group for eight northeast states including
Massachusetts and Rhode Island, issued recommendations for nitrogen oxide (NOx)
controls for existing utility boilers required to meet the ozone non-attainment
requirements of the Clean Air Act.  The NESCAUM recommendations are more
restrictive than the Clean Air Act requirements.  The Massachusetts Department
of Environmental Management has amended its regulations to require that
Reasonably Available Control Technology (RACT) be implemented at all stationary
sources potentially emitting 50 tons or more per year of NOx.  Similar
regulations have been issued in Rhode Island.  Montaup has initiated
compliance, through, among other things, selective noncatalytic reduction
processes.

A number of scientific studies in the past several years have examined the
possibility of health effects from electric and magnetic fields (EMF) that are
found everywhere there is electricity.  While some of the studies have
indicated there may be some association between exposure to EMF and health
effects, other studies have indicated no direct association.  In addition,
the research to date has not conclusively established a direct causal
relationship between EMF exposure and human health.  Additional studies, which
are intended to provide a better understanding of the subject, are continuing.

Some states have enacted regulations to limit the strength of magnetic fields
at the edge of transmission line rights-of-way.  Rhode Island has enacted a
statute which authorizes and directs the Energy Facility Siting Board to
establish rules and regulations governing construction of high voltage
transmission lines of 69 KV or more.  There is a bill pending in the
Massachusetts Legislature that would authorize the Massachusetts Department of
Public Utilities to examine the potential health effects of EMF.  Management
cannot predict the ultimate outcome of the EMF issue.

Guarantee of Financial Obligations:  EUA has guaranteed or entered into equity
maintenance agreements in connection with certain obligations of its
subsidiaries.  EUA has guaranteed the repayment of EUA Cogenex's $35 million,
10.56% unsecured long-term notes due 2005 and EUA Ocean State's $33.5 million,
9.59% unsecured long-term notes due 2011. In addition, EUA has entered into
equity maintenance agreements in connection with the issuance of EUA Service's
10.2% Secured Notes and EUA Cogenex's 7.22% and 9.6% Unsecured Notes.

Under the December 1992 settlement agreement with EUA Power, EUA reaffirmed its
guarantee of up to $10 million of EUA Power's share of the decommissioning
costs of Seabrook Unit 1 and any costs of cancellation of Unit 1 or Unit 2. EUA
guaranteed this obligation in 1990 in order to secure the release to EUA Power
of a $10 million fund established by EUA Power at the time EUA Power acquired
its Seabrook interest.  EUA has not provided a reserve for this guarantee
because management believes it unlikely that EUA will ever be required to honor
the guarantee.

Montaup is a 3.27% equity participant in two companies which own and operate
transmission facilities interconnecting New England and the Hydro Quebec system
in Canada.  Montaup has guaranteed approximately $5.2 million of the
outstanding debt of these two companies.  In addition, Montaup and Newport have
minimum rental commitments which total approximately $13.5 million and $1.7
million, respectively under a noncancelable transmission facilities support
agreement for years subsequent to 1995.

Other:  In December 1992, Montaup commenced a declaratory judgment action in
which it sought to have the Massachusetts Superior Court determine its rights
under the Power Purchase Agreement between it and Aquidneck Power Limited
Partnership.  In April 1995 Montaup filed a motion for summary judgement and in
June 1995 the court granted Montaup's motion.  In July, Aquidneck filed for
appeal of the court's decision.

Montaup, EUA and EUA Service intend to vigorously contest the appeal and
continue to believe that Aquidneck's claims have no basis in law.

EUA Cogenex, through its EUA WestCoast (WestCoast) L.P., had under development
a cogeneration facility of approximately 1.5 MW.  The cogeneration facility
experienced numerous start-up delays and cost overruns.  The host of the
facility has taken the position that the energy services agreement between
WestCoast and itself is terminated due to, among other things, failure to
complete the project.  WestCoast disagrees with the host's right to terminate,
but has decided not to contest the host's purported termination.

In June 1993, WestCoast filed a lawsuit against the contractors responsible for
the design and construction of the facility, as well as the surety which issued
a performance bond guaranteeing construction.  Certain defendants in that
action have filed cross-complaints against WestCoast and EUA Cogenex, seeking,
among other things, approximately $300,000 for payments withheld by WestCoast
due to the contractor's deficient performance, contribution and indemnity.  A
contractor has also filed a cross-complaint against the host.  Additionally,
the host has filed a cross-complaint against Cogenex and the other parties in
the litigation, seeking approximately $7 million in damages arising principally
from lost economic advantage.  EUA WestCoast filed its own cross complaint
against the host, affirmatively seeking damages.  EUA WestCoast has secured
defense from insurance carriers for the claims made by the host.

