10-K

[DESCRIPTION] BOSTON EDISON COMPANY 1994 FORM 10-K
 1
              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549

                             FORM 10-K


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

     For the fiscal year ended December 31, 1994
                                      OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from _________ to _________

               Commission file number 1-2301
                    BOSTON EDISON COMPANY
        (Exact name of registrant as specified in its charter)
                                            
  Massachusetts                                       04-1278810         
--------------------------------                   ---------------------
(State or other jurisdiction  of                  (I.R.S. Employer
incorporation or organization)                    Identification No.)

 800 Boylston Street, Boston, Massachusetts             02199              
--------------------------------------------       ---------------------
(Address of principal executive offices)                (Zip Code)



Registrant's telephone number, including area code:  617-424-2000

Securities registered pursuant to Section 12(b) of the Act:

                                                       Name of each exchange
   Title of each class                                 on which registered
   -------------------                                 --------------------
                                                    
   Common stock, par value $1 per share                New York Stock Exchange
                                                       Boston Stock Exchange
   Cumulative preferred stock:
7.75% Series, par value $100 per share                 New York Stock Exchange
 (represented by depositary shares-each
 represents one-fourth interest in par value)
8.25% Series, par value $100 per share                 New York Stock Exchange
 (represented by depositary shares-each
 represents one-fourth interest in par value)

   Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.  [  ]

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  YES  X   NO     

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 28, 1995 computed by reference to the last reported
sale price of the common stock, $1 par value, of the registrant of the New 
York Stock Exchange composite tape on that date: $1,117,923,951.

Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.


            CLASS                   OUTSTANDING AT FEBRUARY 28, 1995
        --------------              --------------------------------
                                           
        Common Stock, $1 par value            45,629,549 shares


                     DOCUMENTS INCORPORATED BY REFERENCE

 Part Document
 ---- --------
   
  III Portions of definitive proxy statement dated March 27, 1995 for Annual 
      Meeting of Stockholders to be held May 12, 1995.


 2
Boston Edison Company
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Form 10-K Annual Report
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December 31, 1994
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Part I                                                                Page
--------------------------------------------------------------------------
                                                                    
Item  1.  Business                                                      2

Item  2.  Properties and Power Supply                                   8

Item  3.  Legal Proceedings                                            11

Item  4.  Submission of Matters to a Vote of Security Holders          11


Part II
--------------------------------------------------------------------------
Item  5.  Market for the Registrant's Common Stock and Related
          Stockholder Matters                                          15

Item  6.  Selected Financial Data                                      16

Item  7.  Management's Discussion and Analysis                         17

Item  8.  Financial Statements and Supplementary Financial
          Information                                                  27

Item  9.  Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure                          47


Part III                                                          
--------------------------------------------------------------------------

Item 10.  Directors and Executive Officers of the Registrant           48

Item 11.  Executive Compensation                                       48

Item 12.  Security Ownership of Certain Beneficial Owners and
          Management                                                   49

Item 13.  Certain Relationships and Related Transactions               49

Part IV                                                            
--------------------------------------------------------------------------

Item 14.  Exhibits, Financial Statement Schedules and Reports on  
          Form 8-K                                                     50

                                       1
 3
                                   Part I
                                   ------
Item 1.  Business
-----------------

(a) General Development of Business
-----------------------------------

Boston Edison Company (the Company) is an investor-owned regulated public 
utility incorporated in 1886 under Massachusetts law.  The Company operates in 
the energy and energy services business, which includes the generation, 
purchase, transmission, distribution and sale of electric energy and the 
development and implementation of demand side management (DSM) programs.

In 1993 the Company established an unregulated subsidiary, Boston Energy 
Technology Group (BETG), following approval from the Massachusetts Department 
of Public Utilities (DPU).  The Company has authority to invest up to $45 
million in this wholly-owned subsidiary.  BETG engages in demand side 
management activities and businesses involving electric transportation and the 
related infrastructure through its two wholly-owned subsidiaries.  In 1994 
BETG acquired a substantial majority interest in two additional businesses.  
REZ-TEK International Corporation produces systems that treat cooling water 
used in commercial and industrial air conditioning systems in an energy 
efficient and environmentally sound manner, and Coneco Corporation provides 
engineering and project management services to energy and water conservation 
project developers and contractors.  The Company does not currently have a 
substantial investment in BETG and does not expect the subsidiary to 
significantly impact the results of operations in the next several years.

(b) Financial Information about Industry Segments
-------------------------------------------------

The Company operates primarily as a regulated electric public utility, 
therefore industry segment information is not applicable.

(c) Narrative Description of Business
-------------------------------------
Principal Products and Services

The Company supplies electricity at retail to an area of 590 square miles 
encompassing the City of Boston and 39 surrounding cities and towns.  The 
population of the area served with electricity at retail is approximately 1.5 
million.  In 1994 the Company served an average of 656,000 customers.  The 
Company also supplies electricity at wholesale for resale to other utilities 
and municipal electric departments.  Revenues by class for the last three 
years consisted of the following:


                                                 1994       1993       1992
---------------------------------------------------------------------------
                                                               
Retail electric revenues:
  Commercial                                      50%        49%        48%
  Residential                                     28%        28%        27%
  Industrial                                       9%        10%        10%
  Other                                            2%         1%         2%
Wholesale and contract revenues                   11%        12%        13%
===========================================================================

                                       2
 4
Sources and Availability of Fuel

The Company owns two stations whose generating units are fueled by oil, 
natural gas or both, one nuclear power station and ten combustion turbine 
generators.  See the Company-Owned Facilities section of Item 2.  The 
Company's generation by type of fuel and the cost of fuel for each of the last 
five years were as follows:

             Percentage of Company                  Average Cost of Fuel
             Generation by Source (%)               ($ per Million BTU)       
         --------------------------------     --------------------------------
         1994   1993   1992   1991   1990     1994   1993   1992   1991   1990
------------------------------------------------------------------------------
                                            
Oil      27.8   31.3   33.7   42.8   33.6     2.35   2.38   2.40   2.60   2.76
Gas      31.6   24.3   25.7   24.9   33.3     2.28   2.67   2.55   2.08   2.35
Nuclear  40.6   44.4   40.6   32.3   33.1     0.50   0.51   0.52   0.56   0.59
==============================================================================

The majority of the Company's residual oil purchases consists of imported oil 
acquired primarily from international suppliers.  The Company has contracts 
with major oil companies that can supply most of its estimated requirements, 
assuming no major disruptions in oil producing regions.  Within contract 
provisions, the Company has the ability to purchase significant amounts of oil 
in the spot market when it is economical to do so.

Most of the Company's natural gas is supplied on an interruptible basis by 
contract.  These contracts permit interruptions in deliveries by the supplier 
when natural gas pipeline capacity is unavailable.  Deliveries of natural gas 
to the Company's generating units from suppliers may also be dependent on the 
availability of pipeline capacity to the New England region and competitive 
forces prevailing in the pipeline industry.  Beginning in April 1995 the 
Company will be required to operate New Boston Station using exclusively 
natural gas as fuel, except in certain emergency circumstances, as part of a 
1991 consent order with the Massachusetts Department of Environmental 
Protection (DEP).  The Company has made arrangements for a firm supply of 
natural gas to run the station at a minimum level and is developing a least-
cost plan for operation beyond this minimum level involving principally the 
utilization of interruptible gas supplies or short-term capacity purchases.

In order to obtain nuclear fuel for use at Pilgrim Station the Company must 
obtain supplies of uranium concentrates and secure contracts for these 
concentrates to go through the processes of conversion, enrichment and 
fabrication of nuclear fuel assemblies.  The Company currently has contracts 
for supplies of uranium concentrates and the processes of conversion, 
enrichment and fabrication through 1998, 2000, 1998 and 2012, respectively.

Franchises

Through its charter, which is unlimited in time, the Company has the right to 
engage in the business of producing and selling electricity, steam and other 
forms of energy, has powers incidental thereto and is entitled to all the 
rights and privileges of and subject to the duties imposed upon electric 
companies under Massachusetts laws.  The locations in public ways for the 
Company's electric transmission and distribution lines are obtained from 
municipal and other state authorities which, in granting these locations, act 
as agents for the state.  In some cases the action of these authorities is 
subject to appeal to the DPU.  The rights to these locations are not limited 
in time, but are not vested and are subject to the action of these authorities 
and the legislature.
                                       3
 5
Seasonal Nature of Business

The Company's kWh sales and revenues are typically higher in the winter and 
summer than in spring and fall as sales tend to vary with weather conditions.  
In addition, the Company bills higher base rates to commercial and industrial 
customers during the billing months of June through September as mandated by 
the DPU.  Accordingly, a significant portion of annual earnings occurs in the 
Company's third quarter.  See Selected Consolidated Quarterly Financial Data 
(Unaudited) in Item 8.

Working Capital Practices

The Company has no special practices with respect to working capital that 
would be considered unusual for the electric utility industry or significant 
for the understanding of the Company's business.  

Customer Dependence

No material portion of the Company's business is dependent upon one or a few 
customers.

Government Contracts

No material portion of the Company's business is subject to renegotiation or 
termination of government contracts or subcontracts.

Competitive Conditions

The Company is operating in an increasingly competitive environment.  The 
electric utility business is in a period of transition from a traditional 
rate-regulated environment based on cost recovery to an environment with both 
competition and modified regulation.  The effects of competition to date have 
been most evident in the wholesale electric market.  In response to increased 
competition from other electric utilities and non-utility generators to sell 
electricity for resale, the Company has secured long-term power supply 
agreements with its five wholesale customers.  These agreements set the 
Company's rates through the year 2002 and beyond.

Direct competition with other electric utilities and other energy suppliers 
for retail electricity sales is still subject to substantial limitations, but 
there is potential for these limitations to be reduced in the future.  The 
Company and other Massachusetts electric utilities are currently protected in 
several ways by the DPU and municipal statutes against other utilities 
offering service to retail customers in their service areas.  Another electric 
utility may not extend its service area to include municipalities other than 
those named in its agreement of association or charter without DPU 
authorization granted after notice and public hearing.  Also, another company 
may not obtain an initial location for its lines in a municipality served by 
the Company without the approval of municipal authorities, subject to the 
right of appeal to the DPU.  Additionally, a municipality may not engage in 
the electric utility business without complying with statutes requiring 
specific city or town approval and the purchase of Company property within 
municipality limits.

However, the Company is currently experiencing some forms of competition in 
the retail electric market.  Current legislation allows industrial and large 
commercial customers to own and operate their own electric generating units.  
Retail customers may also substitute natural gas or oil for electricity as 
fuel for heating and cooling purposes.  Large facilities may factor the cost 
                                       4       
 6
of electricity into their decisions to relocate into or out of a given service 
territory.  In addition, the DPU is currently investigating the benefits of 
restructuring the electric utility industry in Massachusetts and encouraging 
utilities to devise and propose incentive ratemaking plans.  The Company is 
responding to the current and anticipated retail competitive challenges in 
several ways.  These include actively participating in the formulation of 
regulatory policy concerning potential stranded investments, planning to not 
seek additional base rate increases for at least five years, continuing 
aggressive control of costs and increasing operating efficiencies.

Research Activities

The Company actively participates in several industry-sponsored research 
activities.  These expenditures, included in other operations and maintenance 
expense on the consolidated income statement in Item 8, were not material in 
1994.

Environmental Matters

The Company is subject to numerous federal, state and local standards with 
respect to the management of wastes, air and water quality and other 
environmental considerations.  These standards can require modification of 
existing facilities or curtailment or termination of operations at these 
facilities, delay or discontinue construction of new facilities and increase 
capital and operating costs by substantial amounts.  Noncompliance with 
certain standards can, in some cases, also result in the imposition of 
monetary civil penalties.  The Company believes that its operating facilities 
are in substantial compliance with currently applicable statutory and 
regulatory environmental requirements.

The Company's capital expenditures for environmental purposes during the five 
years 1990 through 1994 totalled approximately $137 million.  Environmental-
related capital expenditures for the years 1995 through 1999 are currently 
expected to total approximately $47 million, including $11 million in both 
1995 and 1996.  These amounts exclude costs associated with asbestos removal 
which totalled approximately $8 million during the five years 1990 through 
1994 and are currently expected to total approximately $3 million for the 
years 1995 through 1999.  The Company's capital expenditures for environmental 
purposes through 1994 included approximately $80 million related to certain 
improvements in the emission control systems at New Boston Station as 
discussed in the Environmental section of Other Matters in Item 7.  
Substantial additional expenditures could be required as changes in 
environmental requirements occur.

The Company is required to clean up 48 properties that it owns or operates in 
which hazardous materials were released in the past.  In addition, the Company 
has exposure to potential joint and several liability for the cleanup of ten 
multi-party hazardous waste sites where it is alleged to have generated, 
transported or disposed of hazardous waste at the sites.  Complex litigation 
or negotiations among the parties and with regulatory authorities is in 
process concerning the scope and cost of cleanup and the sharing of costs 
among the potentially responsible parties for several of these sites.  The 
Company's potential hazardous waste liabilities are described further in the 
Environmental section of Item 7.

Spent nuclear fuel and low-level radioactive waste (LLW) result from the 
operations of Pilgrim Station.  Uncertainties currently exist regarding the 
ultimate disposal of both the spent nuclear fuel and LLW.  See Note D to the 
                                       5
 7

consolidated financial statements in Item 8 for further discussion regarding 
spent nuclear fuel and LLW.

As a facility which treats and stores hazardous wastes, Pilgrim Station is 
required to be licensed by the United States Environmental Protection Agency 
(EPA).  Pilgrim has received interim status approval for the treatment and 
storage of certain wastes that are both hazardous and radioactive.

The Company is subject to regulation by the EPA and the DEP relative to 
emissions from its fossil-fired generating units under federal and 
Massachusetts clean air laws, including the 1990 Clean Air Act Amendments.  
These regulations require the installation of various emissions controls and, 
in certain cases, the use of low sulfur content fuels.  The Company's current 
status regarding compliance with DEP regulations and the 1990 Clean Air Act 
Amendments is discussed in the Environmental section of Item 7.

The Company is also subject to regulation by the EPA and the DEP with respect 
to discharges of effluent from its generating stations into receiving waters.  
The federal Clean Water Act and the Massachusetts Clean Waters Act require the 
Company to receive permits that limit discharges in accordance with applicable 
water quality standards and are subject to renewal every five years.  The 
Company has received the required discharge permits for each of its electric 
generating stations.  

There are public concerns regarding electromagnetic fields (EMF) associated 
with electric transmission and distribution facilities and appliances and 
wiring in buildings and homes.  These concerns include the possibility of 
adverse health effects as well as perceived effects on property values.  Refer 
to the Environmental section of Item 7 for a discussion of the EMF issue.  

Number of Employees

The Company had 4,026 full-time and 25 part-time utility employees as of the 
end of 1994, 2,560 of which are represented by two locals of the Utility 
Workers Union of America, AFL-CIO.  In 1994 the Company and the locals signed 
new six-year labor contracts.  BETG had 46 full-time employees at the end of 
1994.

(d) Financial Information about Foreign and Domestic Operations and Export 
--------------------------------------------------------------------------
Sales
-----

See Principal Products and Services for information regarding the geographical 
area served by the Company and revenues by class for the last three years.

(e) Additional Information
--------------------------
Regulation

The Company and its wholly-owned subsidiary, Harbor Electric Energy Company 
(HEEC), operate primarily under the authority of the DPU, whose jurisdiction 
includes supervision over retail rates for electricity, financing, investing 
and accounting.  In addition, the Federal Energy Regulatory Commission has 
jurisdiction over various phases of the Company's business including rates for 
power sold at wholesale for resale, facilities used for the transmission or 
sale of such power, certain issuances of short-term debt and regulation of the 
system of accounts.  The Company's subsidiary BETG and its subsidiaries are 
not subject to such regulation.  
                                       6
 8

The Company is required to submit to the DPU annual performance standards 
applicable to its generating units and other units from which the Company 
purchases power through long-term contracts.  Under this generating unit 
performance program, the Company provides quarterly progress reports to the 
DPU.  The DPU has the right to reduce subsequent fuel and purchased power 
billings if it finds that the Company has been unreasonable or imprudent in 
the operation of its generating units or in the procurement of fuel.  The 
Company has not yet received orders from the DPU for the performance years 
ended October 1993 and October 1994.  The Company believes that its current 
provision for refunds is sufficient to cover potential refunds.

The Nuclear Regulatory Commission (NRC) has broad jurisdiction over the 
siting, construction and operation of nuclear reactors with respect to public 
health and safety, environmental matters and antitrust considerations.  A 
license granted by the NRC may be revoked, suspended or modified for failure 
to construct or operate a facility in accordance with its terms.  The Company 
currently holds an operating license for Pilgrim Station which was issued in 
1972 and expires in 2012.

Continuing NRC review of existing regulations and certain operating 
occurrences at other nuclear plants have periodically resulted in the 
imposition of additional requirements for all domestic nuclear plants, 
including Pilgrim Station.  NRC inspections and investigations can result in 
the issuance of notices of violation.  These notices can also be accompanied 
by orders directing that certain actions be taken or by the imposition of 
monetary civil penalties.  In addition, the Company could undertake certain 
actions regarding Pilgrim Station at the request or suggestion of its insurers 
or the Institute of Nuclear Power Operations (INPO), a voluntary association 
of nuclear utilities dedicated to the promotion of safety and reliability in 
the operation of nuclear power plants.

Nuclear power continues to be a subject of political controversy and public 
debate manifested from time to time in the form of requests for various kinds 
of federal, state and local legislative or regulatory action, direct voter 
initiatives or referenda or litigation.  The Company cannot predict the 
extent, cost or timing of any modifications to Pilgrim Station which could be 
necessary in the future as a result of additional regulatory or other 
requirements nor can it determine the effect of such future requirements on 
the continued operation of Pilgrim Station.  The Company continues to evaluate 
the operation of the station from the standpoint of safety, reliability and 
economics and believes that such continued operation is in the best interests 
of the Company and its customers.

Capital Expenditures and Financings

The Company's most recent estimates of capital expenditures, allowance for 
funds used during construction (AFUDC), long-term debt maturities and sinking 
fund requirements for the years 1995 through 1999 are as follows:

(in thousands)       1995         1996         1997         1998         1999
-----------------------------------------------------------------------------
                                                      
Plant
 expenditures    $200,000     $172,000     $172,000     $159,000     $156,000
Nuclear fuel
 expenditures      11,000       18,000       13,000       24,000       13,000
AFUDC (1)           6,000        5,000        4,000        5,000        4,000
Long-term debt    100,600      101,600      101,600      101,600        1,600
Preferred stock
 sinking fund       2,000        2,000        2,000        2,000        2,000
=============================================================================
                                       7
 9


(1)   Excludes estimated AFUDC on nuclear fuel of approximately $1,000 per
year.  The estimated AFUDC rate varies from 5.0% to 6.5%.

The Company conducts a continuing review of its capital expenditure and 
financing programs.  These programs and the estimates shown above are 
therefore subject to revision due to changes in regulatory requirements, 
environmental standards, availability and cost of capital, interest rates and 
other assumptions.  In addition, depending upon the outcome of certain DEP air 
quality modeling studies currently in progress, the Company could be required 
to make additional expenditures by 1999 in order to comply with the provisions 
of the 1990 Clean Air Act Amendments.  The extent of any additional 
expenditures is uncertain at this time.  

Plant expenditures in 1994 were approximately $199 million consisting 
primarily of additions to the Company's distribution system and fossil and 
nuclear generation facilities.  Significant projects included spending of 
approximately $13 million for the replacement of electric system property, 
$10.5 million for a new energy control center, $10 million for a new 
substation and $9 million for the replacement of the main turbine low pressure 
rotors at Pilgrim Station.

The Company spent approximately $58 million on its DSM programs in 1994, of 
which $37 million was capitalized and is being collected from customers over 
six years.  DSM expenditures for 1995 are currently estimated to be 
approximately $43 million.  Beginning in 1995 all costs will be collected 
primarily in the year incurred in accordance with an order from the DPU.

In 1994 the DPU approved the Company's financing plan to issue up to $500 
million of securities through 1996 and to use the proceeds to refinance short 
and long-term securities and for capital expenditures.  See Note H to the 
consolidated financial statements in Item 8 for specific information relating 
to the Company's financing activities.

Item 2.  Properties and Power Supply
------------------------------------
Company-Owned Facilities

The Company's total electric generation capacity as of December 31, 1994 
consisted of the following:

                                        Maximum
                                        Capacity                    Year
Unit                 Location             (MW)       Type         Installed	
---------------------------------------------------------------------------
                                                         
Pilgrim Nuclear      Plymouth, Mass.       669      Nuclear          1972
 Power Station

New Boston Station   South Boston, Mass.   760      Fossil        1965-1967
 Units 1 and 2

Mystic Station       Everett, Mass.
 Units 4-5-6                               399      Fossil        1957-1961
 Unit 7                                    592      Fossil           1975

Combustion turbine   Various               302      Fossil        1966-1971 
 generators (ten)                                                           
============================================================================

                                       8
 10

All of the Company's steam fossil fuel-fired generating units are located at 
tide water and have access to fuel oil storage and/or natural gas or oil 
pipelines from nearby suppliers.  

The Company is also a 5.888% joint owner in W.F. Wyman Unit 4.  The 619 MW 
oil-fired unit located in Yarmouth, Maine began operations in 1978 and is 
operated by Central Maine Power Company.

Additional electric generation capacity is available to the Company through 
its contractual arrangements with other utilities and non-utilities and its 
participation in the New England Power Pool as further described in this item.  

The Company's significant items of property consist of electric generating 
stations, substations and certain service centers and are generally located on 
Company-owned land.  The Company's high-tension transmission lines are 
generally located on land either owned by the Company or subject to easements 
in its favor.  The Company's low-tension distribution lines and fossil fuel 
pipelines are located principally on public property under permission granted 
by municipal and other state authorities.

