SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549
                              
                          FORM 8-K


                       CURRENT REPORT

 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
                              
 Date of Report (Date of earliest event reported)  November 15, 1994



                    COLONIAL GAS COMPANY
   (Exact name of registrant as specified in its charter)

            Massachusetts              0-10007            04-1558100
       (State or other jurisdiction   (Commission         (I.R.S. Employer
          of incorporation or          File Number)       Identification
           organization)                                     Number)
       
  
       40 Market Street, Lowell, Massachusetts      01852
       (Address of principal executive offices)   (Zip Code)


 Registrant's telephone number, including area code:  (508) 458-3171
                              
    (Former name or former address, if changed since last report)
                       Not applicable



Item 5. Other Events

     Colonial  Gas  Company  (the  "Company")  announced  on
November  15,  1994  two cost saving measures  involving  an
early   retirement  program  and  closing  its  two   retail
appliance stores.

     The early retirement program is designed to reduce  the
Company's  workforce  by 5% or 25 positions.  To  meet  this
goal,  the  Company is offering the optional program  to  66
employees  --  representing  13%  of  its  current   utility
workforce of 522 people. Eligible employees must make  their
decision  by  December 31, 1994 and retire  by  January  31,
1995.

    The Company will record the costs of this program in the
fourth  quarter  of 1994. These costs will be  recovered  by
lower  payroll and fringe expenses in the future,  resulting
in  a payback period of less than two years. If all eligible
employees  choose  to retire early, the program's  after-tax
costs  are  expected not to exceed $2.8 million,  while  its
after-tax  savings are estimated at $1.6 million  per  year.
The  Company  projects  that  about  half  of  all  eligible
employees  will participate in the program --  resulting  in
after-tax  costs  of $1.4 million and after-tax  savings  of
$0.8 million per year.

     The  Company will close its two retail appliance stores
on  December 31, 1994. While the Company will no longer sell
appliances such as refrigerators, freezers, and dishwashers,
it  will  continue  to  market gas  heating  and  hot  water
systems.  The store closings are not expected to  result  in
any  layoffs  or  significant lost sales. The  Company  will
record the full cost of discontinuing this line of business,
estimated  not  to  exceed $394,000 after  tax,  during  the
fourth quarter of 1994.


                         SIGNATURES

  Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
  
                                   COLONIAL GAS COMPANY
                                          (Registrant)

Date: November 16, 1994             By: Nickolas Stavropoulos
                                        Vice President - Finance and
                                        Chief Financial Officer


           [END OF FORM 8-K FOR COLONIAL GAS COMPANY]