EUA Cogenex intends to vigorously prosecute its claims against the contractors,
surety and host, and defend itself against any cross-complaints.  EUA Cogenex
cannot predict the ultimate resolution of this matter.  As a result of EUA
Cogenex's decision to discontinue cogeneration operations effective as of July
1, 1995, EUA Cogenex has recorded a reserve for its total investment in this
project which is included in the one-time after-tax charge to earnings of
approximately $10.5 million.


REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees and Shareholders of Eastern Utilities Associates

We have audited the accompanying consolidated balance sheets and consolidated
statements of equity capital and preferred stock and indebtedness of Eastern
Utilities Associates and subsidiaries (the Company) as of December 31, 1995 and
1994, and the related consolidated statements of income, retained earnings and
cash flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company as of December 31, 1995  and 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.



Coopers & Lybrand L.L.P.
Boston, Massachusetts
March 5, 1996


REPORT OF MANAGEMENT

The management of Eastern Utilities Associates is responsible for the
consolidated financial statements and related information included in this
annual report.  The financial statements are prepared in accordance with
generally accepted accounting principles and include amounts based on the best
estimates and judgments of management, giving appropriate consideration to
materiality.  Financial information included elsewhere in this annual report is
consistent with the financial statements.

The EUA System maintains an accounting system and related internal controls
which are designed to provide reasonable assurances as to the reliability of
financial records and the protection of assets.  The System's staff of internal
auditors conducts reviews to maintain the effectiveness of internal control
procedures.

Coopers & Lybrand L.L.P., an independent accounting firm, is engaged by EUA to
audit and express an opinion on our financial statements.  Their audit includes
a review of internal controls to the extent required by generally accepted
auditing standards for such audit.

The Audit Committee of the Board of Trustees, which consists solely of outside
Trustees, meets with management, internal auditors and Coopers & Lybrand L.L.P.
to discuss auditing, internal controls and financial reporting matters.  The
internal auditors and Coopers & Lybrand L.L.P. have free access to the Audit
Committee without management present.


<TABLE>
<CAPTION>

QUARTERLY FINANCIAL AND COMMON SHARE INFORMATION  (UNAUDITED)
(Thousands of Dollars, Except Per Share and Share Price Amounts)
<S>                    <C>       <C>       <C>      <C>        <C>      <C>       <C>
                                                               Earnings
                                                               per      Dividends Common Share
                                                  Consolidated Average  Paid Per  Market Price
                       Operating Operating Net         Net     Common   Common
                       Revenues  Income    Income   Earnings    Share   Share     High   Low
FOR THE QUARTERS
ENDED 1995:
   December 31       $  135,327  $   17,274  $   10,989 $ 10,411 $ 0.51  $ 0.40   25      22 1/2
   September 30         143,950      20,687       3,666    3,084   0.15    0.40   24 1/8  21 1/2
   June 30              146,119      14,956       8,405    7,825   0.38    0.40   24 7/8  21 5/8
   March 31             137,967      18,811      11,887   11,306   0.57   0.385   24 1/8  21 3/4

FOR THE QUARTERS
ENDED 1994:
   December 31       $  132,953  $   15,408  $    8,858  $ 8,277  $ 0.42 $ 0.385  23 1/8  21 3/8
   September 30         143,859      18,482      13,900   13,316    0.67   0.385  25 1/8  22
   June 30              137,269      18,304      10,770   10,187    0.52   0.385  25 5/8  22
   March 31             150,197      21,601      16,173   15,590    0.80    0.36  27 3/8  24 5/8
</TABLE>