As of December 31, 1994 the Company's transmission system consisted of 362 
miles of overhead circuits operating at 115, 230 and 345 kV and 156 miles of 
underground circuits operating at 115 and 345 kV.  The substations supported 
by these lines are 44 transmission or combined transmission and distribution 
substations with transformer capacity of 10,112 megavolt amperes (MVA), 70 
distribution substations with transformer capacity of 1,213 MVA and 18 primary 
network units with 88 MVA capacity.  In addition, high tension service was 
delivered to 231 customers' substations.  The overhead and underground 
distribution systems cover 4,652 and 892 miles of streets, respectively.  
HEEC, the Company's regulated subsidiary, has a distribution system that 
consists principally of a 4.1 mile 115kV submarine distribution line and a 
substation which is located on Deer Island in Boston, Massachusetts.

The Massachusetts Energy Facilities Siting Board (EFSB) must approve Company 
plans for the construction of certain new generation or transmission 
facilities based upon findings that such facilities are consistent with state 
public health, environmental protection and resource use and development 
policies.  The Company currently has no proceedings before the EFSB.

Long-Term Power Contracts

Refer to Note L to the consolidated financial statements in Item 8 for further 
information regarding the following contracts.  The Company also has short-
term agreements with several other utilities for varying periods for purchases 
of system and unit power, for sales of Company system and unit power and for 
transmission services.

Utility Purchase Contracts:
--------------------------

The Company has a long-term contract with a subsidiary of Commonwealth Energy 
System in which it receives 25% of the output of an oil-fired electric 
generating plant.  The Company is obligated to pay 25% of the unit's fixed and 
operating costs plus an annual return on investment.

The Company has two long-term purchased power contracts with the Massachusetts 
Bay Transportation Authority (MBTA) for the availability of two of the MBTA's 
jet turbines.  The MBTA retains the right to utilize the jets for its own 
emergency use and for testing purposes while the Company retains New England 
Power Pool credit for their capacity and output.  
                                       9
 11

The Company owns 9.5% of the common stock of Connecticut Yankee Atomic Power 
Company, which operates a nuclear generating unit.  The Company is entitled to 
receive 9.5% of the unit's output and is obligated to pay Connecticut Yankee 
9.5% of its fixed and operating costs plus an annual return on investment.

Non-Utility Generator Purchase Contracts:
----------------------------------------

The Company currently purchases 535 MW of capacity and associated energy from 
non-utility generators.  These purchases are from Ocean State Power, Northeast 
Energy Associates, L'Energia and MassPower.  In addition, the Company 
purchases power from two small hydro facilities.  

In March 1995 the Company received a decision from the Massachusetts Supreme 
Judicial Court (SJC) regarding the Company's appeal of a 1994 DPU order that 
reaffirmed a 1993 order requiring it to purchase power from an independent 
power producer (see Resource regulation in Item 7).  The SJC decision reversed 
the DPU order and remanded the case to the department for further 
consideration of evidence.

Sales Contracts:
---------------

The Company has agreements with Commonwealth Electric Company, a subsidiary of 
Commonwealth Energy System, and with Montaup Electric Company, a subsidiary of 
Eastern Utilities Associates, under which Commonwealth and Montaup each 
purchase 11% of the capacity and corresponding energy of Pilgrim Station and 
pay 11% of the unit's fixed and operating costs plus an annual return on 
investment.  Commonwealth and Montaup have also agreed to indemnify the 
Company to the extent of 11% each of all losses, liability or damage not 
covered by insurance resulting from the operation, condemnation, shutdown or 
retirement of the unit.  In addition, the Company has similar agreements with 
multiple municipal electric companies for a total of 3.7% of the capacity and 
corresponding energy of Pilgrim Station.

New England Power Pool

The Company is a member of the New England Power Pool (NEPOOL), a voluntary 
association of electric utilities in New England responsible for the 
coordination, monitoring and directing of the operations of the major 
generating and transmission facilities in the region.  To obtain maximum 
benefits of power pooling, the electric facilities of all member companies are 
operated by NEPOOL as if they were a single power system.  This is 
accomplished through the use of a central dispatching system that uses the 
lowest cost generation and transmission equipment available at any given time.  
This operation is the responsibility of NEPOOL's central dispatch center, the 
New England Power Exchange (NEPEX).  As a result of its participation in 
NEPOOL, the Company's operating revenues and costs are affected to some extent 
by the operations of the other members.  The dispatching of Company-owned 
generating facilities by NEPEX may be affected by minimally increasing energy 
requirements and any additions to New England generation capacity.

                                       10
 12


The table below sets forth certain information as of the date of the Company's 
1994-1995 winter and 1994 summer peak loads:

                                     February 6, 1995     July 21, 1994
                                     (winter 1994-95)     (summer 1994)	
------------------------------------------------------------------------------
                                                     
NEPEX utilities installed capacity:
  Seasonal maximum rating               25,645 MW          24,602 MW
  Seasonal normal rating                25,299 MW          24,379 MW
NEPEX peak load (estimate)              19,205 MW          20,519 MW
Company territory peak load              2,473 MW           2,798 MW
==============================================================================

The Company's net capacity was 3,561 MW at its winter peak and 3,484 MW at its 
summer peak.  Its corresponding NEPOOL capacity obligations were estimated to 
be 3,379 MW and 3,306 MW, respectively.

NEPOOL participants have two agreements with Hydro-Quebec of Canada for hydro-
electric power.  The first agreement, Phase I, provides up to three million 
MWH of hydro-electric power to NEPOOL annually through 1997.  The second 
agreement, Phase II, is a firm contract that provides seven million MWH of 
hydro-electric power annually through 2001.  The price of the Phase II energy 
is based on the average cost of fossil fuel in New England for the previous 
year.  The contract price is 80% of that average through 1996 and will be 95% 
of that average in 1997-2001.  The Company receives capacity credit through 
NEPOOL for approximately 11% of the generation equivalent of the total Hydro-
Quebec interconnection.

The Company has an approximately 11% equity ownership interest in the two 
companies which own and operate the Phase II facilities.  All equity 
participants are required to guarantee, in addition to their own share, the 
total obligations of those participants who do not meet certain credit 
criteria.  Amounts so guaranteed by the Company were approximately $21 million 
at December 31, 1994.

Item 3.  Legal Proceedings
--------------------------

In 1991 the Company was named in a lawsuit brought in the United States 
District Court for the District of Massachusetts alleging discriminatory
employment practices under the Age Discrimination in Employment Act of 1967 
concerning 46 employees affected by the Company's 1988 reduction in force.
Legal counsel continues to vigorously defend this case.  Based on the 
information presently available the Company does not expect that this 
litigation or certain other legal matters in which it is currently involved
will have a material impact on financial condition.  However, an unfavorable
decision ordered against the Company could have a material impact on the
results of a reporting period.

See also Environmental Matters in Item 1 for a discussion of legal issues 
involving hazardous waste sites.

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

There were no matters submitted to a vote of security holders during the 
fourth quarter of 1994.

                                       11


 13
Executive Officers of the Registrant
------------------------------------
The names, ages, positions and business experience during the last five years 
of all the executive officers of Boston Edison Company and its subsidiaries as 
of March 1, 1995 are listed below.  There are no family relationships between 
any of the officers of the Company, nor any arrangement or understanding 
between any Company officer and another person pursuant to which the officer 
was elected.  Officers of the Company hold office until the first meeting of 
the directors following the next annual meeting of the stockholders and until 
their respective successors are chosen and qualified. 







                                            Business Experience
Name, Age and Position                      During Past Five Years
----------------------                      ----------------------
                                         
Thomas J. May, 47                           Chairman of the Board and Chief
Chairman of the Board and                   Executive Officer (since 1994),
Chief Executive Officer                     formerly President and Chief 
                                            Operating Officer (1993-1994),
                                            Executive Vice President (1990-
                                            1993) and Senior Vice President
                                            (1987-1990).  Director (since 
                                            1991).  Chairman of the Board
                                            and Chief Executive Officer and
                                            Director, Harbor Electric Energy 
                                            Company and Boston Energy 
                                            Technology Group; Chairman of the
                                            Board and Chief Executive Officer,
                                            TravElectric Services Corp. and 
                                            Ener-G-Vision, Inc.; Chairman of 
                                            the Board, REZ-TEK International 
                                            Corp. and Coneco Corp.


George W. Davis, 61                         President and Chief Operating
President and Chief                         Officer (since 1994), formerly
Operating Officer                           Executive Vice President (1992-
                                            1994), responsible for all
                                            power supply and delivery
                                            operations, Senior Vice President
                                            - Nuclear (1990-1992) and Vice 
                                            President - Nuclear Administration 
                                            (1989-1990).  Director (since 
                                            1991).  President and Director, 
                                            Harbor Electric Energy Company and
                                            Boston Energy Technology Group; 
                                            Director, TravElectric Services 
                                            Corp. and Ener-G-Vision, Inc.








                                       12





 14



                                            Business Experience
Name, Age and Position                      During Past Five Years
----------------------                      ----------------------
                                         
E. Thomas Boulette, 52                      Senior Vice President - Nuclear 
Senior Vice President - Nuclear             (since 1993), Vice President - 
                                            Nuclear Operations and Station 
                                            Director (1992-1993) and Vice 
                                            President - Operations (1989-
                                            1992) of Maine Yankee Atomic 
                                            Power Company.


Cameron H. Daley, 49                        Senior Vice President - Power
Senior Vice President - Power Supply        Supply (since 1989).


L. Carl Gustin, 51                          Senior Vice President - Marketing 
Senior Vice President - Marketing &         & Corporate Relations (since  
Corporate Relations                         1989).


John J. Higgins, Jr., 62                    Senior Vice President - Human 
Senior Vice President - Human Resources     Resources (since 1990) and Vice 
                                            President - Human Resources (1988-
                                            1990).


Ronald A. Ledgett, 56                       Senior Vice President - Power
Senior Vice President - Power Delivery      Delivery (since 1991) and 
                                            Director, Special Projects
                                            (1989-1991).


Charles E. Peters, Jr., 43                  Senior Vice President - Finance 
Senior Vice President - Finance             (since 1991), formerly Chief 
                                            Financial Officer and Senior Vice
                                            President of Genrad, Inc. (1985-
                                            1991).  Senior Vice President, 
                                            Treasurer and Director, Harbor 
                                            Electric Energy Company and
                                            Boston Energy Technology
                                            Group; Director, TravElectric 
                                            Services Corp., Ener-G-Vision, 
                                            Inc., REZ-TEK International Corp.
                                            and Coneco Corp.


Marc S. Alpert, 50                          Vice President and Treasurer 
Vice President and Treasurer                (since 1988).  Assistant 
                                            Treasurer, Harbor Electric Energy 
                                            Company and Boston Energy 
                                            Technology Group.

                                       13
 15




                                            Business Experience
Name, Age and Position                      During Past Five Years
----------------------                      ----------------------
                                         
Robert J. Weafer, Jr., 48                   Vice President, Controller and 
Vice President, Controller and Chief        Chief Accounting Officer (since
Accounting Officer                          1991).  Controller (1988-1991) and
                                            Chief Accounting Officer (1983-
                                            1991).


Theodora S. Convisser, 47                   Clerk of the Corporation (since
Clerk of the Corporation                    1986).  Clerk of Harbor Electric 
                                            Energy Company, Boston Energy 
                                            Technology Group, TravElectric 
                                            Services Corp., Ener-G-Vision,
                                            Inc., REZ-TEK International 
                                            Corp. and Coneco Corp.


Douglas S. Horan, 45                        Vice President and General Counsel
Vice President and                          (since 1994), formerly Deputy
General Counsel                             General Counsel (1991-1994) and 
                                            Associate General Counsel (1986-
                                            1991).  General Counsel of Harbor 
                                            Electric Energy Company.



















                                       14









 16
                                   Part II
                                   -------

Item 5.  Market for the Registrant's Common Stock and Related Stockholder 
-------------------------------------------------------------------------
Matters
-------
(a) Market Information
----------------------
The Company's common stock is listed on the New York and Boston Stock 
Exchanges.  

Following are the reported high and low sales prices of the Company's common 
stock on the New York Stock Exchange as reported daily in the Wall Street 
Journal for each of the quarters in 1994 and 1993:

                               1994                                1993       
------------------------------------------------------------------------------
                         High        Low                     High        Low
------------------------------------------------------------------------------
                                                           
First quarter          $29 7/8     $26                     $30 1/2     $26 3/8
Second quarter          29 1/8      25 1/4                  30 7/8      27 7/8
Third quarter           27 5/8      22 3/4                  32 5/8      29 3/4
Fourth quarter          24 1/4      21 1/2                  32 1/4      27 7/8
==============================================================================

(b) Holders
-----------
As of December 31, 1994, the Company had 39,904 holders of record of its 
common stock (actual count of record holders).

(c) Dividends
-------------

Following are the dividends declared per share of common stock for each of the 
quarters in 1994 and 1993:  

                                              1994               1993
----------------------------------------------------------------------
                                                         
First quarter                               $0.440             $0.425
Second quarter                               0.440              0.425
Third quarter                                0.440              0.425
Fourth quarter                               0.455              0.440
======================================================================


(d) Other Information
---------------------

Ratio of earnings to fixed charges and ratio of earnings to fixed charges and 
preferred stock dividend requirements for the year ended December 31, 1994:

                                          
     Ratio of earnings to fixed charges       2.45
     Ratio of earnings to fixed charges and
     preferred stock dividend requirements    2.07
                                       15
 17
Item 6.  Selected Financial Data
--------------------------------




The following table summarizes five years of selected consolidated financial 
data of the Company (in thousands, except per share data).

                   1994         1993         1992         1991         1990
---------------------------------------------------------------------------
                                                  
Operating 
 revenues    $1,548,554   $1,482,253   $1,411,753   $1,354,501   $1,314,440

Net income      125,022      118,218      107,298       94,670       79,616(a)

Earnings per
 common share      2.41         2.28         2.10         1.96         1.60(a)

Total assets  3,616,610    3,477,288    3,294,234    3,119,285    3,012,589 

Long-term 
 debt         1,136,617    1,272,497    1,091,073    1,136,765    1,074,025 

Redeemable
 preferred/
 preference
 stock          219,000      221,000      221,000      221,333      221,333

Cash dividends
 declared per
 common share     1.775        1.715        1.655        1.595        1.535
============================================================================

(a)  Before cumulative effect of change in accounting principle ($15,824 or 
     $0.41 per common share).  



                                       16




















 18
Item 7. Management's Discussion and Analysis
--------------------------------------------

REGULATORY PROCEEDINGS

Retail settlement agreements

In 1992 our state regulators, the Massachusetts Department of Public
Utilities, approved a three-year settlement agreement effective November 1992. 
This agreement provided us with retail rate increases, allowed for the
recovery of demand side management (DSM) conservation program costs, specified
certain accounting adjustments and clarified the timing and recognition of
certain expenses.  The agreement also set a limit on our rate of return on
common equity of 11.75% for 1993 through 1995, excluding any penalties or
rewards from performance incentives.

The retail rate increases consisted of a new annual performance adjustment
charge effective November 1992 and two annual base rate increases of $29
million effective November 1993 and November 1994.  The performance adjustment
charge varies annually based upon the performance of our Pilgrim Nuclear Power
Station.  This charge is further described in our discussion of financial
condition.  

In addition to the retail rate increases, our results of operations were
affected by the recovery of DSM program costs, accounting adjustments and the
timing and recognition of certain expenses as further described in the
following Results of Operations section.

Our state regulators previously approved a three-year settlement agreement
effective November 1989.  That agreement also provided us with retail rate
increases and specified certain accounting adjustments.  The 1989 agreement
primarily affected our results of operations through 1992.

We do not currently plan to make a base rate filing upon the expiration of the
1992 settlement agreement, therefore we anticipate that base rates will remain
in effect at their current levels.

RESULTS OF OPERATIONS

1994 versus 1993

Earnings per common share were $2.41 in 1994 and $2.28 in 1993.  The increase
in earnings was primarily the result of the expiration of a long-term
purchased power contract in October 1993, a retail base rate increase
effective November 1993, a 2.0% increase in retail kWh sales and an award
relating to an eminent domain case.  These positive changes were partially
offset by higher operations and maintenance, depreciation and amortization and
income tax expenses.

                                       17 









 19
Operating revenues

Operating revenues increased 4.5% over 1993 as follows:  
                                            
(in thousands)                                        
------------------------------------------------------
Retail electric revenues                       $62,945
Demand side management revenues                  5,056
Wholesale and other revenues                    (2,919)
Short-term sales revenues                        1,219
------------------------------------------------------
  Increase in operating revenues               $66,301
======================================================


Retail electric revenues increased $63 million.  The November 1993 and 1994
base rate increases resulted in $28.6 million of the increased revenues and
approximately $6 million was due to the 2% increase in retail sales.  Fuel and
purchased power revenues increased $28.5 million primarily due to the recovery
of certain new purchased power expenses.  In accordance with the 1992
settlement agreement specific revenues related to the purchased power contract
that expired in October 1993 were not affected.

The decrease in wholesale and other revenues is primarily due to an estimated
provision for refunds to wholesale customers due to contract issues.

Operating expenses

Total fuel and purchased power expenses decreased $27 million.  Fuel expense
decreased partly due to lower fossil fuel prices and a 12% decrease in nuclear
output.  Purchased power expense reflects lower costs associated with the
long-term contract that expired in October 1993, partially offset by the costs
of new contracts.  The timing effect of fuel and purchased power cost
collection also contributed to the decrease in fuel and purchased power
expenses.  Fuel and purchased power expenses are substantially all recoverable
through fuel and purchased power revenues.

Other operations and maintenance expense increased 8.7% primarily due to
higher employee benefit expenses.  Pension expense increased $20 million due
to a higher contribution made to the pension plan for the year.  In accordance
with the 1992 settlement agreement, we record pension expense in the amount of
the contribution to the plan.

Depreciation and amortization expense increased primarily due to a higher
depreciable plant balance.  In 1994 we fully expensed the remaining deferred
costs of the cancelled Pilgrim 2 nuclear unit.  In accordance with the 1992
settlement agreement we did not expense any of these costs in 1993.

Amortization of deferred nuclear outage costs consists of amounts related to
the 1993 and 1991 refueling outages at Pilgrim Station.  In 1993 we deferred
approximately $14 million of refueling outage costs.  We began to amortize
these costs in June 1993 over five years as approved in the 1992 settlement
agreement.

The $2 million decrease in demand side management programs expense was due to
the timing of recovery of program costs.  DSM expense includes some program
costs recovered over twelve months and other program costs recovered over six
years.  The 1994 expense consists of $22 million of costs primarily related to
1994 expenditures and $13 million of costs capitalized in 1992 through 1994.

Municipal property and other taxes increased primarily as a result of higher
Boston property taxes due to a tax rate increase and capital additions.
                                       18
 20

Our effective annual income tax rate for 1994 was 31.4% vs. 23.4% for 1993. 
Both rates were reduced by adjustments to deferred income taxes of $10 million
in 1994 and $20 million in 1993 made in accordance with the 1992 settlement
agreement.  No further deferred income tax adjustments may be made and we
expect our effective tax rate to be close to the statutory rate in 1995.

Other income

In November 1994 a court ruling became effective providing us with an
additional $5.7 million gain on a 1989 eminent domain taking of our property.

Interest charges

Interest charges in total did not change significantly.  Interest charges on
long-term debt decreased due to the first mortgage bond and debenture
redemptions in 1994 and the significant first mortgage bond refinancing in
1993 at lower interest rates.  This decrease was partially offset by higher
amortization of redemption premiums.  Other interest charges increased due to
higher short-term interest rates partially offset by a lower average short-
term debt level.  Allowance for borrowed funds used during construction
(AFUDC), which represents the financing costs of construction, increased as a
result of a higher AFUDC rate related to higher short-term interest rates.

1993 versus 1992

Earnings per common share were $2.28 in 1993 and $2.10 in 1992.  The increase
in earnings was primarily the result of a retail rate increase effective
November 1992, the expiration of a long-term purchased power contract in
October 1993, no amortization of deferred cancelled nuclear unit costs and
lower interest expense.  These positive changes were partially offset by
higher operations and maintenance, income tax and property tax expenses.


Operating revenues

Operating revenues increased 5.0% over 1992 as follows:
(in thousands)                                        
------------------------------------------------------
                                           
Retail electric revenues                       $70,837
Demand side management revenues                 33,601
Wholesale and other revenues                    (2,794)
Short-term sales revenues                      (31,144)
------------------------------------------------------
  Increase in operating revenues               $70,500
======================================================


Retail electric revenues increased $71 million.  The November 1992 and 1993
rate increases resulted in $40.6 million of additional revenues in 1993.  Fuel
and purchased power revenues increased $29.5 million over 1992 primarily due
to the timing effect of fuel and purchased power cost collection and lower
revenues received from short-term power sales as discussed below.

We began recovery of certain demand side management program costs, lost base
revenues and incentives in August 1992.  Our 1993 revenues provided $45.9
million related to 1991, 1992 and 1993 DSM programs.  Our 1992 revenues of
$12.3 million related primarily to 1991 programs.

The decrease in wholesale and other revenues reflects an estimated provision
for refunds to customers of $8.6 million in 1993 as a result of orders from
our state regulators on our generating unit performance program.
                                        19
 21
Lower short-term power sales revenues were a result of changes in our
generation availability and the needs of short-term power purchasers. 
Revenues from short-term sales serve to reduce fuel and purchased power
billings to retail customers and therefore have no effect on earnings.  

Operating expenses

Total fuel and purchased power expenses decreased $12 million.  Fuel expense
decreased primarily due to a 21.5% decrease in fossil generation and an 8.5%
decrease in nuclear generation, resulting from planned plant overhauls and a
nuclear refueling outage.  Purchased power expense reflects both higher
interchange purchases, caused by the lower generation, and lower costs
associated with the long-term contract that expired in October 1993.  The
decreases in expense were partially offset by the timing effect of fuel and
purchased power cost collection.