<TABLE>
<CAPTION>

Consolidated Operating and Financial Statistics (1)
Years Ended December 31,              1995    1994    1993     1992     1991      1990    1985
<S>                                   <C>     <C>     <C>      <C>      <C>      <C>      <C>
ENERGY GENERATED
AND PURCHASED (millions of KWH):
  Generated
   - by Somerset Station             679       658       319       936      957       985    1,316
   - by Nuclear Units                752     1,008     1,033     1,050    1,109     1,635    1,065
   - by Jointly-Owned Units        1,410     1,615     1,809     2,105    2,053     1,793    1,595
   - by Life of the Unit Contracts   236       648       602       793      863       753      697
   - by Newport                                           1          1        1         7
  Interchange with NEPOOL            573       295       360       157      191       298     (387)
  Purchased Power - Unit Power     1,463     1,526     1,396     1,489    1,006       380      223
    Total Generated and Purchased  5,113     5,750     5,520     6,531    6,180     5,851    4,509
OPERATING REVENUES
($ in thousands):
  Residential                   $193,233 $ 190,662 $ 189,470 $ 176,538 $178,812 $ 156,883 $110,682
   Commercial                    169,841   169,241   179,145   170,034  171,732   149,514   98,826
   Industrial                     83,061    81,500    81,445    76,946   78,273    69,885   66,707
   Other Electric Utilities        5,447     4,900     5,098     5,103    4,828     4,317   15,779
   Other                          17,482    17,282    21,790    21,314   17,984    22,748    8,990
   Total Primary Sales Revenues  469,064   463,585   476,948   449,935  451,629   403,347  330,984
   Unit Contracts                 14,800    26,213    22,617    47,875   41,225    43,670   32,526
   Non-Electric                   79,499    74,480    66,912    44,154   29,729    18,668
   Total Operating Revenues     $563,363 $ 564,278 $ 566,477 $ 541,964 $522,583 $ 465,685 $ 333,510
ENERGY SALES (millions of KWH):
   Residential                     1,697     1,678     1,624     1,575    1,579     1,531     1,212
   Commercial                      1,674     1,671     1,704     1,704    1,689     1,623     1,169
   Industrial                        867       850       816       785      777       834       833
   Other Electric Utilities           75        74        61        68       66       130       382
   Other                             128       137       147       147      154       121        29
     Total Primary Sales           4,441     4,410     4,352     4,279    4,265     4,239     3,625
   Losses and Company Use            227       233       247       241      280       249       197
     Total System Requirements     4,668     4,643     4,599     4,520    4,545     4,488     3,822
   Unit Contracts                    445     1,107       921     2,011    1,635     1,363       687
     Total Energy Sales            5,113     5,750     5,520     6,531    6,180     5,851     4,509
NUMBER OF CUSTOMERS:
   Residential                   268,203   263,054   259,654   257,026  255,620   254,928   214,454
   Commercial                     27,401    29,004    30,805    32,851   32,745    32,836    23,161
   Industrial                      1,685     1,603     1,294     1,197    1,172     1,175     1,238
   Other Electric Utilities            8        12        12        15       15        12        15
   Other                              34        34        34        34       34        34        30
     Total Customers             297,331   293,707   291,799   291,123  289,586   288,985   238,898
Average Annual Revenue
   per Residential Customer ($)      720       725       730       687      699       636       516
Average Annual Use per Residential
   Customer (KWH)                  6,327     6,379     6,254     6,128    6,177     6,221     5,652
AVERAGE REVENUE
PER KWH (cents):
   Residential                     11.39     11.36     11.67     11.21    11.32     10.25      9.13
   Commercial                      10.15     10.13     10.51      9.98    10.17      9.21      8.45
   Industrial                       9.58      9.59      9.98      9.80    10.07      8.38      8.01

</TABLE>

(1) Includes financial and operating statistics for Newport Electric
    Corporation from April 1, 1990 and EUA Power Corporation through December
    31, 1990 at which time EUA Power Corporation was deconsolidated for
    financial reporting purposes.

<TABLE>
<CAPTION>

CONSOLIDATED OPERATING AND FINANCIAL STATISTICS<F1>

Years Ended December 31,            1995      1994     1993       1992      1991        1990     1985
<S>                                <C>        <C>      <C>      <C>         <C>          <C>    <C>
CAPITALIZATION ($ in thousands):
   Bonds - Net                $ 279,374 $  288,449  $ 300,389  $ 306,898  $ 346,146 $  363,566 $ 263,500
   Other Long-Term Debt - Net   155,497    166,963    196,427    156,060    142,306     80,029    21,991
   Total Long-Term Debt - Net   434,871    455,412    496,816    462,958    488,452    443,595   285,491
   Preferred Stock - Net         33,155     32,290     31,953     44,346     45,830     50,380    46,536
   Common Equity                375,229    365,443    333,165    266,855    248,598    237,393   208,211
     Total Capitalization     $ 843,255 $  853,145  $ 861,934  $ 774,159  $ 782,880 $  731,368 $ 540,238
CAPITALIZATION RATIOS (%)
   Long-Term Debt                    52         53         57         60         62         61        53
   Preferred Stock                    4          4          4          6          6          7         9
   Common Equity                     44         43         39         34         32         32        38
COMMON SHARE DATA:
   Earnings (Loss) per Average
     Common Share ($)              1.61       2.41       2.44       2.00       1.58      (8.18)<F2>  2.67
   Dividends per Share ($)        1.585      1.515       1.42       1.36       1.45      2.575       2.03
   Payout (%)                      98.4       62.9       58.2       68.0       91.8      (31.5)      76.0
   Average Common
    Shares Outstanding       20,238,961 19,671,970 18,391,147 17,039,224 16,608,090 15,917,255 11,156,941
   Total Common Shares
     Outstanding             20,436,764 19,936,980 19,032,598 17,237,788 16,831,062 16,352,708 11,376,471
   Book Value per Share ($)       18.36      18.33      17.50      15.48      14.77      14.52      18.30
   Percent Earned On Average
     Common Equity                  8.8       13.6       15.0       13.2       10.8      (42.5)      14.9
   Market Price ($):
     High                            25         27 3/8     29 7/8     25 1/4     25         41 1/2     26 7/8
     Low                             21 1/2     21 3/8     23 7/8     20 3/8     15 3/4     20 3/4     16 3/8
     Year End                        23 5/8     22         28         24 3/4     20 5/8     23 7/8     25 7/8
Miscellaneous ($ in thousands):
 Total Construction
    Expenditures ($)             78,461     50,870    76,770      71,914     60,174    133,629     78,192
   Cash Construction
    Expenditures ($)             77,923     50,519    76,391      71,365     57,570     59,929     54,406
   Internally Generated
    Funds ($)                    90,883     79,274    79,691      48,933     63,681     35,024<F3> 27,501
   Internally Generated Funds as
    a % of Cash Construction (%)  116.6      156.9     104.3        68.6      110.6       58.4<F3>   50.5
   Installed Capability - MW      1,191      1,212     1,256<F4>   1,325      1,349      1,359        987
   Less: Unit Contract Sales - MW    35         85        85          85        216         86        110
   System Capability - MW         1,156      1,127     1,171       1,240      1,133      1,273        877
   System Peak Demand - MW          931        921       854         849        879        850        738
   Reserve Margin (%)              24.2       22.4      37.1        46.1       28.9       49.8       18.9
   System Load Factor (%)          57.2       57.5      61.5        57.5       59.0       60.3       59.1
   Sources of Energy (%):
     Nuclear                       28.2       33.8      34.0        34.1       31.3       37.8       26.2
     Coal                          14.7       11.7       5.4        18.6       21.0       22.6       34.1
     Oil                           25.5       20.0      28.3        12.7       26.9       37.9       39.7
     Gas                           26.5       28.4      26.0        29.3       17.2        1.7
     Other                          5.1        6.1       6.3         5.3        3.6
   Cost of Fuel (Mills per KWH):
     Nuclear                        6.3        6.1       7.5         7.7        8.7        8.3        7.0
     Coal                          20.3       20.9      24.1        21.2       21.4       21.2       23.7
     Oil                           30.2       27.1      25.5        26.0       18.9       26.3       41.2
     Gas                           14.3       14.1      15.1        13.0       16.2       30.6
     All Fuels Combined            16.7       14.5      15.5        14.8       15.7       18.4       26.3

<FN>
<F1> Includes financial and operating statistics for Newport Electric Corporation from April 1, 1990
    and EUA Power Corporation through December 31, 1990 at which time EUA Power Corporation was
    deconsolidated for financial reporting purposes.
<F2>  After additional charges to 1990 earnings.
<F3> Excludes EUA Power Corporation's cash interest payments.
<F4> Excludes the 69 MW Somerset Station Unit #5 which was placed in deactivated reserve on January
    25, 1994.
</FN>
</TABLE>

SHAREHOLDER INFORMATION

Shares of Eastern Utilities Associates are listed on the New York and Pacific
Stock Exchanges, under the ticker symbol EUA. As of February 1, 1996, there
were 12,161 common shareholders of record.

Form 10-K
A copy of EUA's 1995 Annual Report on Form 10-K filed with the Securities and
Exchange Commission is available to shareholders without charge by writing to
us.

Annual Meeting
The 1996 Annual Meeting of Shareholders will be held on
Monday, May 20, 1996, at 9:30 a.m., in the
Enterprise Room, 5th Floor
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts

Registrar, Transfer Agent and Dividend Disbursing Agent for Common and
Preferred Shares
Investor Relations
Mail Stop 450264
Boston EquiServe, L.P.
Post Office Box 644
Boston, MA 02102-0644
1-800-736-3001 (Toll-Free)

Lost or Stolen Stock Certificates
If your stock certificate is lost, destroyed or stolen, you should notify the
transfer agent immediately so a "stop transfer" order can be placed on the
missing certificate.  The transfer agent then will send you the required
documents to obtain a replacement certificate.