Other operations and maintenance expense increased 7.1% primarily due to
increases in employee benefits and nuclear production expenses. 
Postretirement benefits expense increased by $7 million primarily as a result
of the adoption of a new accounting standard and pension expense increased by
$5 million; both are provided for in our 1992 settlement agreement and further
explained in Note E to the consolidated financial statements.  A refueling
outage at Pilgrim Station in 1993 resulted in higher nuclear production
expenses.  

Depreciation and amortization expense increased in 1993 primarily due to a
higher annual decommissioning charge for Pilgrim Station effective November
1992 provided by the 1992 settlement agreement.  The charge is based on a 1991
estimate of decommissioning costs as further discussed in Note D to the
consolidated financial statements.  In addition, the effect of lower
depreciation rates implemented in accordance with the settlement agreement was
offset by the effect of a higher depreciable plant balance.

In accordance with our 1992 settlement agreement we did not expense any of the
$19 million of remaining deferred costs associated with the cancelled Pilgrim
2 nuclear unit in 1993.

Amortization of deferred nuclear outage costs consists of amounts related to
the 1993 and 1991 refueling outages at Pilgrim Station as discussed in the
results of operations for 1994 versus 1993.

The increase in demand side management programs expense is consistent with the
increase in DSM revenues.  DSM expense includes some costs recovered over
twelve months and other costs recovered over six years.  We began to recover
previously deferred DSM expenses in August 1992.  In 1993 we expensed and
collected from customers approximately $30 million of deferred 1991, 1992 and
1993 program costs.  Over six years we are expensing and collecting from our
customers $11 million of costs capitalized in 1992 and $37 million of costs
capitalized in 1993.  The 1993 expense related to these capitalized costs was
$7 million.  

Municipal property and other taxes increased in 1993 due to the absence of tax
abatements.  In 1992 property taxes were reduced by $10.4 million of tax
abatements in accordance with our 1989 settlement agreement.  

Our effective annual income tax rate for 1993 was 23.4% vs. 8.7% for 1992. 
Both rates were significantly reduced by adjustments to deferred income taxes
of $20 million in 1993 and $23 million in 1992 made in accordance with the
1992 and 1989 settlement agreements.  The 1992 rate was also reduced due to
                                       20    
 22
tax benefits of approximately $7 million resulting from mandated payments made
in accordance with the 1989 agreement.  Our adoption of a new accounting
standard for income taxes in 1993 did not significantly affect earnings. 

Interest charges and preferred and preference dividends

Total interest charges decreased $4 million in 1993.  Interest on long-term
debt decreased primarily due to the refinancing of substantially all our first
mortgage bonds in 1993 at lower interest rates, partially offset by higher
amortization of redemption premiums.  Other interest charges decreased due to
a lower short-term debt level and lower short-term interest rates.  AFUDC
decreased as a result of a lower AFUDC rate related to lower short-term
interest rates.  

Preferred and preference dividends decreased 5.1% due to the replacement of a
preferred and a preference stock issue with less costly issues of preferred
stock.  

FINANCIAL CONDITION

Our 1992 settlement agreement is providing us with increased revenues from
retail customers over the three-year period ending October 1995. 
Additionally, a significant long-term purchased power contract expired in
October 1993 with no change in related revenues.  The settlement agreement
also limits the annual rate of return on equity during the three-year period
to 11.75%, excluding any penalties or rewards from performance incentives.  

Our ability to achieve or exceed the 11.75% rate of return on equity is
primarily dependent upon our ability to control costs and to earn performance
incentives from generation performance mechanisms.  The most significant
impact that incentives can have on our financial results is based on Pilgrim
Station's annual capacity factor.  An annual capacity factor between 60% and
68% would provide us with approximately $47 million of revenues in the
performance year ended October 1995.  For each percentage point increase in
capacity factor above 68%, annual revenues will increase by approximately
$690,000.  For each percentage point decrease in capacity factor below 60% (to
a minimum of 35%), annual revenues will decrease by approximately $790,000. 
Pilgrim's capacity factor for the performance year ending October 1995 is
currently expected to be approximately 69%, a decrease from the 72% capacity
factor achieved in the performance year ended October 1994, primarily due to
the refueling outage scheduled for 1995.  We earned approximately $47 million
in revenues related to Pilgrim's capacity factor in the performance year ended
October 31, 1994.

Pilgrim Station automatically shut down in August 1994 as a result of a non-
nuclear problem with its electrical generator.  The plant returned to service
three months later following the completion of necessary repairs as well as
maintenance work originally scheduled for an October 1994 mid-cycle outage. 
The power needs usually met by the station were met by our other generating
plants or purchased from other suppliers as necessary.  We do not believe that
the generator damage resulted from actions within our control, however, our
recovery of the incremental purchased power costs during the outage through
fuel and purchased power revenues is subject to review by our state regulators
under our generating unit performance program.

As discussed in Regulatory Proceedings, we do not plan to make a base rate
filing with our state regulators upon the expiration of the 1992 settlement
agreement, therefore we anticipate that our base rates will remain in effect
at their current levels.
                                       21
 23
LIQUIDITY

We meet our capital expenditure cash requirements primarily with internally
generated funds.  These funds provided for 98%, 76% and 88% of our plant and
nuclear fuel expenditures in 1994, 1993 and 1992, respectively.  Our current
estimate of plant expenditures for 1995 is $200 million.  These expenditures
will be used primarily to maintain and improve existing transmission,
distribution and generation facilities.  We do not expect plant expenditures
to vary significantly from the 1995 amount in the four years thereafter.  We
have long-term debt and preferred stock payment requirements of $102.6 million
in 1995, $103.6 million per year in 1996 through 1998 and $3.6 million in
1999.

External financings continue to be necessary to supplement our internally
generated funds, primarily through the issuance of short-term commercial paper
and bank borrowings.  We currently have authority from our federal regulators
to issue up to $350 million of short-term debt.  We have a $200 million
revolving credit agreement and arrangements with several banks to provide
additional short-term credit on a committed as well as on an uncommitted and
as available basis.  At December 31, 1994 we had $215 million of short-term
debt outstanding, none of which was incurred under the revolving credit
agreement. In 1994 our state regulators approved our financing plan to issue
up to $500 million of securities through 1996.  The proceeds will be used to
refinance short and long-term securities and for capital expenditures.  Refer
to Note H to the consolidated financial statements for specific information
relating to our recent financing activities.

OUTLOOK FOR THE FUTURE

Electricity sales

A significant portion of our electricity sales are made to commercial
customers rather than industrial customers.  As a result our sales have been
only moderately impacted by the unfavorable economic factors affecting the
manufacturing industry in Massachusetts, including defense cutbacks and
continued downsizing in the computer industry.  Increased sales to commercial
customers more than offset the decrease in sales to industrial customers as
economic factors provided growth in the commercial sector in 1994.  Total
retail sales increased 2% in 1994.

Implementation of DSM programs, which are designed to assist customers in
reducing electricity use, will result in lower growth in electricity sales. 
We receive approval from our state regulators for annual DSM spending levels
and recovery amounts.  Through 1994 we collected from customers certain DSM
program costs primarily in the year incurred and other DSM program costs over
a six-year period.  We are also provided with incentives and recovery of lost
revenues based on the actual reduction in customer electricity usage from
these programs and a return on the costs that we recover over six years. 
Beginning in 1995 all costs are expected to be collected primarily in the year
incurred.  We will continue to recover the DSM costs capitalized during 1992
through 1994 along with a return on investment on the unrecovered balance.

Competition

The electric utility business is in a period of transition from a traditional
rate-regulated environment based on cost recovery to an environment with both
competition and modified regulation.  The effects of competition to date have
been most evident in the wholesale electric market.  In response to increased
                                       22
 24
competition from other electric utilities and non-utility generators to sell
electricity for resale, we have secured long-term power supply agreements with
our five wholesale customers.  These agreements set our rates through the year
2002 and beyond.

We are also beginning to face some forms of competition in the retail electric
market.  This is happening as industrial and large commercial customers pursue
their options to generate their own electric power, as customers look to
obtain lower electricity prices and to substitute natural gas or oil for
electricity for heating or cooling purposes and as large facilities factor the
cost of electricity into their decisions to relocate into or out of a given
service territory.  In the future, the potential exists for electric utilities
and other energy suppliers to sell electricity to retail customers of other
electric utilities without regard for existing service territories.  In
addition, our state regulators are currently investigating two issues related
to the onset of competition, incentive regulation and industry restructuring.

We are responding to the current and anticipated retail competitive challenges
in several ways.  We do not plan on seeking any additional base rate increases
until at least the year 2000 and are working to accomplish this by controlling
costs and increasing operating efficiencies without sacrificing quality of
service or profitability.  During 1994 we reduced our workforce by 8.4%, we
negotiated six-year contracts with our two union locals which resulted in
cost-saving changes and limits wage growth and we implemented various other
cost control strategies.  We also developed customer alliances and provided
economic development rates to some customers.  In addition, we filed with our
state regulators for approval of lower rates for a small number of large
manufacturing customers on a limited basis.  These actions all signify our
commitment to be a competitively priced, reliable provider of energy.  We are
also actively participating in regulatory and legislative discussions and
proceedings concerning the future structure of the electric utility industry. 
We do not expect the economic development rates or the proposed lower
manufacturing customer rates to have a significant impact on our financial 
condition or results of operations.

As a regulated company, we are subject to certain accounting rules that are
not applicable to other businesses and industries.  These accounting rules
allow regulated companies, as appropriate, to record certain costs as
regulatory assets instead of expenses when they are incurred.  These
regulatory assets are expected to be recovered from customers through future
rates.  The effects of competition or changes in regulation could ultimately
cause us to no longer be able to follow these accounting rules, in which case
our regulatory assets would have to be fully expensed at that time.

Resource regulation

Our state regulators require utilities to purchase power from qualifying non-
utility generators at prices set through a bidding process.  In 1993 our state
regulators ordered us to purchase 132 megawatts of power from an independent
power producer, Altresco Lynn, LP, starting as early as 1995.  We oppose this
order since we do not believe we need any new power for several years.  We
asked the Massachusetts Supreme Judicial Court (SJC) to reverse the order and
in 1994 the SJC remanded the case to our state regulators for further
consideration.  Our regulators then issued an order requiring us to negotiate
a contract with Altresco Lynn.  We filed an appeal of this order with the SJC
in October 1994 and are currently awaiting a decision.  In addition, we
supported an appeal filed by other parties of a state regulatory body's
conditional approval of construction of Altresco Lynn's generating station
project.  In January 1995 the SJC reversed the regulator's approval on the
                                       23
 25
basis that there was no showing of need for the project in Massachusetts prior
to 2000.

We are also subject to our state regulators' integrated resource management
(IRM) process in which electric utilities forecast their future energy needs
and propose how they will meet those needs by balancing conservation programs
with all other supplies of energy.  We submitted an IRM filing in 1994 and
received a favorable ruling in January 1995.  Our regulators found that we do
not have a need for additional resources through 2001 and we are not required
to issue a competitive request for proposal for new generating capacity at
this time.  We are required to update our IRM filing in January 1996.

Non-utility business

In 1993 we created an unregulated subsidiary, Boston Energy Technology Group
(BETG), following approval from our state regulators.  We have authority to
invest up to $45 million in this wholly-owned subsidiary.  BETG engages in
demand side management activities and businesses involving electric
transportation and the related infrastructure through two wholly-owned
subsidiaries.  In 1994 BETG acquired a substantial majority interest in two
additional businesses.  REZ-TEK International Corp. produces systems that
treat cooling water used in commercial and industrial air conditioning systems
in an energy efficient and environmentally sound manner, and Coneco
Corporation provides engineering and project management services to energy and
water conservation project developers and contractors.  These acquisitions
were not material.

We do not currently have a substantial investment in BETG and do not
anticipate it significantly impacting our results of operations in the next
several years.

OTHER MATTERS

Environmental

We are subject to numerous federal, state and local standards with respect to
waste disposal, air and water quality and other environmental considerations. 
These standards can require that we modify our existing facilities or incur
increased operating costs.

We own or operate 48 properties where hazardous materials were released in the
past.  We are required to clean up these properties in accordance with a
timetable developed by the Massachusetts Department of Environmental
Protection (DEP) and are continuing to evaluate the costs associated with
their cleanup.  There are uncertainties associated with these costs due to the
complexities of cleanup technology, regulatory requirements and the particular
characteristics of the different sites.  We also continue to face possible
liability as a potentially responsible party in the cleanup of ten multi-party
hazardous waste sites in Massachusetts and other states where we are alleged
to have generated, transported or disposed of hazardous waste at the sites. 
At the majority of these sites we are one of many potentially responsible
parties and we currently expect to have only a small percentage of the
potential liability.  Through December 31, 1994, we have accrued approximately
$7 million related to our cleanup liabilities.  We are unable to fully
determine a range of reasonably possible cleanup costs in excess of the
accrued amount, although based on our assessments of the specific site
circumstances, we do not expect any such additional costs to have a material
impact on our financial condition.  However, additional provisions for cleanup
costs could have a material impact on our results of a reporting period.
                                       24
 26
Uncertainties continue to exist with respect to the disposal of both low-level
radioactive waste (LLW) and spent nuclear fuel resulting from the operation of
Pilgrim Station.  In July 1994 our access to off-site LLW disposal facilities
ended.  Until access is attained to other disposal facilities we are managing
LLW through on-site storage.  The United States Department of Energy (DOE) is
responsible for the ultimate disposal of spent nuclear fuel, however there are
uncertainties regarding the DOE's schedule of acceptance of spent fuel for
disposal.  Refer to Note D to the consolidated financial statements for
further discussion regarding LLW and spent nuclear fuel disposal.

Under a 1991 consent order with the DEP and other interested parties we made
certain improvements in the emission control systems at New Boston Station. 
These improvements included the replacement of four existing chimney stacks
with two taller stacks in order to improve the air quality in the vicinity of
the station, and the installation of low nitrogen oxides burners.  The capital
costs of these modifications along with other associated improvements, which
were substantially completed in 1994, were approximately $80 million.

New Boston Station has the ability to burn natural gas, oil or both. 
Beginning in April 1995, as part of the DEP consent order, we will be required
to operate the station fueled exclusively by natural gas, except in certain
emergency circumstances.  We have made arrangements for a firm supply of
natural gas to run the station at a minimum level.  We are developing a least-
cost plan for operation beyond this minimum level involving principally the
utilization of interruptible gas supplies or short-term capacity purchases.  

The 1990 Clean Air Act Amendments will require a significant reduction in
nationwide emissions of sulfur dioxide from fossil fuel-fired generating
units.  The reduction will be accomplished by restricting sulfur dioxide
emissions through a market-based system of allowances.  We currently have
allowances that are in excess of our needs and which may be marketable.  Any
gain from the sale of these may be subject to future regulatory treatment. 
Other provisions of the 1990 Clean Air Act Amendments involve limitations on
emissions of nitrogen oxides from existing generating units.  Combustion
system modifications made to New Boston and Mystic Stations, including the
installation of the low nitrogen oxides burners at New Boston, will allow the
units to meet the provisions of the 1995 standards.  Depending upon the
outcome of certain DEP air quality modeling studies currently in progress,
additional emission reductions may also be required by 1999.  The extent of
any additional reductions and the cost of any further modifications is
uncertain at this time.

In recent years there have been increasing public concerns regarding
electromagnetic fields (EMF) associated with electric transmission and
distribution facilities and appliances and wiring in buildings and homes. 
Such concerns have included the possibility of adverse health effects caused
by EMF as well as perceived effects on property values.  Some scientific
reviews conducted to date have suggested associations between EMF and
potential health effects, while other studies have not substantiated such
associations.  We support further research into the subject and are
participating in the funding of industry-sponsored studies.  We are aware that
public concern regarding EMF in some cases has resulted in litigation, in
opposition to existing or proposed facilities in proceedings before regulators
or in requests for legislation or regulatory standards concerning EMF levels. 
We have addressed issues relative to EMF in various legal and regulatory
proceedings and in discussions with customers and other concerned persons;
however, to date we have not been significantly affected by these 
developments.  We continue to closely monitor all aspects of the EMF issue.
                                       25
 27
Litigation

In 1991 we were named in a lawsuit alleging discriminatory employment 
practices under the Age Discrimination in Employment Act of 1967 concerning 46 
employees affected by our 1988 reduction in force.  Legal counsel continues to 
vigorously defend this case.  Based on the information presently available we 
do not expect that this litigation or certain other legal matters in which we 
are currently involved will have a material impact on our financial condition.
However, an unfavorable decision ordered against us could have a material 
impact on our results of a reporting period.


Executive Office Changes

In July 1994 our former President, Thomas May, became Chairman and Chief 
Executive Officer, former Executive Vice President George Davis became 
President and Chief Operating Officer and former Chairman and Chief Executive 
Officer Bernard Reznicek retired.  In January 1995 George Davis announced his 
anticipated retirement effective September 1995. 






                                       26



















 28

Item 8. Financial Statements and Supplementary Financial Information
--------------------------------------------------------------------
Consolidated Statements of Income

                                                   years ended December 31,
(in thousands, except earnings per share)      1994        1993        1992
---------------------------------------------------------------------------
                                                        
Operating revenues                       $1,548,554  $1,482,253  $1,411,753
---------------------------------------------------------------------------
Operating expenses:
     Fuel                                   156,951     170,799     200,774
     Purchased power                        356,874     370,049     352,030
     Other operations and maintenance       441,423     406,271     379,350
     Depreciation and amortization          149,122     137,722     129,045
     Amortization of deferred cost of
      cancelled nuclear unit                 19,791           0      24,381
     Amortization of deferred nuclear
      outage costs                            7,721       6,546       4,901
     Demand side management programs         35,438      37,504       8,221
     Taxes - property and other             100,132      93,102      80,426
     Income taxes                            54,279      34,941      11,725
---------------------------------------------------------------------------
      Total operating expenses            1,321,731   1,256,934   1,190,853
---------------------------------------------------------------------------
Operating income                            226,823     225,319     220,900
Other income (expense), net                   5,658         589      (2,074)
---------------------------------------------------------------------------
Operating and other income                  232,481     225,908     218,826
---------------------------------------------------------------------------
Interest charges:
     Long-term debt                         102,570     104,375     106,850
     Other                                   12,367       9,778      12,525
     Allowance for borrowed funds used
      during construction                    (7,478)     (6,463)     (7,847)
---------------------------------------------------------------------------
      Total interest charges                107,459     107,690     111,528
---------------------------------------------------------------------------
Net income                                  125,022     118,218     107,298
Preferred and preference dividends provided  15,765      15,705      16,550
---------------------------------------------------------------------------
Balance available for common stock       $  109,257  $  102,513  $   90,748
===========================================================================
Common shares outstanding (weighted average) 45,338      44,959      43,144

Earnings per share of common stock       $     2.41  $     2.28  $     2.10
===========================================================================



Consolidated Statements of Retained Earnings

                                                   years ended December 31,
(in thousands)                                 1994        1993        1992
---------------------------------------------------------------------------
                                                        
Balance at beginning of year             $  218,292  $  192,948  $  174,477
     Net income                             125,022     118,218     107,298
---------------------------------------------------------------------------
      Subtotal                              343,314     311,166     281,775
---------------------------------------------------------------------------
Cash dividends declared:
     Preferred stock                         15,765      15,705      14,923
     Preference stock                             0           0       1,953
     Common stock                            80,545      77,169      71,951
---------------------------------------------------------------------------
      Subtotal                               96,310      92,874      88,827
---------------------------------------------------------------------------
Balance at end of year                   $  247,004  $  218,292  $  192,948
===========================================================================

The accompanying notes are an integral part of the consolidated financial 
statements
                                       27   
 29

Consolidated Balance Sheets

                                                                  December 31,
(in thousands)                                     1994                   1993
-----------------------------------------------------------------------------
                                                        
Assets
Utility plant, at original cost:
  In service                      $4,074,810             $3,904,776
    Less: accumulated depreciation 1,344,452 $2,730,358   1,258,359 $2,646,417
------------------------------------------------------------------------------
  Nuclear fuel                       291,836                273,867
    Less: accumulated amortization   236,239     55,597     220,477     53,390
------------------------------------------------------------------------------
  Construction work in progress                 144,048                144,835
------------------------------------------------------------------------------
                                              2,930,003              2,844,642
Investments in electric companies,
 at equity                                       24,678                 24,292
Nuclear decommissioning trust                    82,831                 66,060
Current assets:
  Cash and cash equivalents            6,822                  8,768
  Accounts receivable                189,382                171,098
  Accrued unbilled revenues           32,240                 29,823
  Fuel, materials and supplies,
   at average cost                    71,560                 79,381
  Prepaid expenses and other          26,705    326,709       9,738    298,808
------------------------------------------------------------------------------
Deferred debits:
  Regulatory assets                  197,455                210,144
  Intangible asset-pension            22,849                      0
  Other                               32,085    252,389      33,342    243,486
------------------------------------------------------------------------------
   Total assets                              $3,616,610             $3,477,288
==============================================================================
Capitalization and Liabilities
Common stock equity                          $  915,747             $  876,479
Cumulative preferred stock:
  Non-mandatory redeemable series               123,000                123,000
  Mandatory redeemable series                    94,000                 96,000
Long-term debt                                1,136,617              1,272,497
Current liabilities: 
  Long-term debt/preferred
   stock due within one year        $102,250               $  2,000
  Notes payable                      214,786                204,151
  Accounts payable                   139,119                117,614
  Interest accrued                    24,464                 25,467
  Dividends payable                   23,533                 22,696
  Pension benefits                    31,908                 22,005
  Other                               76,615    612,675      32,477    426,410
------------------------------------------------------------------------------
Deferred credits:
  Power contracts                     40,277                 36,275
  Accumulated deferred income taxes  515,454                484,785
  Accumulated deferred investment
   tax credits                        67,048                 71,140
  Nuclear decommissioning reserve     92,404                 73,744
  Other                               19,388    734,571      16,958    682,902
------------------------------------------------------------------------------
Commitments and contingencies                         -                      -
------------------------------------------------------------------------------
   Total capitalization and liabilities      $3,616,610             $3,477,288
==============================================================================

The accompanying notes are an integral part of the consolidated financial 
statements 
                                       28
 30

Consolidated Statements of Cash Flows

                                                     years ended December 31,
(in thousands)                                       1994      1993      1992
-----------------------------------------------------------------------------
                                                            
Cash flows from operating activities:
  Net income                                     $125,022  $118,218  $107,298
  Adjustments to reconcile net income
   to net cash provided by operating activities:
    Depreciation                                  142,932   130,074   123,243
    Amortization of nuclear fuel                   18,810    21,816    25,473
    Amortization of deferred cost of cancelled
     nuclear unit, net                             19,067         0    22,340
    Amortization of deferred nuclear outage
     costs                                          7,721     6,546     4,901
    Other amortization                             13,967     9,433     2,132
    Deferred income taxes                          (4,184)   10,303    17,165
    Investment tax credits                         (4,092)   (4,073)   (4,273)
    Allowance for borrowed funds used during
     construction                                  (7,478)   (6,463)   (7,847)
  Net changes in:
    Accounts receivable and accrued
     unbilled revenues                            (20,701)   13,206   (18,188)
    Fuel, materials and supplies                    3,093     9,722    (2,330)
    Accounts payable                               21,505   (18,465)   35,759
    Rate and contract settlements                       0      (175)  (31,363)
    Other current assets and liabilities           36,908    25,209     3,575
    Other, net                                     15,561   (19,548)  (15,844)
-----------------------------------------------------------------------------
Net cash provided by operating activities         368,131   295,803   262,041
-----------------------------------------------------------------------------
Investing activities:
  Plant expenditures (excluding AFUDC)           (198,760) (246,763) (213,827)
  Nuclear fuel expenditures                       (21,934)   (6,491)  (17,198)
  Capitalized demand side management
   expenditures                                   (37,007)  (37,156)  (11,469)
  Sale of plant assets, net                        15,972         0         0
  Nuclear decommissioning trust investments       (16,771)  (15,189)   (7,210)
  Electric company investments                       (386)    1,106     1,836
-----------------------------------------------------------------------------
Net cash used by investing activities            (258,886) (304,493) (247,868)
-----------------------------------------------------------------------------
Financing activities:
Issuances:
  Common stock                                     10,634    10,855    70,412
  Preferred stock                                       0    40,000    40,000
  Long-term debt                                   15,000   815,000    60,000
Redemptions:
  Preferred and preference stock                   (2,000)  (40,000)  (40,333)
  Long-term debt retirements                      (50,000) (648,625) (123,600)
Net change in short-term debt                      10,635   (71,349)   65,200
Dividends paid                                    (95,460)  (92,370)  (86,184)
-----------------------------------------------------------------------------
Net cash provided (used) by financing activities (111,191)   13,511   (14,505)
-----------------------------------------------------------------------------
Net increase (decrease) in cash and cash
 equivalents                                       (1,946)    4,821      (332)
Cash and cash equivalents at the
 beginning of the year                              8,768     3,947     4,279
-----------------------------------------------------------------------------
Cash and cash equivalents at the end of the year $  6,822  $  8,768  $  3,947
=============================================================================
Cash paid during the year for:
  Interest, net of amounts capitalized           $108,462  $103,720  $113,076
  Income taxes                                   $ 46,074  $ 30,305  $ 10,095

The accompanying notes are an integral part of the consolidated financial 
statements.
                                       29
 31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A. SIGNIFICANT ACCOUNTING POLICIES

1.  Basis of Consolidation and Accounting

The consolidated financial statements include the activities of our wholly-
owned subsidiaries, Harbor Electric Energy Company and Boston Energy
Technology Group.  All significant intercompany transactions have been
eliminated.

We follow accounting policies prescribed by our federal and state regulators. 
We are also subject to the accounting and reporting requirements of the
Securities and Exchange Commission.  The financial statements comply with
generally accepted accounting principles.  Certain prior period amounts on the
financial statements were reclassified to conform with current presentation.

2.  Revenues

We record revenues for electricity used by our customers but not yet billed at 
the end of each accounting period.

3.  Forecasted Fuel and Purchased Power Rates

The rate charged to retail customers for fuel and purchased power allows for
fuel and some purchased power costs to be billed to customers using a
forecasted rate.  The difference between actual and estimated costs is
recorded as an adjustment to fuel and purchased power expenses and is included
in accounts receivable until subsequent rates are adjusted.  State regulators
have the right to reduce our subsequent fuel and purchased power rates if they
find that we have been unreasonable or imprudent in the operation of our
generating units or in purchasing fuel.

4.  Depreciation and Nuclear Fuel Amortization

Our physical property was depreciated on a straight-line basis in 1994, 1993
and 1992 at composite rates of 3.11%, 3.09% and 3.36% per year, respectively,
based on estimated useful lives of the various classes of property.  The cost
of decommissioning Pilgrim Station, our nuclear unit, is excluded from the
depreciation rates.  When property units are retired, their cost, net of
salvage value, is charged to accumulated depreciation.  

The cost of nuclear fuel is amortized based on the amount of energy Pilgrim 
Station produces.  Nuclear fuel expense also includes an amount for the
estimated costs of ultimately disposing of the spent nuclear fuel and for
assessments for the decontamination and decommissioning of United States
Department of Energy nuclear enrichment facilities.  These costs are recovered
from our customers through fuel rates.

5.  Amortization of Deferred Nuclear Outage Costs

We expense deferred nuclear outage costs over five years as approved in the 
1992 settlement agreement.  The deferred cost balances in 1994 and 1993 
consist of amounts related to the 1993 and 1991 refueling outages at Pilgrim 
Station.
                                       30
 32
6.  Amortization of Discounts, Premiums and Redemption Premiums on Debt

We expense discounts, premiums, redemption premiums and related costs 
associated with issuances or redemptions of long-term debt or the refinancing 
of existing debt over the life of the debt or the replacement debt subject to 
regulatory approval.

7.  Allowance for Funds Used During Construction (AFUDC)

AFUDC represents the estimated costs to finance plant expenditures.  In
accordance with regulatory accounting, AFUDC is included as a cost of utility
plant and a reduction of interest charges.  Although AFUDC is not a current
source of cash income, the costs are recovered from customers over the service
life of the related plant in the form of increased revenues collected as a
result of higher depreciation expense.  Our AFUDC rates in 1994, 1993 and 1992
were 4.45%, 3.62% and 4.48%, respectively, and represented only the cost of
short-term debt.

8.  Cash and Cash Equivalents

Cash and cash equivalents are comprised of highly liquid securities with
maturities of three months or less.  Outstanding checks are included in cash
and accounts payable until they are presented for payment.

9.  Allowance for Doubtful Accounts

Our accounts receivable are substantially all recoverable.  This recovery
occurs both from customer payments and from the portion of customer charges
that provides for the recovery of bad debt expense.  Accordingly, we do not
maintain a significant allowance for doubtful accounts balance.

10.  Regulatory Assets

Regulatory assets represent costs incurred which will be collected from
customers through future charges in accordance with agreements with our state
regulators.  These costs are to be expensed when the corresponding revenues
are received in order to appropriately match revenues and expenses.  A portion 
of these costs is currently being recovered from customers.  No return on
investment was earned on the regulatory assets.

Regulatory assets consisted of the following:

                                                      December 31,
                                           1994               1993
------------------------------------------------------------------
                                                    
Redemption premiums                     $52,859            $59,116
Income taxes, net                        44,745             26,916
Power contracts                          40,277             36,275
Pension and postretirement costs         22,761             24,416
Nuclear outage costs                     17,804             25,524
Cancelled nuclear unit                        0             19,067
Other                                    19,009             18,830
------------------------------------------------------------------
                                       $197,455           $210,144
==================================================================


NOTE B. RETAIL SETTLEMENT AGREEMENTS

In 1992 and 1989 our state regulators, the Massachusetts Department of Public 
Utilities, approved three-year settlement agreements relating to our rate case 
proceedings.  These agreements provided for retail rate increases, accounting 
adjustments and demand side management program expenditures; clarified the 
                                       31
 33
timing and recognition of certain expenses and set limits on our rate of 
return on common equity.  Refer to Management's Discussion and Analysis for 
further information related to these settlement agreements.

The settlement agreements did not affect our contract or wholesale power rates 
charged to other utilities, which are regulated by our federal regulators, the 
Federal Energy Regulatory Commission.

NOTE C. INCOME TAXES

In 1993 we prospectively adopted Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes (SFAS 109).  This required us to change
our methodology of accounting for income taxes from the deferred method to an
asset and liability approach.  The deferred method was based on the tax
effects of timing differences between income for financial reporting purposes
and taxable income.  The asset and liability approach requires the recognition
of deferred tax assets and liabilities for the future tax effects of temporary
differences between the carrying amounts and the tax basis of assets and
liabilities.  In accordance with SFAS 109 we recorded net regulatory assets of
$44.7 million and $26.9 million and corresponding net increases in accumulated
deferred income taxes as of December 31, 1994 and December 31, 1993,
respectively.  The regulatory assets represent the additional future revenues
to be collected from customers for deferred income taxes.

Accumulated deferred income taxes consisted of the following:

                                                                  December 31,
(in thousands)                                     1994                   1993
------------------------------------------------------------------------------
                                                                
Deferred tax liabilities:
  Plant-related                                 $511,572              $496,731
  Other                                          105,786                95,161
------------------------------------------------------------------------------
                                                 617,358               591,892
------------------------------------------------------------------------------
Deferred tax assets:
  Plant-related                                   13,216                 9,999
  Investment tax credits                          43,273                45,914
  Alternative minimum tax                          1,332                18,672
  Other                                           44,083                32,522
------------------------------------------------------------------------------
                                                 101,904               107,107
------------------------------------------------------------------------------
    Net accumulated deferred income taxes       $515,454              $484,785
==============================================================================

No valuation allowances for deferred tax assets are deemed necessary.

Components of income tax expense were as follows:

                                                      years ended December 31,
(in thousands)                                      1994       1993      1992
------------------------------------------------------------------------------
                                                             
Current income tax expense                       $62,839    $28,711   $  (385)
Deferred tax expense                              (4,468)    10,303    16,383
Investment tax credits                            (4,092)    (4,073)   (4,273)
------------------------------------------------------------------------------
  Income taxes charged to operations              54,279     34,941    11,725
------------------------------------------------------------------------------
Taxes on other income:
  Current                                          2,550      1,205    (2,348)
  Deferred                                           284          0       782
------------------------------------------------------------------------------
                                                   2,834      1,205    (1,566)
-----------------------------------------------------------------------------
     Total income tax expense                    $57,113    $36,146   $10,159
=============================================================================


                                       32
 34
The effective income tax rates reflected in the consolidated financial 
statements and the reasons for their differences from the statutory federal 
income tax rate were as follows:

                                                    1994       1993      1992
-----------------------------------------------------------------------------
                                                               
Statutory tax rate                                  35.0%      35.0%     34.0%
State income tax, net of federal income tax benefit  4.3        4.2       3.9
Investment tax credits                              (2.3)      (2.6)     (3.6)
Municipal property tax adjustment                      -       (0.6)     (1.6)
Adjustment of deferred taxes on cancelled 
 nuclear unit                                          -          -       2.7
Reversal of deferred taxes-settlement agreement     (5.5)     (13.0)    (19.6)
Federal tax benefit of mandated
 payments from settlement agreements                   -          -      (6.2)
Other                                               (0.1)       0.4      (0.9)
-----------------------------------------------------------------------------
  Effective tax rate                                31.4%      23.4%      8.7%
=============================================================================


NOTE D. NUCLEAR DECOMMISSIONING AND NUCLEAR WASTE DISPOSAL

1.  Nuclear Decommissioning

When Pilgrim Station's operating license expires in 2012 we will be required 
to decommission the plant.  We are expensing an estimate of the  
decommissioning costs over Pilgrim's expected service life.  The 1994 expense 
of approximately $15 million is included in depreciation expense on the 
consolidated income statement.  The estimate used to determine our annual 
expense is based on a 1991 study which documents a cost of approximately $328 
million to decommission the plant using the "green field" method, which 
provides for the plant site to be completely restored to its original state.  
The cost estimate, which involves many uncertainties, was incorporated in our 
1992 retail settlement agreement.  We receive recovery of the annual expense 
from charges to our retail customers and from other utility companies and 
municipalities who purchase a contracted amount of Pilgrim's electric 
generation.  The funds we collect from decommissioning charges are deposited 
in an external trust and are restricted so that they may only be used for 
decommissioning and related expenses.  The net earnings on the trust funds, 
which are also restricted, increase the nuclear decommissioning fund balance 
and nuclear decommissioning reserve, thus reducing the amount to be collected 
from customers.

The 1991 decommissioning study was partially updated for internal planning 
purposes to evaluate the potential impact of long-term spent fuel storage 
options resulting from delays in United States Department of Energy (DOE) 
spent fuel removal on the estimated decommissioning cost.  (See part 2 below 
for a discussion of spent fuel removal).  The partial update indicates an 
estimated decommissioning cost of approximately $400 million in 1991 dollars 
based upon a revised spent fuel removal schedule and utilization of dry spent 
fuel storage technology.  No further update is currently available, however we 
will continue to monitor DOE spent fuel removal schedules and developments in 
spent fuel storage technology along with their impact on the decommissioning 
estimate.

In 1994 the Financial Accounting Standards Board began to review the 
accounting for decommissioning.  If current industry accounting practices are 
changed our annual decommissioning expense could increase and trust fund 
earnings could be reported as investment income.  In addition, the total 
estimated liability for decommissioning costs may be recorded on the balance 
sheet, most likely fully offset by an addition to utility plant costs.  We do 
                                      33
 35
not expect that these potential changes would have a material effect on our 
results of operations.

2.  Spent Nuclear Fuel

In 1994 we received a license amendment from the Nuclear Regulatory Commission 
to modify our fuel storage facility at Pilgrim Station to provide sufficient 
room for spent nuclear fuel generated through the end of Pilgrim's operating 
license in 2012.  We have modified the facility to provide spent fuel storage 
capacity through approximately 2003, however any further modifications are 
subject to review by our state regulators.  In addition we are actively 
exploring the feasibility of other spent fuel storage facilities and 
technologies.

It is the ultimate responsibility of the DOE to permanently dispose of spent 
nuclear fuel as required by the Nuclear Waste Policy Act of 1982.  We 
currently pay a fee of $1.00 per net megawatthour sold from Pilgrim Station 
generation under a nuclear fuel disposal contract with the DOE.  The fee is 
collected from customers through fuel charges.  The DOE is currently 
conducting scientific studies evaluating a potential spent nuclear fuel 
repository site at Yucca Mountain, Nevada.  The potential site, however, has 
encountered substantial public and political opposition and the DOE has 
publicly stated that it may be unable to construct such a repository in a 
timely manner.  In June 1994 we and other interested parties filed petitions 
in the U.S. Court of Appeals for the D.C. Circuit seeking declaratory rulings 
that the DOE is obligated to begin taking spent nuclear fuel for disposal in 
1998.  The DOE has sought to dismiss those petitions and a court ruling is 
awaited.  It is unknown at this time whether and on what schedule the DOE will 
eventually construct a spent fuel repository and what the effect on us will be 
of any delays in such construction.

3.  Low-Level Radioactive Waste

Our access to low-level radioactive waste (LLW) disposal facilities located in 
Barnwell, South Carolina ended in July 1994.  Until access is attained to 
other disposal facilities we are managing LLW generated at Pilgrim Station 
through on-site storage.  Legislation has been enacted in Massachusetts 
establishing a regulatory process for managing the state's LLW including the 
possible siting, licensing and construction of a disposal facility within the 
state, or, alternatively, an agreement with one or more other states.  
However, it appears unlikely that either option will be available in the near 
future.  Pending the construction of a disposal facility within the state or 
the adoption by the state of some other LLW management procedure, we will 
continue to monitor the situation and investigate other available options.  

4.  Other Nuclear Units

We are an investor in and customer of two other domestic nuclear units.  Both 
of these units receive, through the rates charged to their customers, an 
amount to cover the estimated costs to dispose of their spent nuclear fuel and 
to decommission the units at the end of their useful lives.  
                                       34  
 36
NOTE E. PENSIONS, OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

1.  Pensions

We have a defined benefit funded retirement plan with certain contributory 
features that covers substantially all employees.  Benefits are based upon an 
employee's years of service and compensation during the last years of 
employment.  Our funding policy is to contribute an amount each year that is 
not less than the minimum required contribution under federal law or greater 
than the maximum tax deductible amount.  Plan assets are primarily equities, 
bonds, insurance contracts and real estate funds.

Net pension cost consisted of the following components:

                                                     years ended December 31,
(in thousands)                                   1994        1993        1992
-----------------------------------------------------------------------------
                                                            
Current service cost - benefits earned        $15,057    $ 11,734    $ 10,683
Interest cost on projected benefit
   obligation                                  33,961      33,181      32,287
Actual net loss/(return) on plan assets           214     (44,470)    (23,281)
Net amortization and deferral                 (32,169)      8,528     (13,549)
-----------------------------------------------------------------------------
  Net pension cost (a)                        $17,063    $  8,973    $  6,140
=============================================================================


(a)  In accordance with an agreement with our state regulators we deferred
     the difference in net pension costs and the annual funding amounts.  Net 
     deferred costs amounted to $6 million and $14 million at December 31, 
     1994 and 1993, respectively.  Net pension costs recorded as expense were 
     $25 million in 1994, $5 million in 1993 and $0 in 1992.


We used the following assumptions for calculating pension cost:

                                                 1994        1993        1992
-----------------------------------------------------------------------------
                                                               
Discount rate                                    7.00%       8.25%       8.25%
Expected long-term rate of return on assets     10.00%      10.00%      10.00%
Compensation increase rate                       4.50%       4.50%       4.50%
-----------------------------------------------------------------------------


The pension plan's funded status was as follows:

                                                                 December 31,
(in thousands)                                               1994        1993
-----------------------------------------------------------------------------
                                                               
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
 vested benefits of $305,632 and $384,150                $321,072    $400,895
=============================================================================

Plan assets at fair value                                $289,164    $394,233
Projected obligation for service rendered
 to date                                                 (387,910)   (509,661)
-----------------------------------------------------------------------------
Projected benefit obligation in excess of 
 plan assets                                              (98,746)   (115,428)
Unrecognized prior service cost                            13,328       8,139
Unrecognized net loss                                      67,361      75,352
Unrecognized net obligation                                 8,998       9,932
Minimum liability adjustment (b)                          (22,849)          0
-----------------------------------------------------------------------------
  Net pension liability                                  $(31,908)   $(22,005)
=============================================================================

(b)  Statement of Financial Accounting Standards No. 87, Employers' Accounting 
     for Pensions (SFAS 87), requires the recognition of an additional minimum 
     liability for the excess of accumulated benefits over the fair value of 
     plan assets and accrued pension costs.  In accordance with SFAS 87 we 
                                       35
 37
     recorded an additional minimum liability and corresponding intangible 
     asset of $23 million on our consolidated balance sheet at December 31, 
     1994.



We used the following assumptions for calculating the plan's year-end funded 
status:

                                                             1994        1993
------------------------------------------------------------------------------
                                                                   
Discount rate                                                8.25%       7.00%
Compensation increase rate                                   3.90%       4.50%
------------------------------------------------------------------------------

We also provide defined contribution 401(k) plans for substantially all our 
employees.  We match a percentage of employees' voluntary contributions to the 
plans, which amounted to $8 million in 1994, $7 million in 1993 and $5 million 
in 1992.

2.  Other Postretirement Benefits

In addition to pension benefits, we also currently provide health care and 
other benefits to our retired employees who meet certain age and years of 
service eligibility requirements.  In 1993 we adopted Statement of Financial 
Accounting Standards No. 106, Employers' Accounting for Postretirement 
Benefits Other Than Pensions (SFAS 106).  This requires us to record a 
liability during the working years of employees for the expected costs of 
providing their postretirement benefits other than pensions (PBOPs).  Prior to 
1993 our policy was to record the cost of PBOPs when paid.  Our transition 
obligation upon adopting this standard was approximately $183 million, which 
we elected to recognize over 20 years as permitted by SFAS 106.

Our 1992 settlement agreement provides us with a phase-in of a portion of the 
higher PBOP costs incurred under SFAS 106 and allows us to defer the 
additional costs in excess of the phase-in amounts to the extent that we fund 
an external trust.  Our funding policy is to contribute 100% of postretirement 
benefit costs to external trusts.  Accordingly, we recorded expenses of $17 
million in 1994 and $15 million in 1993, reflecting the amount of current cost 
recovery from customers, and deferred the net costs in excess of amounts 
expensed for future recovery.  Net deferred costs amounted to $16 million and 
$10 million at December 31, 1994 and 1993, respectively.

Net postretirement benefits cost consisted of the following components:

                                                     years ended December 31,
(in thousands)                                               1994        1993
-----------------------------------------------------------------------------
                                                                
Current service cost - benefits earned                    $ 4,978     $ 4,351
Interest cost on accumulated benefit obligation            13,632      14,286
Actual return on plan assets                                 (187)          0
Amortization of transition obligation                       9,151       9,151
Net amortization and deferral                              (2,581)          0
-----------------------------------------------------------------------------
  Net postretirement benefits cost                        $24,993     $27,788
-----------------------------------------------------------------------------

                                       36               

 38

We used the following assumptions for calculating postretirement benefits 
cost:

                                                             1994        1993
-----------------------------------------------------------------------------
                                                                    
Discount rate                                                 7.0%        8.0%
Expected long-term rate of return on assets                   9.0%        9.0%
Health care cost trend rate                                   9.0%       12.5%
------------------------------------------------------------------------------

The health care cost trend rate is assumed to decrease by one percent each 
year beginning in 1995 to 5% in 1998 and years thereafter.  Changes in the 
health care cost trend rate will affect our cost and obligation amounts.  A 
one percent increase in the assumed health care cost trend rate would increase 
the total service and interest cost components by 20% and would increase the 
accumulated benefit obligation at December 31, 1994 by 18%.