Dividends
Schedule of anticipated record and payment dates for 1996 dividends on EUA
Common Shares:
Record         Payment
February 1     February 15
May 1          May 15
August 1       August 15
November 1     November 15

Direct Deposit Plan
EUA Shareholders have the option of having their EUA Dividends deposited
directly into their bank accounts.  If you wish to participate, contact EUA
investor relations at 1-800-736-3001 (Toll-Free).

Replacement of Dividend Checks
If you do not receive your dividend check within ten business days after the
dividend payment date, or if your check is lost, destroyed or stolen, you
should notify the disbursing agent in writing for a replacement.

Dividend Reinvestment and Common Share Purchase Plan
A Dividend Reinvestment and Common Share Purchase Plan is available to all
registered shareholders and EUA System company employees.  It is a simple and
convenient method of purchasing additional shares of EUA common stock.

Participants also may make cash payments to purchase additional shares.  You
may obtain complete details by writing to Clifford J. Hebert Jr.,
Treasurer/Secretary at the address shown below under "Financial Community
Inquiries."

Duplicate Mailings
Duplicate mailings are costly.  Shareholders may be receiving duplicate copies
of annual and quarterly reports due to multiple stock accounts in the same
household.  To eliminate additional mailings of these reports, please write to
us and enclose label(s) or label information from the duplicate reports.
Dividend checks and proxy material will continue to be sent for each account on
record.

   EUA is required by law to create a separate account for each name when stock
is held in similar but different names (e.g., John A.  Smith, J. A. Smith, John
A.  and Mary K. Smith, etc.).  Please contact the Company for instructions if
you wish to consolidate multiple accounts.

Financial Community Inquiries
Institutional investors and securities analysts should direct
inquiries to:
Clifford J. Hebert, Jr.,  Treasurer/Secretary
Eastern Utilities Associates
Post Office Box 2333
Boston, MA 02107
(617) 357-9590

The name Eastern Utilities Associates is the designation of the Trustees for
the time being under a Declaration of Trust dated April 2, 1928, as amended.
All persons dealing with Eastern Utilities Associates must look solely to the
trust property for the enforcement of any claims against Eastern Utilities
Associates, as neither the Trustees, Officers nor Shareholders assume any
personal liability for obligations entered into on behalf of Eastern Utilities
Associates.


Trustees
Russell A. Boss (A, P)
President and Chief Executive Officer, A. T. Cross Company
Lincoln, Rhode Island

Paul J. Choquette, Jr. (C, P)
President, Gilbane Building Company
Providence, Rhode Island

Peter S. Damon (A, P)
President and Chief Executive Officer, Bank of Newport
Newport, Rhode Island

Peter B. Freeman (A, F)
Corporate Director and Trustee
Providence, Rhode Island

Larry A. Liebenow (A, F)
President and Chief Executive Officer, Quaker Fabric Corporation
Fall River, Massachusetts

Jacek Makowski (F, P)
Investor
Boston, Massachusetts

Wesley W. Marple, Jr. (A, C)
Professor of Business Administration, Northeastern University
Boston, Massachusetts

Donald G. Pardus
Chairman of the Board of Trustees and
Chief Executive Officer of the Association

Margaret M. Stapleton (C, F)
Vice President, John Hancock Mutual Life Insurance Company
Boston, Massachusetts

John R. Stevens
President and Chief Operating Officer of the Association

W. Nicholas Thorndike (C, F)
Corporate Director and Trustee
Brookline, Massachusetts

A- Indicates member of Audit Committee
C- Indicates member of Compensation and Nominating Committee
F- Indicates member of Finance Committee
P- Indicates member of Pension Trust Committee


EUA Officers
Donald G. Pardus
Chairman of the Board of Trustees
and Chief Executive Officer

John R. Stevens
President
and Chief Operating Officer

John D. Carney
Executive Vice President

Robert G. Powderly
Executive Vice President

Richard M. Burns
Comptroller

Clifford J. Hebert, Jr.
Treasurer and Secretary

"Picture of EUA Officers as Follows:"

     Left to Right (seated):
     Donald G. Pardus, Chairman and Chief Executive Officer;  John R.
     Stevens, President and Chief Operating Officer.

     Left to Right (standing):
     Clifford J. Hebert, Jr., Treasurer and Secretary;   Robert G.
     Powderly, Executive Vice President;   John D. Carney, Executive
     Vice President.
     Not pictured:  Richard M. Burns, Comptroller