The postretirement benefits program's funded status was as follows:  

                                                                 December 31,
(in thousands)                                        1994               1993
-----------------------------------------------------------------------------
                                                        
Trust assets at fair value                       $  33,300          $  18,016
Accumulated obligation for service
 rendered to date from:
  Retirees                               $(93,960)         $(75,216)
  Active employees eligible to retire     (31,159)          (64,880)
  Active employees not eligible to retire (51,545)(176,664) (73,285) (213,381)
-----------------------------------------------------------------------------
Accumulated benefit obligation in excess
 of trust assets                                  (143,364)          (195,365)
Unrecognized prior service cost                    (19,502)                 0
Unrecognized net (gain)/loss                        (1,849)            21,497
Unrecognized transition obligation                 164,715            173,868
-----------------------------------------------------------------------------
  Net postretirement benefits liability          $       0          $       0
=============================================================================


The weighted average discount rates we used to measure the accumulated benefit 
obligation were 8.25% in 1994 and 7.0% in 1993.  The trust assets consist of 
equities, bonds and money market funds.

3.  Postemployment Benefits

In 1994 we adopted Statement of Financial Accounting Standards No. 112, 
Employers' Accounting for Postemployment Benefits (SFAS 112).  This required 
us to record a liability for the estimated costs of providing postemployment 
benefits.  Postemployment benefits provided to former or inactive employees, 
their beneficiaries and covered dependents consist primarily of disability-
related benefits, including workers' compensation.  We previously recognized 
the costs of these benefits primarily as claims were paid.  The adoption of 
SFAS 112 did not have a material effect on our results of operations.

Note F. Eminent Domain Taking

In November 1994 a Norfolk Superior Court ruling against the Massachusetts 
Metropolitan District Commission (MDC) became effective, providing us with an 
additional $5.7 million gain on an eminent domain land taking case.  We had 
filed suit against the MDC in 1992 related to the eminent domain taking of 
certain of our property in 1989.

Note G. Cancelled Nuclear Unit

In May 1982 we began to expense the cost of our cancelled Pilgrim 2 nuclear 
unit over approximately eleven and one-half years in accordance with an order 

                                       37     
 39
received from state regulators.  We did not expense any of these costs in 
1993.  The remaining balance of $19 million was fully expensed in 1994 as 
allowed by our state regulators in our 1992 settlement agreement.  

Note H.  Capital Stock and Indebtedness

Capital Stock

                                                                  December 31,
(dollars in thousands, except per share amounts)      1994      1993      1992
------------------------------------------------------------------------------
                                                             
Common stock equity:
Common stock, par value $1 per share,
 100,000,000 shares authorized; 45,535,477,
 45,129,227 and 44,763,055  shares issued and
 outstanding:                                     $ 45,535  $ 45,129  $ 44,763
Premium on common stock                            622,803   612,653   602,196
Retained earnings                                  247,004   218,292   192,948
Surplus invested in plant                              405       405       405
------------------------------------------------------------------------------
     Total common stock equity                    $915,747  $876,479  $840,312
==============================================================================


Cumulative preferred stock:
Par value $100 per share, 2,890,000 shares
 authorized; issued and outstanding:
     Non-mandatory redeemable series:

                 Current Shares    Redemption
     Series      Outstanding       Price/Share                                
------------------------------------------------------------------------------
                                                       
      4.25%       180,000           $103.625      $ 18,000  $ 18,000  $ 18,000
      4.78%       250,000           $102.800        25,000    25,000    25,000
      7.75%       400,000               -           40,000    40,000         0
      8.25%       400,000               -           40,000    40,000    40,000
      8.88%             0               -                0         0    40,000
------------------------------------------------------------------------------
       Total non-mandatory redeemable series      $123,000  $123,000  $123,000
==============================================================================


     Mandatory redeemable series:

                 Current Shares
     Series      Outstanding                                                  
------------------------------------------------------------------------------
                                                          
      7.27%       460,000                         $ 46,000  $ 48,000  $ 48,000
      8.00%       500,000                           50,000    50,000    50,000
------------------------------------------------------------------------------
     Total mandatory redeemable series              96,000    98,000    98,000
     Less:  due within one year                      2,000     2,000         0
------------------------------------------------------------------------------
       Total mandatory redeemable series, net     $ 94,000  $ 96,000  $ 98,000
==============================================================================



Dividends Declared per Share
                                                             
Common stock                                      $  1.775  $  1.715  $  1.655
Preferred stock:
       4.25% series                               $  4.250  $  4.253  $  4.250
       4.78% series                                  4.780     4.785     4.780
       7.27% series                                  7.270     7.270     7.270
       7.75% series                                  7.750     5.707         0
       8.00% series                                  8.000     8.000     8.000
       8.25% series                                  8.250     8.250     5.278
       8.88% series                                      0     2.220     8.880
Preference stock:
       $1.46 series                               $      0  $      0  $  0.365

                                       38  
 40

Indebtedness

                                                                  December 31,
(dollars in thousands)                                  1994              1993
------------------------------------------------------------------------------
                                                                 
Long-term debt:

First mortgage bonds:
      Series S, variable rate, due 2002           $        0        $   25,000
      Series U, 10.250%, due 2014                          0            15,000
------------------------------------------------------------------------------
  Total first mortgage bonds                               0            40,000
------------------------------------------------------------------------------

Sewage facility revenue bonds                         36,300            36,300
 Less: due within one year                               600                 0
 Less: funds held by trustee                           4,083             3,803
------------------------------------------------------------------------------
  Net long-term sewage facility revenue bonds         31,617            32,497
------------------------------------------------------------------------------

Debentures:
      8.875%, due 1995                               100,000           100,000
      5.125%, due 1996                               100,000           100,000
      5.700%, due 1997                               100,000           100,000
      5.950%, due 1998                               100,000           100,000
      6.800%, due 2000                                65,000            65,000
      6.050%, due 2000                               100,000           100,000
      6.800%, due 2003                               150,000           150,000
      9.875%, due 2020                               100,000           100,000
      9.375%, due 2021                               115,000           125,000
      8.250%, due 2022                                60,000            60,000
      7.800%, due 2023                               200,000           200,000
------------------------------------------------------------------------------
  Total debentures                                 1,190,000         1,200,000
  Less:  due within one year                         100,000                 0
------------------------------------------------------------------------------
  Net long-term debentures                         1,090,000         1,200,000
------------------------------------------------------------------------------
Massachusetts Industrial Finance Agency bonds:
      5.750%, due 2014                                15,000                 0
------------------------------------------------------------------------------
        Total long-term debt                      $1,136,617        $1,272,497
==============================================================================
Short-term debt:

Notes payable:
      Bank loans                                  $   80,786        $  106,501
      Commercial paper                               134,000            97,650
------------------------------------------------------------------------------
        Total notes payable                       $  214,786        $  204,151
==============================================================================


1.  Common Stock

Since December 31, 1991, we issued the following shares of common stock:

                                             Number        Total    Premium on
(in thousands)                            of Shares    Par Value  Common Stock
------------------------------------------------------------------------------
                                                             
Balance December 31, 1991                    42,047      $42,047      $536,567
     Dividend reinvestment plan                 416          416         9,658
     New issue (a)                            2,300        2,300        55,971
------------------------------------------------------------------------------
Balance December 31, 1992                    44,763       44,763       602,196
     Dividend reinvestment plan                 366          366        10,457
------------------------------------------------------------------------------
Balance December 31, 1993                    45,129       45,129       612,653
     Dividend reinvestment plan (b)             406          406        10,150
------------------------------------------------------------------------------
Balance December 31, 1994                    45,535      $45,535      $622,803
==============================================================================

                                       39
 41

(a)   We used the net proceeds of the 1992 common stock issuance to reduce 
      short-term debt.

(b)   At December 31, 1994, the remaining authorized common shares reserved 
      for future issuance under the Dividend Reinvestment and Common Stock 
      Purchase Plan were 2,408,920 shares.


2.  Cumulative Non-Mandatory Redeemable Preferred Stock

In May 1993 we issued 400,000 shares of 7.75% cumulative non-mandatory 
redeemable preferred stock at par.  The stock is redeemable at $100 per share 
plus accrued dividends beginning in May 1998.  These shares were sold in the 
form of 1.6 million depositary shares, each representing a one-fourth interest 
in a share of the preferred stock.  We used the proceeds of this issue to 
fully retire the 8.88% series cumulative non-mandatory redeemable preferred 
stock.  

3.  Cumulative Mandatory Redeemable Preferred Stock

The 460,000 shares of our 7.27% sinking fund series cumulative preferred stock 
are currently redeemable at our option at $103.88.  The redemption price 
declines annually each May to par value in May 2002.  The stock is subject to 
a mandatory sinking fund requirement of 20,000 shares each May at par plus 
accrued dividends.  We also have the non-cumulative option each May to redeem 
additional shares, not to exceed 20,000, through the sinking fund at $100 per 
share plus accrued dividends.

We are not able to redeem any part of our 500,000 shares of 8% series 
cumulative preferred stock prior to December 2001.  The entire series is 
subject to mandatory redemption in December 2001 at $100 per share, plus 
accrued dividends.

4.  Long-Term Debt

The aggregate principal amounts of our debentures and sewage facility revenue 
bonds (including sinking fund requirements) due are $100.6 million in 1995, 
$101.6 million per year in 1996 through 1998 and $1.6 million in 1999.

In February 1993 we issued $65 million of 6.80% debentures due in 2000.  We 
used the proceeds of this issue to reduce short-term debt.  These debentures 
are not redeemable prior to maturity.

In March 1993 we issued $650 million of debentures and used the proceeds to 
retire ten series of first mortgage bonds and reduce short-term debt.  The 
debentures were issued in five separate series with interest rates ranging 
from 5.125% to 7.8% and maturing between 1996 and 2023.  The 5 1/8% debentures 
due 1996, 5.70% due 1997, 5.95% due 1998 and 6.80% due 2003 are not redeemable 
prior to maturity.  The 7.80% debentures due 2023 are first redeemable in 
March 2003 at a redemption price of 103.73%.  The redemption price decreases 
annually each March to par value in March 2013.  There is no sinking fund 
requirement for any series of these debentures.

In August 1993 we issued $100 million of 6.05% debentures due in 2000.  We 
used the proceeds from this sale to reduce short-term debt.  These debentures 
are not redeemable prior to maturity and have no sinking fund requirements.

In March 1994 the Massachusetts Industrial Finance Agency, on our behalf, 
issued $15 million of 5.75% tax-exempt unsecured bonds due in 2014.  The bonds 
are redeemable beginning in February 2004 at a redemption price of 102%.  The 

                                       40
 42
redemption price decreases to 101% in February 2005 and to par in February 
2006.  The proceeds from this issuance together with sufficient other funds 
were used to fully redeem the Series U first mortgage bonds.

We redeemed at par the $25 million variable rate Series S first mortgage bonds 
in 1994.  These bonds paid interest at 9.2% for the period January 15, 1993 
through January 14, 1994.  The rate was adjusted to 8.2% beginning January 15, 
1994 based upon the ten-year constant maturity Treasury rate as published by 
the Federal Reserve Board.

As a result of the redemption of all outstanding first mortgage bonds, the 
Indenture of Trust and First Mortgage that had mortgaged substantially all our 
property since 1940 was terminated in November 1994.

Sewage facility revenue bonds were issued by Harbor Electric Energy Company 
(HEEC), a wholly-owned subsidiary.  The bonds are tax-exempt, subject to 
annual mandatory sinking fund redemption requirements and mature in the years 
1995-2015.  The weighted average interest rate of the bonds is 7.3%.  A 
portion of the proceeds from the bonds is in reserve with the trustee.  If 
HEEC should have insufficient funds to pay certain costs on a timely basis or 
be unable to meet certain net worth requirements, we would be required to make 
additional capital contributions or loans to the subsidiary up to a maximum of 
$7 million.

5.  Short-Term Debt

We have arrangements with certain banks to provide short-term credit on both a 
committed and an uncommitted and as available basis.  We currently have 
authority to issue up to $350 million of short-term debt.

We have a $200 million revolving credit agreement with a group of banks.  This 
agreement is intended to provide a standby source of short-term borrowings.  
Under the terms of this agreement we are required to maintain a common equity 
ratio of not less than 30% at all times.  Commitment fees must be paid on the 
unused portion of the total agreement amount.  

Information regarding our short-term borrowings, comprised of bank loans and 
commercial paper is as follows:

(in thousands of dollars)                            1994      1993      1992
-----------------------------------------------------------------------------
                                                            
Maximum short-term borrowings                    $268,100  $320,000  $314,998
Weighted average amount outstanding              $214,640  $220,149  $233,286
Weighted average interest rates, excluding
 commitment fees                                      4.5%      3.4%      4.1%
------------------------------------------------------------------------------


NOTE I.  FAIR VALUE OF SECURITIES

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

Nuclear decommissioning trust
The cost of $82.8 million approximates fair value based on quoted market 
prices of securities held.  

Cash and cash equivalents
The carrying amount of $6.8 million approximates fair value due to the 
short-term nature of these securities.  

                                       41   
 43
Mandatory redeemable cumulative preferred stock, sewage facility revenue bonds 
and unsecured debt

The fair values of these securities are based upon the quoted market prices of 
similar issues.  Carrying amounts and fair values as of December 31, 1994 are 
as follows:

                                                          Carrying        Fair
(in thousands)                                              Amount       Value
------------------------------------------------------------------------------
                                                                   
Mandatory redeemable cumulative preferred stock         $   96,000  $   93,780
Sewage facility revenue bonds                               36,300      37,037
Unsecured debt                                           1,205,000   1,111,317
------------------------------------------------------------------------------


NOTE J. NEW ACCOUNTING PRONOUNCEMENT

Statement of Financial Accounting Standards No. 115, Accounting for Certain 
Investments in Debt and Equity Securities, became effective in 1994.  This 
statement did not have a material effect on our consolidated financial 
statements.

NOTE K. COMMITMENTS AND CONTINGENCIES

1.  Capital Commitments

At December 31, 1994, we had estimated contractual obligations for plant and 
equipment of approximately $50 million.

2.  Lease Commitments

We have leases for certain facilities and equipment.  Our estimated minimum 
rental commitments under both noncancellable leases and transmission 
agreements for the years after 1994 are as follows:



(in thousands)                                        
------------------------------------------------------
                                          
1995                                          $ 26,540
1996                                            24,305
1997                                            21,396
1998                                            19,438
1999                                            17,794
Years thereafter                               127,646
------------------------------------------------------
     Total                                    $237,119
======================================================


We will capitalize a portion of these lease rentals as part of plant 
expenditures in the future.  Our total expense for both lease rentals and 
transmission agreements was $27 million in 1994 and $30 million in 1993 and 
1992, net of capitalized expenses of $4 million in 1994 and $5 million in 1993 
and 1992.

3.  Hydro-Quebec

We have an approximately 11% equity ownership interest in two companies which 
own and operate transmission facilities to import electricity from the 
Hydro-Quebec system in Canada, which is included in our consolidated financial 
statements.  As an equity participant we are required to guarantee, in 
addition to our own share, the total obligations of those participants who do 
not meet certain credit criteria and are compensated accordingly.  At December 
31, 1994, our portion of these guarantees was approximately $21 million.
                                           42
 44
4.  Yankee Atomic Electric Company 

We have a 9.5% stock investment of approximately $2.5 million in Yankee Atomic 
Electric Company (Yankee Atomic).  In 1992 the Board of Directors of Yankee 
Atomic decided to permanently discontinue power operation of the Yankee Atomic 
nuclear generating station and decommission the facility.  We relied on Yankee 
Atomic for less than one percent of our system capacity under a long-term 
purchased power contract.

In 1993 Yankee Atomic received approval from federal regulators to continue to 
collect its investment and decommissioning costs through July 2000, the period 
of the plant's operating license.  The estimate of our share of Yankee 
Atomic's investment and costs of decommissioning is approximately $39 million 
as of December 31, 1994.  This estimate is recorded on our consolidated 
balance sheet as a power contract liability and an offsetting regulatory asset 
as we continue to collect these costs from our customers in accordance with 
our 1992 settlement agreement.  

5.  Nuclear Insurance

The federal Price-Anderson Act currently provides approximately $8.9 billion 
of financial protection for public liability claims and legal costs arising 
from a single nuclear-related accident.  The first $200 million of nuclear 
liability is covered by commercial insurance.  Additional nuclear liability 
insurance up to approximately $8.3 billion is provided by a retrospective 
assessment of up to $75.5 million per incident levied on each of the 110 units 
licensed to operate in the United States, with a maximum assessment of $10 
million per reactor per accident in any year.  The additional nuclear 
liability insurance amount may change as existing units give up their 
licenses.  In addition to the nuclear liability retrospective assessments, if 
the sum of all public liability claims and legal costs arising from any 
nuclear accident exceeds the maximum amount of financial protection, each 
licensee can be assessed an additional five percent of the maximum 
retrospective assessment.

We have purchased insurance from Nuclear Electric Insurance Limited (NEIL) to 
cover some of the costs to purchase replacement power during a prolonged 
accidental outage at Pilgrim Station and the cost of repair, replacement, 
decontamination or decommissioning of our utility property resulting from 
covered incidents at Pilgrim Station.  Our maximum potential total assessment 
for losses which occur during current policy years is approximately $14.8 
million under both the replacement power and excess property damage, 
decontamination and decommissioning policies.  All companies insured with NEIL 
are subject to retroactive assessments if losses are in excess of the total 
funds available to NEIL.  While assessments may also be made for losses in 
certain prior policy years, we are not aware of any losses in those years 
which we believe are likely to result in an assessment.

6.  Litigation

In 1991 we were named in a lawsuit alleging discriminatory employment 
practices under the Age Discrimination in Employment Act of 1967 concerning 46 
employees affected by our 1988 reduction in force.  Legal counsel continues to 
vigorously defend this case.  Based on the information presently available we 
do not expect that this litigation or certain other legal matters in which we 
are currently involved will have a material impact on our financial condition.
However, an unfavorable decision ordered against us could have a material 
impact on our results of a reporting period.

                                       43
 45
7.  Hazardous Waste

We own or operate 48 properties where hazardous materials were released in the 
past.  We are required to clean up these properties in accordance with a 
timetable developed by the Massachusetts Department of Environmental 
Protection and are continuing to evaluate the costs associated with their 
cleanup.  There are uncertainties associated with these costs due to the 
complexities of cleanup technology, regulatory requirements and the particular 
characteristics of the different sites.  We also continue to face possible 
liability as a potentially responsible party in the cleanup of ten multi-party 
hazardous waste sites in Massachusetts and other states where we are alleged 
to have generated, transported or disposed of hazardous waste at the sites.  
At the majority of these sites we are one of many potentially responsible 
parties and we currently expect to have only a small percentage of the 
potential liability.  Through December 31, 1994, we have accrued approximately 
$7 million related to our cleanup liabilities.  We are unable to fully 
determine a range of reasonably possible cleanup costs in excess of the 
accrued amount, although based on our assessments of the specific site 
circumstances, we do not expect any such additional costs to have a material 
impact on our financial condition.  However, additional provisions for cleanup 
costs could have a material impact on our results of a reporting period.




                                           44
 46
Note L. Long-Term Power Contracts

1.  Long-Term Contracts for the Purchase of Electricity

We purchase electric power under several long-term contracts for which we pay 
a share of the generating unit's capital and fixed operating costs through the 
contract expiration date.  The total cost of these contracts is included in 
purchased power expense in our consolidated income statements.  Information 
relating to these contracts as of December 31, 1994 is as follows:


                                            proportionate share (in thousands)
                                            ----------------------------------
                             Units of       1994  1994 Interest           Debt
                  Contract   Capacity    Minimum     Portion of    Outstanding
                Expiration  Purchased(a)    Debt        Minimum  Through Cont.
Generating Unit       Date   %       MW  Service   Debt Service      Exp. Date
------------------------------------------------------------------------------
                                                     
Canal Unit 1         2001   25.0    140  $   796        $   321        $ 1,928
Mass. Bay Trans-
 portation
 Authority           2005  100.0     34      (b)            (b)            (b)
Connecticut Yankee
 Atomic              2007    9.5     55    2,607          1,695         14,678
Ocean State Power -
 Unit 1              2010   23.5   67.5    5,072          3,653         21,563
Ocean State Power -
 Unit 2              2011   23.5   67.5    4,266          3,223         18,316
Northeast Energy
 Associates           (c)     (c)   219      (c)            (c)            (c)
L'Energia            2013   73.0     64      (d)            (d)            (d)
MassPower (e)        2013   44.3    117   12,642          8,088         86,538
------------------------------------------------------------------------------
     Total                          764  $25,383        $16,980       $143,023
==============================================================================



(a)  The Northeast Energy Associates contract represents 6.4% of our total  
     system generation capability.  The remaining units listed above represent 
     15.9% in total.

(b)  We are required to pay the greater of $22.00 per kilowatt-year or 90% of 
     the New England Power Pool capability responsibility adjustment charge up 
     to $63.00 per kilowatt-year times the qualified capacity (currently rated 
     at 34MW) plus incremental operating, maintenance and fuel costs.  The 
     total charges for this contract in 1994 were approximately $2 million.

(c)  We purchase approximately 75.5% of the energy output of this unit under
     two contracts.  One contract represents 135MW and expires in the year 
     2015.  The other contract is for 84MW and expires in 2010.  We pay for 
     this energy based on a price per kWh actually received.  We do not pay a
     proportionate share of the unit's capital and fixed operating costs.  The 
     total charges for these contracts in 1994 were approximately $119 
     million.

(d)  We pay for this energy based on a price per kWh actually received.  The 
     total charges under this contract for 1994 were approximately $31 
     million.

                                       45
 47
 (e) The MassPower contract started in January 1994.  Payments are based on a 
     stipulated price per MW rating of the unit subject to the unit 
     maintaining a twelve month average availability of at least 90%.  
     Payments are adjusted proportionately if the twelve month average is 
     below 90%.  If the twelve month average is less than 10% no payment is 
     required.  Total charges for this contract in 1994 were approximately $47 
     million.




Our total fixed and variable costs for these contracts in 1994, 1993 and 1992 
were approximately $286 million, $225 million and $217 million, respectively.  
Our minimum fixed payments under these contracts for the years after 1994 are 
as follows:



(in thousands)                                        
------------------------------------------------------
                                         
1995                                        $  105,574
1996                                           108,187
1997                                           105,622
1998                                           109,837
1999                                           108,196
Years thereafter                             1,318,008
------------------------------------------------------
     Total                                  $1,855,424
======================================================
Total present value                         $  928,594
======================================================



2.  Long-Term Power Sales

In addition to our power sales to five wholesale customers, we sell a 
percentage of Pilgrim Station's output to other utilities under long-term 
contracts.  Information relating to these contracts is as follows:


                                      Contract
                                    Expiration          Units of Capacity Sold
                                                        ----------------------
Contract Customer                         Date           %                  MW
------------------------------------------------------------------------------
                                                                
Commonwealth Electric Company             2012          11.0              73.7
Montaup Electric Company                  2012          11.0              73.7
Various municipalities                    2000(a)        3.7              25.0
------------------------------------------------------------------------------
     Total                                              25.7             172.4
==============================================================================

(a)  Subject to certain adjustments.


Under these contracts, the utilities pay their proportional share of the costs 
of operating Pilgrim Station and associated transmission facilities.  These 
costs include operation and maintenance expenses, insurance, local taxes, 
depreciation, decommissioning and a return on capital.

                                       46 
 48

Selected Consolidated Quarterly Financial Data (Unaudited)
 (in thousands, except earnings per share)

                                                        Balance
                                                      Available       Earnings
                  Operating   Operating         Net  for Common    Per Average
                   Revenues      Income      Income       Stock   Common Share
------------------------------------------------------------------------------
1994
                                                          
First quarter      $377,449     $45,795     $19,812     $15,850          $0.35
Second quarter      368,655      50,395      23,982      20,031           0.44
Third quarter       449,094      96,599      70,182      66,256           1.46
Fourth quarter      353,356      34,034      11,046       7,120           0.16

1993

First quarter      $354,752     $41,722     $15,452     $11,377          $0.25
Second quarter      346,074      49,282      22,829      19,125           0.43
Third quarter       436,024      96,319      70,015      66,053           1.47
Fourth quarter      345,403      37,996       9,922       5,958           0.13



Item 9.  Changes in and Disagreements with Accountants on Accounting and 
-------------------------------------------------------------------------
Financial Disclosure
--------------------

Not applicable.

                                       47   












 49

                                   Part III
                                   --------

Item 10.  Directors and Executive Officers of the Registrant
------------------------------------------------------------
(a)   Identification of Directors
---------------------------------

See "Election of Directors - Information about Nominees and Incumbent 
Directors" on pages 1 through 4 of the definitive proxy statement dated March 
27, 1995, incorporated herein by reference.

(b)  Identification of Executive Officers
-----------------------------------------

The information required by this item is included at the end of Part I of this 
Form 10-K under the caption Executive Officers of the Registrant.

Information regarding delinquent filers pursuant to Item 405 of Regulation S-K 
is included under "Stock Ownership by Directors and Executive Officers" on 
pages 4 through 5 of the definitive proxy statement dated March 27, 1995, 
incorporated herein by reference.

(c)  Identification of Certain Significant Employees
----------------------------------------------------

Not applicable.  

(d)  Family Relationships
-------------------------

Not applicable.  

(e)  Business Experience
------------------------

For information relating to the business experience during the past five years 
and other directorships (of companies subject to certain SEC requirements) 
held by each person nominated to be a director, see "Election of Directors - 
Information about Nominees and Incumbent Directors" on pages 1 through 4 of 
the definitive proxy statement dated March 27, 1995, incorporated herein by 
reference.

For information relating to the business experience during the past five years 
of each person who is an executive officer, see Executive Officers of the 
Registrant in this Form 10-K.

(f)  Involvement in Certain Legal Proceedings
---------------------------------------------

Not applicable.  

(g)  Promoters and Control Persons
----------------------------------

Not applicable.  

Item 11.  Executive Compensation
--------------------------------

See "Director and Executive Compensation" on pages 5 through 11 of the 
definitive proxy statement dated March 27, 1995, incorporated herein by 
reference.

                                       48
 50

Item 12.  Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

(a)  Security Ownership of Certain Beneficial Owners
----------------------------------------------------

To the knowledge of management, no person owns beneficially more than five 
percent of the outstanding voting securities of the Company.

(b)  Security Ownership of Management
-------------------------------------

See "Stock Ownership by Directors and Executive Officers" on pages 4 through 5 
of the definitive proxy statement dated March 27, 1995, incorporated herein by 
reference.

(c)  Changes in Control
-----------------------

Not applicable.

Item 13.  Certain Relationships and Related Transactions
--------------------------------------------------------

Not applicable.

                                       49



























 51

                                    Part IV
                                    -------

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
-------------------------------------------------------------------------


(a) Exhibits and Consolidated Financial Statement Schedules             Page
-----------------------------------------------------------             ----
                                                                     
Consolidated Statements of Income for the three years ended
December 31, 1994, 1993 and 1992                                        27

Consolidated Statements of Retained Earnings for the three
years ended December 31, 1994, 1993 and 1992                            27

Consolidated Balance Sheets as of December 31, 1994 and 1993            28

Consolidated Statements of Cash Flows for the three years
ended December 31, 1994, 1993 and 1992                                  29

Notes to Consolidated Financial Statements                              30

Selected Consolidated Quarterly Financial Data (Unaudited)              47

Report of Independent Accountants                                       61


Financial statement schedules have been omitted as they are either not 
required or not applicable.

                                       50



























 52


                                                      Exhibit  SEC Docket
                                                      -------  ----------

Exhibit 3     Articles of Incorporation and By-Laws
---------     -------------------------------------
Incorporated herein by reference:
                                                      
      3.1     Restated Articles of Organization           3.1  1-2301
                                                               Form 10-Q
                                                               for the
                                                               quarter ended
                                                               June 30, 1994


      3.2     Boston Edison Company Bylaws                3.1  1-2301
              April 19, 1977, as amended                       Form 10-Q
              January 22, 1987, January 28, 1988,              for the
              May 24, 1988 and November 22, 1989               quarter ended
                                                               June 30, 1990


Exhibit 4     Instruments Defining the Rights of
---------     ----------------------------------
              Security Holders, Including Indentures
              --------------------------------------

Incorporated herein by reference:

      4.1     Medium-Term Notes Series A - Indenture      4.1  1-2301
              dated September 1, 1988, between                 Form 10-Q
              Boston Edison Company and Bank of                for the
              Montreal Trust Company                           quarter ended
                                                               September 30,
                                                               1988


      4.1.1   First Supplemental Indenture                4.1  1-2301
              dated June 1, 1990 to                            Form 8-K
              Indenture dated September 1, 1988                dated
              with Bank of Montreal Trust Company -            June 28, 1990
              9 7/8% debentures due June 1, 2020             

      4.1.2   Votes of the Pricing Committee of the       4.1  1-2301
              Board of Directors of Boston Edison              Form 10-Q
              Company taken December 11, 1990 re               for the 
              8 7/8% debentures due December 15, 1995          quarter ended
                                                               March 31, 1991

      4.1.3   Indenture of Trust and Agreement among   4.1.26  1-2301
              the City of Boston, Massachusetts                Form 10-K
              (acting by and through its Industrial            for the
              Development Financing Authority) and             year ended
              Harbor Electric Energy Company and               December 31,
              Shawmut Bank, N.A., as Trustee, dated            1991
              November 1, 1991

                                       51
 53


                                                      Exhibit  SEC Docket
                                                      -------  ----------
                                                      

      4.1.4   Votes of the Pricing Committee of the    4.1.27  1-2301
              Board of Directors of Boston Edison              Form 10-K
              Company taken August 5, 1991 re                  for the
              9 3/8% debentures due August 15, 2021            year ended
                                                               December 31,
                                                               1991


      4.1.5   Revolving Credit Agreement dated         4.1.24  1-2301
              February 12, 1993                                Form 10-K
                                                               for the
                                                               year ended
                                                               December 31, 
                                                               1992


      4.1.6   Votes of the Pricing Committee of the    4.1.25  1-2301
              Board of Directors of Boston Edison              Form 10-K
              Company taken September 10, 1992 re              for the 
              8 1/4% debentures due September 15, 2022         year ended
                                                               December 31,
                                                               1992


      4.1.7   Votes of the Pricing Committee of the    4.1.26  1-2301
              Board of Directors of Boston Edison              Form 10-K
              Company taken January 27, 1993 re                for the
              6.80% debentures due February 1, 2000            year ended
                                                               December 31, 
                                                               1992


      4.1.8   Votes of the Pricing Committee of the    4.1.27  1-2301
              Board of Directors of Boston Edison              Form 10-K
              Company taken March 5,1993 re                    for the
              5 1/8% debentures due March 15, 1996,            year ended
              5.70% debentures due March 15, 1997,             December 31,
              5.95% debentures due March 15, 1998,             1992
              6.80% debentures due March 15, 2003,
              7.80% debentures due March 15, 2023


      4.1.9   Votes of the Pricing Committee of the    4.1.28  1-2301
              Board of Directors of Boston Edison              Form 10-K
              Company taken August 18, 1993 re                 for the
              6.05% debentures due August 15, 2000             year ended
                                                               December 31,
                                                               1993

The Company agrees to furnish to the Securities and Exchange Commission, upon 
request, a copy of any agreements or instruments defining the rights of 
holders of any long-term debt whose authorization does not exceed 10% of the 
Company's total assets.

                                       52
 54




                                                      Exhibit  SEC Docket
                                                      -------  ----------

Exhibit 10    Material Contracts
----------    ------------------

Incorporated herein by reference:
                                                      
      10.1    Key Executive Benefit Plan                10.13  1-2301
              (1982 Form of Agreement)                         Form 10-K
                                                               for the
                                                               year ended
                                                               December 31, 
                                                               1992


    10.1.1    Amendment to Key Executive Benefit       10.4.1  1-2301
              Plan dated February 1, 1986                      Form 10-K
                                                               for the
                                                               year ended
                                                               December 31,
                                                               1985


    10.1.2    Key Executive Benefit Plan                 10.1  1-2301
              Standard Form of Agreement, May                  Form 10-Q
              1986                                             for the
                                                               quarter ended
                                                               June 30, 1986


    10.1.3    Key Executive Benefit Plan               10.3.1  1-2301
              Standard Form of Agreement, May                  Form 10-K
              1986, with modifications                         for the
                                                               year ended
                                                               December 31, 
                                                               1991


      10.2    Executive Annual Incentive                 10.5  1-2301
              Compensation Plan                                Form 10-K
                                                               for the
                                                               year ended
                                                               December 31,
                                                               1988


      10.3    1991 Director Stock Plan                   10.1  1-2301
                                                               Form 10-Q
                                                               for the 
                                                               quarter ended
                                                               March 31, 1991


                                       53
 55


                                                      Exhibit  SEC Docket
                                                      -------  ----------
                                                      
      10.4    Boston Edison Company Deferred            10.11  1-2301
              Fee Plan dated January 1, 1990                   Form 10-K
                                                               for the
                                                               year ended
                                                               December 31,
                                                               1992


      10.5    Deferred Compensation Trust               10.10  1-2301
              between Boston Edison Company                    Form 10-K
              and State Street Bank and                        for the
              Trust Company dated                              year ended
              February 2, 1993                                 December 31, 
                                                               1992


      10.6    Directors Retirement Benefit             10.8.1  1-2301
              (1993 Plan)                                      Form 10-K
                                                               for the
                                                               year ended
                                                               December 31,
                                                               1993


Filed herewith:

    10.5.1    Amendment No. 1 to Deferred
              Compensation Trust dated
              March 31, 1994                                         


      10.7    Description of Supplemental Fee            
              Arrangement for Certain Directors                      
                                                         


      10.8    Performance Share Plan, Amendment                      
              and Restatement dated 
              October 24, 1994                                       


      10.9    Boston Edison Company Deferred                      
              Compensation Plan, Amendment and
              Restatement dated January 31, 1995                     


     10.10    Employment Agreement applicable to
              Ronald A. Ledgett dated April 30, 1987                 


                                       54



 56



                                                      Exhibit  SEC Docket
                                                      -------  ----------

           
     10.11    Description of Compensation
              Arrangement with Bernard W.
              Reznicek dated June 23, 1994                           




Exhibit 12    Statement re Computation of Ratios
----------    ----------------------------------

Filed herewith:
           
      12.1    Computation of Ratio of Earnings
              to Fixed Charges for the Year
              Ended December 31, 1994


      12.2    Computation of Ratio of Earnings
              to Fixed Charges and Preferred Stock
              Dividend Requirements for the Year
              Ended December 31, 1994





Exhibit 18    Letter re Change in Accounting Principle
----------    ----------------------------------------
Incorporated herein by reference:
                                                      
      18.1    Letter of Independent Certified            18.1  1-2301
              Public Accountants                               Form 10-Q
                                                               for the
                                                               quarter ended
                                                               March 31, 1990


Exhibit 21    Subsidiaries of the Registrant
----------    ------------------------------
      21.1    Harbor Electric Energy Company             
              (incorporated in Massachusetts),
              a wholly-owned subsidiary of Boston
              Edison Company


      21.2    Boston Energy Technology Group, Inc.
              (incorporated in Massachusetts),
              a wholly-owned subsidiary of Boston
              Edison Company


      21.3    Ener-G-Vision, Inc. (incorporated
              in Massachusetts), a wholly-owned
              subsidiary of Boston Energy
              Technology Group, Inc.


      21.4    TravElectric Services Corporation
              (incorporated in Massachusetts),
              a wholly-owned subsidiary of Boston
              Energy Technology Group, Inc.

                                       55
 57



                                                      Exhibit  SEC Docket
                                                      -------  ----------
           
      21.5    REZ-TEK International Corporation
              (incorporated in Massachusetts),
              a majority-owned subsidiary of
              Boston Energy Technology Group, Inc.


      21.6    Coneco Corporation (incorporated
              in Massachusetts), a majority-owned
              subsidiary of Boston Energy
              Technology Group, Inc.





Exhibit 23    Consent of Independent Accountants
----------    ----------------------------------

Filed herewith:
           
      23.1    Consent of Independent Accountants
              to incorporate by reference their
              opinion included with this Form
              10-K in the Form S-3 Registration
              Statements filed by the Company on
              September 14, 1990 (File No.
              33-36824), February 3, 1993 (File
              No. 33-57840) and in the Form S-8
              Registration Statements filed by
              the Company on October 10, 1985
              (File No. 33-00810), July 28, 1986
              (File No. 33-7558), December 31,
              1990 (File No. 33-38434), June 5,
              1992 (33-48424 and 33-48425) and
              March 17, 1993 (33-59662 and
              33-59682).





Exhibit 27    Financial Data Schedule
----------    -----------------------

Filed herewith:
           
      27.1    Schedule UT






Exhibit 99    Additional Exhibits
----------    -------------------

Incorporated herein by reference:
                                                      
      99.1    DPU Settlement Agreement with              28.1  1-2301
              Boston Edison Company dated                      Form 8-K
              October 3, 1989                                  dated
                                                               October 3, 1989

                                       56
 58


                                                      Exhibit  SEC Docket
                                                      -------  ----------
                                                      
      99.2    Settlement Agreement between Boston        28.1  1-2301
              Edison Company and Commonwealth                  Form 8-K
              Electric Company, Montaup Electric               dated
              Company and the Municipal                        December 21,
              Light Department of the Town of                  1989
              Reading, Massachusetts, dated
              January 5, 1990


      99.3    Pilgrim Outage Case Settlement between     28.2  1-2301
              Boston Edison Company and Reading                Form 8-K
              Municipal Light Department regarding             dated
              Contract Demand Rate, dated December             December 21,
              21, 1989                                         1989


      99.4    Settlement Agreement Between Boston        28.2  1-2301
              Edison Company and City of Holyoke               Form 10-Q
              Gas and Electric Department et. al.,             for the
              dated April 26, 1990                             quarter ended
                                                               March 31, 1990


      99.5    Information required by SEC Form                 1-2301
              11-K for certain Company employee                Form 10-K/A
              benefit plans for the years ended                Amendment to
              December 31, 1993, 1992 and 1991                 Form 10-K for
                                                               the year ended
                                                               December 31,
                                                               1993 and Form 8
                                                               Amendments to 
                                                               Form 10-K for
                                                               the years ended
                                                               December 31,
                                                               1992 and 1991,
                                                               dated June 30,
                                                               1994, June 29,
                                                               1993 and
                                                               June 26, 1992,
                                                               respectively


      99.6    DPU Settlement Agreement with              28.2  1-2301
              Boston Edison Company, dated                     Form 10-Q
              October 23, 1992                                 for the
                                                               quarter ended
                                                               September 30,
                                                               1992

                                       57
 59
(b)  Reports on Form 8-K
------------------------

There were no Form 8-K's filed during the fourth quarter of 1994.




                                       58




































 60


                                  SIGNATURES
                                  ----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange 
Act of 1934, the registrant has duly caused this report to be signed on its 
behalf by the undersigned, thereunto duly authorized.

                                         BOSTON EDISON COMPANY



                                   By:  /s/ Charles E. Peters, Jr.          
                                        --------------------------
                                            Charles E. Peters, Jr.
                                            Senior Vice President - Finance
                                            (Principal Financial Officer)



                                   Date:  March 23, 1995

Pursuant to the requirements of the Securities Exchange Act of 1934 this 
report has been signed below by the following persons on behalf of the 
registrant and in the capacities indicated on the 23rd day of March 1995.

                                           
/s/ Thomas J. May                             Chairman of the Board and Chief
---------------------------                   Executive Officer
    Thomas J. May                             

/s/ George W. Davis                           President and Chief Operating 
---------------------------                   Officer and Director
    George W. Davis                         

/s/ Robert J. Weafer, Jr.                     Vice President, Controller and
---------------------------                   Chief Accounting Officer
    Robert J. Weafer, Jr.                    

/s/ William F. Connell                        Director
---------------------------
    William F. Connell

/s/ Gary L. Countryman                        Director
---------------------------
    Gary L. Countryman

---------------------------                   Director
    Thomas G. Dignan, Jr.

---------------------------                   Director
    Charles K. Gifford

/s/ Nelson S. Gifford                         Director
---------------------------
    Nelson S. Gifford


                                      59
 61
                                           
/s/ Kenneth I. Guscott                        Director
---------------------------
    Kenneth I. Guscott

/s/ Matina S. Horner                          Director
---------------------------
    Matina S. Horner

/s/ Sherry H. Penney                          Director
---------------------------
    Sherry H. Penney

/s/ Bernard W. Reznicek                       Director
---------------------------
    Bernard W. Reznicek

/s/ Herbert Roth, Jr.                         Director
---------------------------
    Herbert Roth, Jr.

---------------------------                   Director
    Stephen J. Sweeney

---------------------------                   Director
    Paul E. Tsongas




                                       60




























 62
                     Report of Independent Accountants


To the Stockholders and Directors of Boston Edison Company:


We have audited the consolidated financial statements of Boston Edison Company 
and subsidiaries (the Company) listed in Item 14(a) of this Form 10-K.  These 
consolidated 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, 1994 and 1993, and the consolidated results 
of its operations and its cash flows for each of the three years in the period 
ended December 31, 1994, in conformity with generally accepted accounting 
principles.



COOPERS & LYBRAND L.L.P.



Boston, Massachusetts
January 26, 1995


                                      61   

EX-10.5.1

                                                           Exhibit 10.5.1


                             BOSTON EDISON COMPANY

                          DEFERRED COMPENSATION TRUST

                               Amendment No. 1
                               ---------------

     The Boston Edison Company Deferred Compensation Trust (the "Trust") was
established pursuant to a trust agreement (the "Agreement") dated February 2,
1993 to serve as a so-called "rabbi trust" in connection with certain
deferred-compensation obligations of Boston Edison Company (the "Company").
Certain of the Company's deferred compensation plans associated with the 
Trust provide for the notional investment of deferred amounts in shares of
common stock of the Company ("Common Stock").  The Company has directed
State Street Bank and Trust Company, as trustee of the Trust (the "Trustee"),
to acquire shares of Common Stock in order more accurately to reflect the
unfunded deferred compensation obligation of the Company.  In connection with
the Trust's acquisition and holding of such securities, the Company wishes to
modify and clarify those provisions of the Agreement dealing with the voting
of shares held in the Trust.  Accordingly, pursuant to Section 9.1 of the
Agreement, the Company amends the agreement as follows, effective January 1,
1994:


     1.  The penultimate sentence of Section 4.2 of the Agreement (begins:  
"All rights associated with assets of the Trust . . .") is deleted and 
replaced with the following text:

     "All rights associated with assets of the Trust shall be exercised by the
     Trustee or the person designated by the Trustee, or by the Company or an 
     Investment Manager as herein provided.  Except as hereinafter provided, 
     such rights shall not be exercisable by or rest with Plan participants. 
     In its discretion and subject to such limitations as it may determine, 
     the Company may direct that securities of the Company held in Trust be 
     voted in proportion to the instructions of those Plan participants whom 
     the Company may from time to time specify.  Any such directions by Plan 
     participants shall be in a form acceptable to the Trustee and shall be 
     deemed instruction from the Company for all purposes of this Section 4.2.
     Nothing herein shall be deemed to give any Plan participant rights in or 
     to any specific assets of the Trust, nor any right to exercise voting 
     rights of the Company with respect to securities held in Trust except as 
     the Company may specify in accordance with the preceding provisions of 
     this Section 4.2."


     2.  Section 4.4 is amended by adding thereto the following text: 

     "If the Company so directs the Trustee with respect to securities of the 
     Company held in Trust, the Trustee shall also send such materials to 
     those Plan participants specified by the Company."

     IN WITNESS WHEREOF, Boston Edison Company has caused this instrument of 
amendment to be executed this 31st day of March, 1994.







                                               BOSTON EDISON COMPANY



                                          By:  /s/ Marc S. Alpert          
                                               ----------------------------
                                               Vice President and Treasurer

   State Street Bank and Trust
   Company, as trustee of the
   Trust, hereby consents to 
   the foregoing amendment as
   of the date above written.


    STATE STREET BANK AND TRUST COMPANY


By:  /s/ Judith A. Parker
     ----------------------------------

EX-10.7

  
                                                              Exhibit 10.7  
  
  
  
  
DESCRIPTION OF SUPPLEMENTAL FEE ARRANGEMENT FOR CERTAIN DIRECTORS  
-----------------------------------------------------------------  
  
  
On March 22, 1984, the Board of Directors amended the retirement benefit  
provision for certain directors adopted on December 23, 1982 to provide as  
follows:  effective January 1, 1983, each director who dies while in office, 
resigns or retires from the Company's Board of Directors and has served as a 
member thereof for at least ten years, shall be entitled to an annual amount 
equal to the annual directors' retainer, to be paid quarterly, for a period of
five years from the date of death in office, resignation or retirement;
provided that in the event of a director's death while in office or prior to
the expiration of such five-year period, such payments shall be made to his or
her estate or to such other beneficiary as may have been designated by such
director by a written notice on file with the Clerk; provided further,
however, that this vote shall not apply to any director who, at the time of
the termination of such director's service with the Company as an officer or
employee thereof, will be eligible for any pension or other retirement benefit
from the Company.

EX-10.8

                                                           Exhibit 10.8

                           BOSTON EDISON COMPANY
                           ---------------------
                           PERFORMANCE SHARE PLAN
                           ----------------------


SECTION 1        AMENDMENT AND RESTATEMENT OF PLAN
                 ---------------------------------

     1.1  Amendment and Restatement of Plan.  Boston Edison Company herewith
amends and restates its Performance Share Plan, originally established
effective January 1, 1989 as the Executive Long-Term Incentive Compensation
Plan, and amended and restated effective January 1, 1991.  This amendment
and restatement is applicable to Plan Performance Periods commencing
January 1, 1994.  The terms and provisions of the Plan as in effect prior
to January 1, 1994 remain effective for Performance Periods commencing
prior to January 1, 1994.

     1.2  Purpose.  The purpose of the Plan is as follows:

          To enhance Participant's focus on business directions beyond the
          annual budget cycle and to promote the achievement of long-term,
          strategic Company objectives.

          To motivate Participants to take actions that will enhance long-
          term shareholder value and minimize costs to customers.

          To strengthen team spirit through a vehicle that offers financial
          reward opportunities to Participants over a multi-year period.





























SECTION 2       DEFINITIONS
                -----------

     2.1  Definitions.  Whenever used herein, the following terms shall have
the meanings set forth below, unless expressly otherwise provided.  When the
defined meaning is intended, the term is capitalized.

  (a)  The term "Award" means the allocation to a Participant at the
       beginning of a Performance Period of a Target Incentive Award that
       may be earned at the completion of the Performance Period.  The Award
       is expressed in terms of a dollar amount.

  (b)  The term "Base Salary" means a Participant's annual rate of pay in
       effect on the first day of the Performance Period or such other date
       specified by the Committee.

  (c)  The term "Beneficiary" means the person or persons entitled to receive
       the interest of a Participant under the Plan in the event of the
       Participant's death as provided in Section 6 hereof.

  (d)  The term "Board" means the Board of Directors of the Company,
       provided, however, that in the event of a Change in Control, the term
       "Board" shall mean the Board of Directors as constituted immediately
       prior to the Change in Control.

  (e)  The term "Change in Control of the Company" shall mean and be deemed
       to have occurred if any one of the following events should take place:

     (i)  the acquisition, other than from the Company, by any individual,
          entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
          of the Exchange Act) of beneficial ownership (within the meaning of
          Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
          combined voting power of the then outstanding voting securities of
          the Company entitled to vote generally in the election of
          directors, but excluding, for this purpose, any such acquisition
          by (i) the Company or any of its subsidiaries, (ii) any employee
          benefit plan (or related trust) of the Company or its subsidiaries,
          or (iii) any corporation with respect to which, following such
          acquisition, more than 50% of the combined voting power of the then
          outstanding voting securities of such corporation entitled to vote
          generally in the election of directors is then beneficially owned,
          directly or indirectly, by individuals and entities who were the
          beneficial owners of voting securities of the Company immediately
          prior to such acquisition in substantially the same proportion as 
          their ownership, immediately prior to such acquisition, of the 
          combined voting power of the then outstanding voting securities
          of the Company entitled to vote generally in the election of 
          directors; or












  (ii)    individuals who, as of May 2, 1991, constitute the Board of
          Directors of the Company (the "Incumbent Board") cease for any
          reason to constitute at least a majority of such Board; provided
          that any individual becoming a director subsequent to May 2, 1991,
          whose election, or nomination for election by the Company's
          stockholders, was approved by a vote of at least a majority of the
          directors then comprising the Incumbent Board shall be considered
          as though such individual were a member of the Incumbent Board; or

  (iii)   approval by the stockholders of the Company of a reorganization,
          merger or consolidation, in each case, with respect to which all
          or substantially all the individuals and entities who were the
          respective beneficial owners of the voting securities of the
          Company immediately prior to such reorganization, merger or 
          consolidation do not, following such reorganization, merger or
          consolidation, beneficially own, directly or indirectly, more
          than 50% of the combined voting power of the then outstanding
          voting securities entitled to vote generally in the election of
          directors of the corporation resulting from such reorganization,
          merger or consolidation.

  (f)  The term "Chief Executive Officer" means the Chief Executive Officer
       of the Company.

  (g)  The term "Committee" means the Executive Personnel Committee of the
       Board, provided, however, that in the event of a Change in Control,
       the term "Committee" shall mean the Executive Personnel Committee
       of the Board as constituted immediately prior to the Change in
       Control.

  (h)  The term "company" means Boston Edison Company and any successor
       thereto that adopts the Plan.

  (i)  The term "Disability" means total disability as defined in the long-
       term disability plan in effect for the Company.

  (j)  The term "Employee" means any person (including any officer) employed
       by the Company on a regular, active, full-time salaried basis who is
       in a position meeting the defined eligibility criteria for
       participation in the Plan.

  (k)  The term "Layoff" means the involuntary termination caused by the
       elimination of the Participant's position.

  (l)  The term "Participant" means an Employee of the Company who has been
       selected to participate in the Plan for a stipulated Performance Period
       by the Committee.

  (m)  The term "Payout" means the actual cash payment to the Plan Agent on
       behalf of the Participant at the end of a Performance Period based on
       the attainment of Performance Goals and the Performance Payout Formula.

  (n)  The term "Performance Payout Formula" means the specific relationship
       between the degree to which Performance Goals are attained over the
       term of the Performance Period and the Payout as a percent of the
       Target Incentive Award.  The Performance Payout Formula will vary by
       Performance Goal, as designated by the Committee at the beginning of
       each Performance Period.  However, in no event shall the Payout exceed
       150% of the original Target Incentive Award.

  (o)  The term "Performance Goals" means the specified long-term performance
       objectives that, if all are fully attained, shall result in a 100%
       payment of the Target Incentive Award in accordance with the
       Performance Payout Formula.  In general, Performance Goals shall
       reflect performance of the Company as a whole.  However, some
       participants (e.g., Nuclear executives) may be assigned goals specific
       to their particular business unit.

  (p)  The term "Performance Period" means a multi-year period of consecutive
       years beginning with the year in which a Target Incentive Award is
       granted.  The Committee will designate the duration of each Performance
       Period provided, however, that no Performance Period shall be less than
       two years nor more than five years in length.

  (q)  The term "Plan Agent" means the First National Bank of Boston or such
       other individual or entity as shall be selected by the Committee.

  (r)  The term "Retirement" means retirement as defined in the retirement
       plan in effect for the Company.

  (s)  The term "Stock" means the Common Stock of the Company.

  (t)  The term "Target Incentive Award" means the anticipated individual
       incentive Award to be paid to a Participant in the event Performance
       Goals are fully achieved.  Such Target Incentive Award shall be
       determined by the Committee and shall be expressed as a percentage of
       the Participant's Base Salary.

  (u)  The term "Weighting" means the assignment to different Performance
       Goals in a Performance Period of relative importance and influence on
       the Payout.  For example, one Performance Goal may be weighted at 40%
       and the other at 60%.  This will mean that 40% of the Payout will be
       determined by achievement of the first Performance Goal.

  2.2  Gender and Number.  Except when otherwise indicated by the context,
any masculine terminology used herein shall also include the feminine, and
the definition of any term in the singular may include the plural.

SECTION 3  ELIGIBILITY AND PARTICIPATION
           -----------------------------

  3.1  Eligibility and Participation.  Eligibility for participation in the
Plan shall be limited to those Employees grade 45 and above who, by the
nature and scope of their position, regularly and directly make, influence,
or implement policy decisions which significantly impact the overall long-
term results or success of the Company.  Specific criteria for participation
will be determined by the Committee prior to the beginning of each
Performance Period and nominations for participation in accordance with
such criteria will be reviewed by the Committee at the beginning of each 
Performance Period.  Employees approved for participation shall be
notified of their selection as soon as practical following approval.

  3.2  Termination of Employment.  No Payout shall be made for a Performance
Period for a Participant whose employment with the Company is terminated
during the Performance Period for reasons other than death, Layoff, 
Retirement, or Disability, unless his termination was due to a cause
approved by the Committee.  In the event of termination of employment for
reasons of death, Layoff, Retirement, or Disability, or an approved cause,
a prorated payment may be made on the basis of the Participant's actual
employment and achievement of Performance Goals during the Performance
Period, as determined by the Committee at its sole discretion.

  3.3  No Rights Conferred.  Selection for participation in the Plan in any
one Performance Period shall not confer on the Participant the right to 
participate in the Plan for any other Performance Period.  Furthermore, 
nothing in the Plan or in any Award under the Plan shall confer on any
Participant any right to continue in the employ of the Company or
affect the right of the Company to terminate a Participant's employment
at any time.

SECTION 4  AWARD GRANTS AND PAYOUT DETERMINATION
           -------------------------------------

  4.1  Award Grants.  The Committee in its sole discretion may grant Awards
to eligible Participants on an annual basis.  It is intended that Performance
Periods will overlap.  However, Awards do not necessarily have to be granted
on an annual basis.  Awards will be earned by Participants during the
Performance Period if and to the extent the Performance Goals are met.

  4.2  Establishment of Performance Goals, Weightings, and Performance Payout
Formulas.  In advance of each Performance Period, the Committee shall
establish the appropriate Performance Goals, Weightings, and
Performance Payout Formulas for purposes of the Plan.  Performance Goals,
Weightings, and Performance Payout Formulas may vary by Participant in
the Plan and Performance Period.  The degree to which Awards are earned
by achievement of one Performance Goal shall have no direct effect on
the determination of Awards earned by achievement of other Performance
Goals.  To establish the Performance Goals, Weightings, and Performance
Payout Formulas for each Performance Period, the Committee will use any
information it considers relevant regarding the likely performance of
the Company.  The Performance Goals, Weightings, and Performance Payout
Formulas will be communicated to Participants as soon as practicable
following their determination by the Committee.  If during a Performance 
Period the Committee determines a change in the Company's business,
operations, corporate or capital structure, the manner in which it conducts
business or any other change to be extraordinary and material and determines
that, as a result of such change, the established Performance Goals,
Weightings, and Performance Payout Formulas are no longer appropriate, the
Committee may make modifications as it deems appropriate and equitable in the
Committee's sole and absolute discretion.

  4.3  Assignment of Target Incentive Awards.  For each Performance Period,
the Committee shall determine and assign the Target Incentive Award for each
Participant.  Such determination shall be based on the assessed impact the
Participant's position exerts on overall Company results.

  4.4  Determination of Payouts.  Payouts may vary above and below the Target
Incentive Awards as determined in Section 4.2 preceding, dependent 
upon the achievement of the established Performance Goals, in accordance with
the Weightings and Performance Payout Formulas prescribed by the Committee.
The Payouts on behalf of a non-officer or a Participant below the level of
Senior Vice President must be approved by the Committee.  Payment of the 
Payout on behalf of the Chief Executive Officer and any other Participant who
is a Senior Officer of the Company will be approved by the Board.  The
Committee's determination of the Payouts shall be final, binding, and
conclusive.





  4.5  Limitation on Amounts Available for Payouts.  The aggregate amount
available each Plan Year for Payouts shall be limited to 3% of annual
net income of the Company.  The Committee may, at its discretion, set
any limit on the aggregate dollar amount available for Payouts during
any Performance Period.  To the extent Payouts need to be limited in a
Performance Period, Awards will be reduced on a prorated basis.

SECTION 5  PAYOUT
           ------

  5.1  Payout.  A Participant's Payout shall be paid to the Plan Agent on
behalf the Participant no later than 90 days after publication of the
Company's audited financial statements reflecting the last fiscal year
of the Performance Period (the "Payout Date") and, subject to Sections
5.3 and 5.5, shall be applied by the Plan Agent to the purchase of
Stock in accordance with Section 7.3.

  5.2  Payment on Death, Layoff, Disability, and Retirement.  Prorated
payments that are made pursuant to Section 3.2 shall be paid to the
Plan Agent on behalf of the Participant, or in the event of death, on
behalf of the Participant's Beneficiary, as soon as practicable after
termination of employment.  The payments to be prorated shall be
restricted to those payable for the performance cycle ending with the
calendar year in which the employee terminates employment.  Prorated
payments, subject to Section 5.5, shall be applied by the Plan Agent
to the purchase of Stock in accordance with Section 7.3.

  5.3  Deferral of Payouts.  Notwithstanding any provisions of the Plan
to the contrary, Payouts may be deferred at the election of the 
Participant in accordance with the applicable provisions of the 
Company's Deferred Compensation Plan.  In the event of such election,
all aspects of Payouts shall be governed by the applicable provisions
of the Company's Deferred Compensation Plan.

  5.4  Payment Upon Change in Control.  In the event of a Change in Control
of the Company, each Award theretofore granted will be paid by the
Company in cash directly to the Participants in a prorated amount
based on performance to date as designated by the Committee in its
sole and absolute discretion.  Payments shall be made within 60 days
of the Change in Control of the Company.

  5.5  Maximum Number of Shares: Stockholder Approval.  The aggregate number
of shares of Stock purchased by the Plan Agent on behalf of
Participants who are officers (within the meaning of Section 16(b) of
the Securities Exchange Act of 1934, as amended) ("Officers") shall
not exceed 1,500,000.  In the event that prior to the first Payout
Date under the Plan the Plan has not been approved by the stockholders
of the Company, or the Plan Agent has purchased the maximum number of
shares of Stock available under the Plan, all Payouts for Participants
who are Officers shall be paid in the form of cash paid directly to
the Participant or Participant's Beneficiary.









SECTION 6  DESIGNATION OF BENEFICIARIES
           ----------------------------

     A Participant may designate a Beneficiary or Beneficiaries who in the
event of the Participant's death are to receive the Stock that otherwise
would have been delivered to the Participant.  All designations shall be
in writing and shall be effective only if and when delivered to the Committee
during the lifetime of the Participant.  A Participant may, from time to time
during his lifetime, change his Beneficiary or Beneficiaries by a written
instrument delivered to the Committee.  If a Participant designates a
Beneficiary without providing in the designation that the Beneficiary
must be living at the time of each Payout, the designation shall vest in the
Beneficiary all of the Payouts whether payable before or after the
Beneficiary's death, and any Payouts remaining upon the Beneficiary's 
death shall be made to the Beneficiary's estate.  In the event a 
Participant shall not designate a Beneficiary or Beneficiaries as 
aforesaid, or if for any reason such designation shall be ineffective, 
in whole or in part, the Stock that otherwise would have been delivered 
to such Participant shall be paid to the Participant's beneficiary as 
designated by the Participant in the Company's group life insurance 
program.  In the event the Participant's beneficiary as designated in
the Company's group life insurance program is ineffective, in whole or
in part, the Stock shall be delivered to the Participant's estate and in
such event the term "Beneficiary" shall include his estate.

SECTION 7  ADMINISTRATION
           --------------

  7.1  The Committee.  This Plan shall be administered by the Committee in
accordance with rules that it may establish from time to time that are 
not inconsistent with the provisions of the Plan.  The Committee shall
be responsible for the following:

     7.1.1  Selecting the Performance Period.

     7.1.2  Approving the Participants for each Performance Period.

     7.1.3  Approving appropriate Performance Goals, Weightings, and
            Performance Payout Formulas.  Making adjustments in
            extraordinary situations.

     7.1.4  Approving the Target Incentive Awards and Payouts.

     7.1.5  Ruling on the inclusion of any extraordinary profit and loss items
            for the purposes of accounting for payments.

  7.2    The Corporate Staff Departments.  Corporate staff departments shall
be responsible for providing support to the Committee in carrying out its
responsibilities.  These tasks include, but are not necessarily limited to,
the following:

     7.2.1  Maintain and updating plan documentation and administration 
            guides.

     7.2.2  Designing the necessary forms for ongoing plan administration.

     7.2.3  Maintaining a database of Participants, Awards, and Payouts for
            control purposes.

     7.2.4  Preparing periodic tax guidelines for circulation to Participants.

  7.3    The Plan Agent.  On each Award Date, or as soon thereafter as
possible, the Company shall provide the Plan Agent with cash in an
amount equal to the Payouts for each Participant in the Plan net of
of any applicable withholding taxes.  The Plan Agent shall use such
funds to purchase on behalf of each Participant the maximum number
whole shares of Stock on the open market as promptly as possible. 
The Plan Agent shall submit all shares purchased pursuant to the
Plan to a transfer agent (the "Transfer Agent") for the Stock,
and arrange to have new certificates issued in the names of the 
Participants entitled thereto.  Any funds from Payouts on behalf
of a Participant remaining after the purchase of the maximum number
of whole shares of Stock which can be purchased with such Payout
shall be paid directly to the Participant.  All expenses of the Plan
Agent and the Transfer Agent, including brokerage and similar costs,
shall be paid by the Company.

SECTION 8  AMENDMENTS
           ----------

     The Board and the Committee, in its absolute discretion, without notice,
at any time and from time to time, may modify or amend, in whole or in part,
any or all of the provisions of this Plan, or suspend or terminate it
entirely, provided that no such modification, amendment, suspension, or
termination may without the consent of a Participant, or his Beneficiary
in the case of the death of the Participant, reduce the right of a
Participant, or his Beneficiary as the case may be, to a Payout or
distribution hereunder to which he is otherwise entitled in accordance
with the provisions contained in Section 5 of this Plan.

SECTION 9  APPLICABLE LAWS
           ---------------

     This Plan shall be construed, administered, and governed in all respects
under and by the laws of the Commonwealth of Massachusetts.

SECTION 10  MISCELLANEOUS
            -------------

  10.1  Nontransferability.  A Participant's rights and interest under the
Plan, including Payouts, may not be assigned, pledged, or transferred
except, in the event of a Participant's death, to his or her
designated Beneficiary as provided in the Plan, or in the absence of
such designation, by will or the laws of descent and distribution.

  10.2  Holding Period.  Shares of Stock purchased by the Plan Agent under
the Plan on behalf of Participants who are Officers may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed
of for a period of six months from the date of issuance of the
certificate thereof to such Participants.

  10.3  Relationship to Other Benefits.  No Payout or other payment under the
Plan shall be taken into account in determining any benefits under
any pension, retirement, group insurance, or other benefit plan of the
Company.

  10.4    Expenses.  All expenses of administering the Plan shall be borne by
the Company and shall not be charged to any Participant or to any
payments due any Participant.


                                        Boston Edison Company




                                   By:  /s/ Marc S. Alpert
                                        ---------------------------
                                        Vice President and Treasurer



Date:  October 24, 1994
       ----------------

EX-10.9

                                                           Exhibit 10.9

                            BOSTON EDISON COMPANY
                          DEFERRED COMPENSATION PLAN
                     (Restated Effective January 1, 1994)


1.  Purpose and Effective Date
    --------------------------

     The purpose of this Plan is to provide an arrangement whereby eligible
executives can elect to defer receipt of designated percentages or amounts
of their salary and incentive awards.  This Plan Document constitutes an
amendment, restatement and continuation of the form of deferred compensation
agreement originally approved, authorized, and adopted by the Board of
Directors at its November 27, 1985 meeting and amended at its November 26,
1986 meeting, its August 24, 1989 meeting, its October 26, 1989 meeting and
its September 13, 1993 meeting (agreements in such individual form being
hereinafter referred to as the "Prior Agreements").  This amended Plan is
effective January 1, 1994.

2.  Definitions
    -----------
(a)  "Plan" means the Boston Edison Company Deferred Compensation Plan as
set forth herein and as from time to time amended.

(b)  "Committee" means the Executive Personnel Committee of the Board of
Directors of the Company.

(c)  "Company" means Boston Edison Company.

(d)  "Participant" means an executive who participates in the Plan.

(e)  "Salary" means the fixed basic compensation of a Participant from
the Company excluding any special compensation such as overtime, bonus
payments, disability insurance benefits, severance pay or other
similar distributions, as well as Company contributions under any employee
benefit plan; provided, that Salary shall include amounts that would have
been received by the Participant from the Company as fixed basic
compensation but for an election under section 401(k) or section 125 of
the Code or a deferral election under this Plan.

(f)  "Base Salary" means the Participant's annualized Salary in effect on
January 1 of a year from which the Participant defers compensation.

(g)  "Salary Increase" means the amount, if any, by which a Participant's
Salary for any year may be increased over the Base Salary amount in effect
on January 1 of such year.

(h)  "Incentive Award" means, for any calendar year, such amount or amounts
as are payable to a Participant under any incentive award or bonus program 
provided by the Company, including without limitation Payouts under the
Boston Edison Company Performance Share Plan.

(i)  "Deferral Account" means the account described in section 6.

(j)  "Declared Rate" means (i) with respect to 1990, 1991 and 1992, 13%,
and (ii) with respect to 1993 and any subsequent calendar year, the Moody's
Average Corporate Bond Yield for the month of October preceding the calendar
year of reference, plus 2%, or such other rate as the Plan Administrator may
prescribe from time to time.

(k)  "Code" means the Internal Revenue Code of 1986 as amended from time to
time.

(l)  "Change of Control" has the meaning set forth in Appendix A.

(m)  "Plan Administrator" means the Committee or other person or persons
authorized to administer the Plan in accordance with Section 9.

(n)  "Disability" means a disability as defined for purposes of the Company's
long-term disability insurance plan.  For purposes of Section 7(a),
Disability shall be deemed to occur upon the expiration of thirty (30) months
from the commencement of the Participant's condition of disability.

(o)  "Retirement" means retirement (including early, normal, late or
disability retirement) under the Boston Edison Retirement Plan.

3.  Eligibility
    -----------
     Such employees of the Company as are selected by the Company shall be
eligible to participate in the Plan provided they complete such forms
as the Plan Administrator may require.

     Effective as of January 1, 1990, amounts deferred pursuant to a Prior
Agreement in respect of any person who is a Participant hereunder shall be
payable under this Plan and not separately under such Prior Agreement.  To
the extent a Prior Agreement would conflict with the terms and conditions
of this Plan (including in such terms and conditions any election by the
Participant in connection with enrollment in this Plan), the terms and
conditions of this Plan shall control.

4.  Elective Deferrals
    ------------------
     A Participant may elect to defer such portion of his or her Base Salary,
Salary Increase or Incentive Award otherwise payable in or for a calendar
year as the Plan Administrator may prescribe prior to the start of such
calendar year.  The Plan Administrator may limit the amount or percentage
of Base Salary, Salary Increase or Incentive Award that a Participant
may defer hereunder.

5.  Deferral Elections
    ------------------
     A Participant's election of deferral under Section 4 shall be in the form
prescribed by the Plan Administrator and shall be subject to such terms and
conditions as the Plan Administrator may prescribe.  The election of deferral
must be filed prior to the first day of the "Deferral Period" as hereinafter
defined.  Each election shall specify the percentage or amount of the
Participant's Base Salary, Salary Increase or Incentive Award to be credited
to his or her Deferral Account instead of being paid currently to the
Participant, and the payment period (including a single lump-sum payment
if so elected) for the distribution in respect of such deferral.  Each
election shall be binding with respect to the Base Salary, Salary Increase
and Incentive Award for such period (not less than one year) as the Plan
Administrator shall specify (the "Deferral Period") and shall be irrevocable
after January 1 of the calendar year to which it applies, or in the case of a
Deferral Period of more than one year, January 1 of the first calendar year to
which it applies.

Short-term disability payments shall be treated for purposes of deferral
hereunder as Base Salary; PROVIDED, that if within forty-five (45) days
following the commencement of such Disability the Participant so elects,
short-term disability payments in respect of the seventh month following
the commencement of the Participant's Disability, and subsequent months,
shall be paid currently and not deferred.  Long-term disability benefits
may not be deferred under this Plan.

6.  Deferral Account
    ----------------
The Plan Administrator shall maintain a Deferral Account on behalf of each
Participant as follows:

(a)  Opening Balance.  If the Participant has deferred compensation prior
to January 1, 1990 pursuant to one or more Prior Agreements, the Plan 
Administrator shall credit to the Deferral Account for the Participant the
amount credited to the Participant's account or accounts as of December 31,
1989 under such Prior Agreements.

(b)  Deferrals.  For each deferral election made by the Participant in
respect of periods on and after January 1, 1990, the Plan Administrator shall
credit to the Participant's Deferral Account the amounts of Base Salary, 
Salary Increase or Incentive Award, as applicable, which the Participant has
elected to defer, as of the dates the Salary, Salary Increase or Incentive 
Award would have been payable if not deferred.

(c)  Interest.  Subject to Section 15, at the end of each month the Plan
Administrator shall credit to each Participant's Deferral Account an amount
equal to the amount in such Deferral Account (exclusive of any shares of the
Common Stock of the Company credited to such Deferral Account in accordance
with paragraph (d) below) as of the end of the immediately preceding calendar
month (without regard to interest credited pursuant to this sentence for the
current calendar year) times one-twelfth of the Declared Rate.  Interest shall
continue to be credited pursuant to this paragraph until the commencement of
benefits.

(d)  Common Stock of the Company.  A Participant who elects to defer a Payout
under the Boston Edison Company Performance Share Plan shall have the value of
such deferred amount determined with reference to the number of whole shares
of Common Stock of the Company which could be purchased with said amount in
the open market as promptly as possible following the effective date of such
election.  Any dividends on such shares will be reinvested or deemed
reinvested in such shares.  Such number of shares (and the value thereof)
shall be credited from time to time to the Participant's Deferral Account. 
The Company may, but shall not be required to, purchase shares of Common Stock
to satisfy its obligation to Participants under this paragraph.  If such
purchase of shares of Common Stock of the Company is made, the Company may,
in its discretion and subject to such limitations as it may determine, permit
a Participant to exercise voting rights with respect to such shares as are 
allocated to his account. 

7.  Commencement of Distributions; Payment Periods
    ----------------------------------------------
(a)  Retirement or Disability.  Upon the Participant's Retirement or 
Disability, the Participant shall be entitled to receive the balance in his
or her Deferral Account.  The Deferral Account shall be payable as the 
Participant shall have specified in his or her election of deferral from 
among the lump sum and installment options prescribed by the Plan 
Administrator and, if payment is made other than in an immediate lump sum,
shall be adjusted to reflect continued interest credits (or the value of
Common Stock of the Company) in such manner as the Plan Administrator shall
prescribe.  Payment shall be made (or if paid other than in a lump sum, shall
commence) on the first day of the calendar quarter following Retirement or
Disability or as soon as practicable thereafter.  

(b)  Termination of Employment.  If the Participant's employment is terminated
for reasons other than death, Disability or Retirement, the balance in the
Participant's Deferral Account (determined as of the last day of the month
immediately preceding payment) shall be paid to the Participant in a lump sum 
on the first day of the calendar quarter following the date of termination or 
as soon as practicable thereafter.

(c)  Death.  If the Participant dies prior to the commencement of payment of
his or her Deferral Account as described in Section 7(a), the Participant's
designated beneficiary or beneficiaries shall be entitled to receive the 
balance in the Participant's Deferral Account as of the date of death.  
Payment shall be made on the first day of the second month following the month
in which the participant dies or as soon as practicable thereafter.  If the 
Participant dies after payment of his or her Deferral Account has commenced to
be paid in installments but prior to the exhaustion of such Account, payment 
of the remaining balance of such Account (adjusted as provided in Section
7(a)) shall continue to the Participant's designated beneficiary or 
beneficiaries over the installment period selected by the Participant.
Designation of a beneficiary or beneficiaries for purposes of the Plan shall
be made on a form prescribed or approved by the Plan Administrator.

(d)  Form of Distributions.  All distributions under the Plan shall be paid
in cash, except for amounts credited under Section 6(d) which shall be paid in
Common Stock of the Company.

8.  Emergency Benefit
    -----------------
If a Participant suffers a financial emergency, upon the written request of
the Participant, the Plan Administrator in its sole discretion may
distribute that portion of the Participant's Deferral Account, if any,
which it determines to be necessary to meet the immediate financial
emergency.  A financial emergency shall include major uninsured medical
expense, major uninsured casualty or property losses, and such other
financial emergencies as the Plan Administrator may, in its discretion,
determine, provided that the Participant demonstrates to the Plan 
Administrator's satisfaction that he or she lacks available resources to
meet the emergency.  Any such distribution shall reduce the balance in the
Participant's Deferral Account available for distribution in accordance
with Section 7.

9.  Administration of the Plan
    --------------------------
For purposes of prescribing the forms and conditions for deferral elections
under Section 5 (or other forms required to administer the Plan), and for 
purposes of Section 6, the functions of the Plan Administrator shall be
performed by the Chief Financial Officer of the Company or his or her
delegates.  For purposes of Section 8, the functions of the Plan
Administrator shall be carried out by a committee (acting by the vote or
consent of a majority of its members) consisting of the Vice President
of Human Resources, the Chief Financial Officer and the Treasurer of the
Company; PROVIDED, that any determination under Section 8 with respect to
any of those officer shall be made without his or her participation on such
committee.  All other administrative and interpretative functions under 
the Plan shall be vested in the Committee.  A decision by the Plan 
Administrator shall be final, conclusive and binding on all Participants
and any person claiming under or through any Participant.  The Plan 
Administrator shall exercise its functions hereunder in such manner as it
deems appropriate and may, in its discretion, waive the application of any 
rule to any Participant.  The Plan Administrator shall have no responsibility
to exercise its discretion in a uniform manner among similarly situated
Participants, and no decision with respect to any Participant shall give any
other Participant the right to have the same decision applied to him or her.

10.  Nature of Claim for Payments
     ----------------------------
Except as herein provided, the Company shall not be required to set aside
or segregate any assets of any kind to meet any of its obligations
hereunder, and all obligations of the Company hereunder shall be reflected
by book entries only.  The Participant shall have no rights on account of
this Plan in or to any specific assets of the Company.  Any rights that
the Participant may have on account of this Plan shall be those of a
general, unsecured creditor of the Company.  However, the Company may
establish a trust of which the Company is treated as the owner under
Subpart E of Subchapter J, Chapter 1 of the Code (a "grantor trust"),
and may from time to time deposit funds in such trust to facilitate payment
of the benefits provided under the Plan.  In the event the Company 
establishes such a grantor trust with respect to the Plan and at the 
time of a Change of Control, such trust (i) has not been terminated or
revoked and (ii) is not "fully funded" (as hereinafter defined), the
Company shall within ten days of such Change of Control deposit in such
grantor trust assets sufficient to cause the trust to be "fully funded"
as of the date of the deposit.  For purposes of this paragraph, the
grantor trust shall be deemed "fully funded" as of any date if, as of that
date, the fair market value of the assets held in trust with respect to
this Plan (such fair market value to include, in the case of any insurance
policy or contract held in the trust, only that amount which can be promptly
realized in cash through borrowing under the policy or contract) is not
less than the sum of the Deferral Account balances as of that date,
including without limitation the remaining balance in any Deferral Account
in pay status that has not been fully distributed.  If, prior to the Change
of Control, the Company has deposited in such grantor trust amounts estimated
to be sufficient to cause the trust to be "fully funded," the Company shall
be under no obligation following the Change of Control to deposit additional
amounts in trust.

In the event a grantor trust is established and, following a Change of
Control, the Company obtains an opinion of counsel acceptable to itself
and to the trustee of such trust that amounts held by the grantor trust
with respect to the Plan would by reason of the existence of such trust be
includible in the income of Participants prior to distribution, and as a 
result thereof the grantor trust is terminated, all Deferral Accounts, to
the extent of the assets then held in such trust, shall become payable in
the form of lump sum distributions.

11.  Rights are Non-Assignable
     -------------------------
Neither the Participant nor any beneficiary nor any other person shall have
any right to assign or otherwise alienate the right to receive payments 
hereunder, in whole or in part, which payments are expressly agreed to be
non-assignable and non- transferable, whether voluntarily or
involuntarily.





12.  Taxes
     -----
If the Company is required to withhold taxes from payments under the Plan,
the amounts payable to Participants shall be reduced by the tax so withheld.
To determine the amount of tax to withhold, in the case of payments in
shares of Common Stock of the Company, such shares will be valued at the
average of that day's high and low price on the day of distribution as 
reported in the Wall Street Journal.

13.  Termination; Amendments
     -----------------------
The Plan shall continue in effect until terminated by action of the
Company's Board of Directors.  Upon termination of the Plan, no deferral of
Salary, Salary Increase or Incentive Awards thereafter paid or payable to a 
Participant shall be made and no individual not a Participant as of the date
of termination shall become a Participant thereafter.  If, at the time of
termination, there is any Participant or beneficiary of a Participant who is
or will be entitled to a payment hereunder, the Plan Administrator shall elect
either (a) to make payments to such Participants or beneficiaries in the
normal course as if the Plan had continued in effect, or (b) to pay to such
Participants or beneficiaries the balance in the Participant's Deferral
Account in a single lump-sum payment.

The Committee may at any time and from time to time amend the Plan in any
manner; provided that, subject to Section 15, no such amendment shall reduce
the amounts previously credited to the Deferral Account of any Participant;
and provided further, that no amendment following a Change of Control shall
eliminate or reduce the Company's obligation to deposit assets in the grantor
trust as described in Section 10.

14.  Employment Rights
     -----------------
Nothing in this Plan shall give any Participant any right to be employed or
to continue employment by the Company.

15.  Change in or Interpretation of Law
     ----------------------------------
It is contemplated that in connection with its obligations under the Plan,
the Company may invest in one or more insurance contracts on the lives of
the Participants or may otherwise invest its assets in a manner calculated to
provide an after-tax yield sufficient to meet its obligations hereunder.  In
the event of any change in the federal income tax law or regulations which the
Plan Administrator, in its judgment, determines will increase the after-tax
cost of the Plan to the Company, or will reduce the after-tax yield from any
such contracts or other investments, it is herein expressly contemplated that
the Plan Administrator may, in its discretion, reduce prospectively the
Declared Rate to appropriately reflect the Company's increased cost.  Nothing
in this Section 15 shall be construed as limiting the power of the Committee 
to amend the Plan pursuant to Section 13, including any amendment that would 
lower the interest crediting rate under Section 6(c).

In the event of any change in or interpretation of law which, in the opinion
of counsel acceptable to the Plan Administrator, would cause the Plan to be
other than an unfunded plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees (such an unfunded plan being hereinafter referred to as an "exempt
plan") and to be subject to the funding requirements of Title I of the
Employee Retirement Income Security act, as amended ("ERISA"), the Plan

Administrator may terminate the participation of such Participants as may be 
necessary to preserve or restore the Plan's status as an exempt plan and may
accelerate payment of their Deferral Accounts or take such other action as may
be necessary to preserve or restore such status.   

                                        BOSTON EDISON COMPANY

                                   By:  /s/ Marc S. Alpert
                                        ----------------------------
                                        Vice President and Treasurer
Date:  1/13/95
       -------
       
                                 Appendix A
                                 -----------
                            "Change of Control"
                            -------------------


     For purposes of the Plan, a "Change of Control" shall mean and be deemed
to have occurred if any one of the following events should take place: 

     (i)  the acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of 
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of the combined voting power of the then 
outstanding voting securities of the Company entitled to vote generally in the
election of directors, but excluding, for this purpose, any such acquisition
by (i) the Company or any of its subsidiaries, (ii) any employee benefit plan
(or related trust) of the Company or its subsidiaries, or (iii) any 
corporation with respect to which, following such acquisition, more than 50% 
of the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by individuals and entities who
were the beneficial owners of voting securities of the Company immediately
prior to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the combined voting
power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors; or

     (ii) individuals who, as of May 2, 1991, constitute the Board of
Directors of the Company (the "Incumbent Board"), cease for any reason to
constitute at least a majority of such Board; provided that any individual
becoming a director subsequent to May 2, 1991, whose election, or nomination
for election by the Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent
Board; or

     (iii) approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which all or 
substantially all the individuals and entities who were the respective
beneficial owners of the voting securities of the Company immediately prior
to such reorganization, merger or consolidation do not, following such 
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then 
outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such reorganization, merger or
consolidation. 

EX-10.10

                                                           Exhibit 10.10



                                                      April 30, 1987




Mr. Ronald A. Ledgett
Rural Route #1
Box 7A
Crockett Neck Road
Kittery Point, Maine  03905


Dear Mr. Ledgett:


Boston Edison is pleased to extend an offer of employment to you as Assistant 
to the Senior Vice President - Nuclear commencing May 1, 1987, at a monthly 
salary of $8,333.34, which, when annualized, equals $100,000.08.  The position 
grade is established at grade 89.  In addition, the Executive Personnel 
Committee of the Board of Directors has voted you to membership in the Senior 
Management Incentive Compensation Plan at the non-officer level.  Please be 
advised, however, that on April 2, 1987, I suspended the Plan for the Plan 
Years 1987 and 1988.

The Company provides extensive benefits which are described in our benefits 
handbook, a copy of which is enclosed.  In addition, you will be provided with 
a Company car (with a telephone), four weeks of vacation and the option to 
defer both salary and any incentive award granted you by the Executive 
Personnel Committee in whatever portion you elect, as part of the deferred 
compensation plan.

Boston Edison maintains a qualified pension plan under which benefits are paid 
based upon a formula which takes into consideration the average of the best 
three of the last ten years of your final base pay and years of Boston Edison 
service (less a 50% primary Social Security offset).  In addition to benefits 
payable under the pension plan, Boston Edison will pay you additional monies 
equal to the difference, if any, between your pension plan benefit and the 
amount you would receive if the attached vesting schedule were used to 
calculate your pension plan benefit.  Any additional monies shall be paid on 
an unfunded basis from the Company's general funds.

If you purchase a residence in the Boston-Plymouth area on or before January 
1, 1988, the Company will provide a lump sum payment of $25,000 toward the 
purchase price.













Mr. Ronald A. Ledgett
April 30, 1987
Page 2


If within five years from your date of employment your services are no longer 
required at Pilgrim Nuclear Station due to the termination of plant operations 
or Boston Edison management thereof, we will provide, on an unfunded basis 
from the Company's general funds, severance pay equal to one year's salary.  
This provision will not apply if you are offered a comparable position with 
any successor management at the station.

Upon your acceptance of this offer, we will terminate your consulting 
contract.  Your purchase order will be closed following payment of your April 
expenses.

I trust this offer is acceptable and ask for your prompt reply.  I look 
forward to you joining our Nuclear team.

                                                Very truly yours,




                                            /s/ Stephen J. Sweeney
                                            ----------------------
                                                Stephen J. Sweeney


SJS/cab
Attachments(2)


Accepted



/s/ R. A. Ledgett
-----------------

Dated:  5/4/87

EX-10.11

                                                           Exhibit 10.11



          Description of Compensation Arrangement with Bernard W.
          -------------------------------------------------------
                 Reznicek July 1, 1994 - June 30, 1995
                 -------------------------------------




By vote taken June 23, 1994, the Board voted to pay Mr. Reznicek $100,000 for 
his service as Vice Chairman of the Board of Directors for the period July 1, 
1994 through June 30, 1995.

EX-12.1

                                                           Exhibit 12.1




                            Boston Edison Company
            Computation of Ratio of Earnings to Fixed Charges
                        Year ended December 31, 1994
                               (in thousands)


                                               
Net income from continuing operations             $125,022

Income taxes                                        57,114

Fixed charges                                      125,515
                                                  --------

     Total                                        $307,651
                                                  ========

Interest expense                                  $114,937
Interest component of rentals                       10,578
                                                  --------

      Total                                       $125,515
                                                  ========

Ratio of earnings to fixed charges                    2.45
                                                      ====

EX-12.2

                                                         Exhibit 12.2




                          Boston Edison Company
              Computation of Ratio of Earnings to Fixed
          Charges and Preferred Stock Dividend Requirements
                     Year ended December 31, 1994
                            (in thousands)



                                              
Net income from continuing operations            $125,022

Income taxes                                       57,114

Fixed charges                                     125,515
                                                 --------
     Total                                       $307,651
                                                 ========

Interest expense                                 $114,937
Interest component of rentals                      10,578
                                                 --------
     Subtotal                                    $125,515
                                                 --------

Preferred stock dividend requirements              22,982
                                                 --------
     Total                                       $148,497
                                                 ========

Ratio of earnings to fixed charges
 and preferred stock dividend
 requirements                                        2.07
                                                     ====

EX-23.1

                                                           Exhibit 23.1 
 
 
 
                       CONSENT OF INDEPENDENT ACCOUNTANTS 
 
 
 
     We consent to the incorporation by reference in the registration  
statements of Boston Edison Company on Form S-3 (File Nos. 33-36824 and 
33-57840) and on Form S-8 (File Nos. 33-00810, 33-7558, 33-38434, 33-48424, 
33-48425, 33-59662 and 33-59682) of our report dated January 26, 1995 on our
audits of the consolidated financial statements of Boston Edison Company as of
December 31, 1994 and 1993 and for each of the three years in the period ended
December 31, 1994, which report is included in this Annual Report on Form 
10-K. 
 
 
                                              /s/  Coopers & Lybrand, L.L.P. 
                                              ------------------------------ 
                                                   Coopers & Lybrand, L.L.P. 
 
 
 
 
Boston, Massachusetts 
March 28, 1995 
 
 

EX-27.1

 

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<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-END>                               DEC-31-1994
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<OTHER-INCOME-NET>                               5,658
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