Filing Under Rule 424(b)(2)
                                            Registration Statement
                                            File Number 61863

PROSPECTUS
                               $75,000,000
                                    
                          COLONIAL GAS COMPANY
                                    
                   Secured Medium Term Notes, Series A
            Due from 9 months to 40 years from Date of Issue
                       _________________________

   Colonial Gas Company (the "Company") intends to offer, from  time  to
time, up to $75,000,000 aggregate principal amount of its Secured Medium
Term  Notes,  Series A (the "Notes") having various  maturities  from  9
months  to 40 years from their dates of issue.  The Notes will be issued
only  in fully registered form, without coupons, and will be denominated
in  U.S.  dollars,  in  minimum denominations  of  $1,000  and  integral
multiples of $1,000 in excess thereof.  The Notes will bear interest  at
a  fixed  rate to be determined by the Company at or prior to  the  sale
thereof  and set forth in a pricing supplement relating to the Notes  (a
"Pricing Supplement").  Interest rates may vary with each Note issued by
the  Company.   Unless  otherwise specified in  the  applicable  Pricing
Supplement,  interest  on  the Notes will  be  payable  semiannually  on
February  15  and  August  15  of each year,  and  at  maturity  or,  if
applicable, upon redemption at the option of the Company.

  The Notes will be issued as a new series of First Mortgage Bonds under
the  Company's Second Amended and Restated First Mortgage Indenture and,
pursuant to such Indenture, secured by a lien on certain property  owned
by the Company.  See "Description of Notes."

   The  aggregate  principal  amount,  interest  rate,  purchase  price,
maturity and redemption, if applicable, and any other material financial
terms  not  described  herein of each Note will  be  set  forth  in  the
applicable Pricing Supplement.

   Each Note will be issued as a Book-Entry Note and will be represented
by a Global Note registered in the name of The Depository Trust Company,
as  Depositary,  or  its  nominee, unless  otherwise  specified  in  the
applicable  Pricing Supplement.  Beneficial interests in a  Global  Note
will  be  shown on, and transfers thereof will be effected only through,
records  maintained by the Depositary and its participants.   Owners  of
beneficial  interests  in a Global Note will not be  considered  holders
thereof  and will not be entitled to receive physical delivery of  Notes
in  definitive form, except under circumstances described  herein.   See
"Description of Notes - Book-Entry Notes."
                        ________________________
                                    
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS 
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE 
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PRICING SUPPLEMENT HERETO.  
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
                                    
                      Price to      Agents'     Proceeds to the
                       Public     Commission    Company (2)(4)
                         (1)        (2)(3)
Per Note                100%         .125% -        99.875% -
                                     .750%          99.250%
Total              $75,000,000     $ 93,750 -     $74,906,250 -
                                   $562,500       $74,437,500

(1)   Unless otherwise indicated in a Pricing Supplement, the Notes will
  be issued at 100% of their principal amount.

(2)  The Company will pay to an Agent a commission ranging from .125% to
  .750%  of  the principal amount of any Note, depending on  its  stated
  maturity,  sold  through such Agent.  The Company also  may  sell  the
  Notes to an Agent at a discount for resale to one or more investors or
  other purchasers at varying prices related to prevailing market prices
  at  the time of resale, as determined by such Agent.  Unless otherwise
  indicated  in  a  Pricing Supplement, any Note sold  to  an  Agent  as
  principal will be purchased by such Agent at a price equal to 100%  of
  the   principal  amount  thereof,  less  a  percentage  equal  to  the
  commission  applicable  to  an agency sale  of  a  Note  of  identical
  maturity, and may be resold by such Agent.  The Notes may also be sold
  by the Company directly to investors, in which case no commission will
  be payable to any Agent.

(3)   The  Company  has  agreed to indemnify the  Agents  against  civil
  liabilities, including liabilities under the Securities Act  of  1933,
  as amended.

(4)   Before  deduction of expenses payable by the Company estimated  at
  $180,000.
                       ___________________________

   The  Notes  are  being offered on a continuing basis by  the  Company
through  the  Agents,  each of which has agreed to  use  its  reasonable
efforts  to  solicit purchases of the Notes.  The Company  reserves  the
right  to sell the Notes directly to purchasers on its own behalf.   The
Company  also  may sell the Notes to the Agents acting as principal  for
resale  to one or more purchasers.  The Notes will not be listed on  any
securities  exchange,  and there can be no assurance  that  all  or  any
portion  of  the Notes offered by this Prospectus will be sold  or  that
there  will  be  a secondary market for any of the Notes.   The  Company
reserves  the right to withdraw, cancel or modify the offer made  hereby
without  notice.  The Company or the Agent that solicits any  offer  may
reject such offer to purchase Notes, in whole or in part.  See "Plan  of
Distribution."
                       ___________________________

Smith Barney Inc.    A.G. Edwards & Sons, Inc.  PaineWebber Incorporated
                       ___________________________

             The date of the Prospectus is September 27, 1995

IN  CONNECTION WITH THE DISTRIBUTION OF NOTES UNDERWRITTEN BY  AN
AGENT  ACTING  AS PRINCIPAL, SUCH AGENT MAY OVERALLOT  OR  EFFECT
TRANSACTIONS WITH A VIEW TO STABILIZING OR MAINTAINING THE MARKET
PRICE  OF  THE  NOTES  AT  LEVELS OTHER THAN  THOSE  WHICH  MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET.  SUCH TRANSACTIONS  MAY  BE
EFFECTED  IN  ANY  OVER-THE-COUNTER MARKET OR OTHERWISE  AND,  IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.


                     AVAILABLE INFORMATION

  The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and  in  accordance therewith files reports and other information
with  the  Securities and Exchange Commission (the "Commission").
Such reports and other information can be inspected and copied at
the  public reference facilities maintained by the Commission  at
Room  1024,  Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C.  20549,  and  at  the  following  regional  offices  of  the
Commission: New York Regional Office, 7 World Trade Center, Suite
1300, New York, New York 10048, and Chicago Regional Office,  500
W.  Madison  Street,  Suite 1400, Chicago,  Illinois  60661;  and
copies of such material can be obtained from the Public Reference
Section  of  the Commission, 450 Fifth Street, N.W.,  Washington,
D.C. 20549, at prescribed rates.


       INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

   The  following documents heretofore filed with the  Commission
pursuant  to  the  Exchange Act are hereby incorporated  in  this
Prospectus by reference and made a part hereof:

     1.    The Company's Annual Report on Form 10-K for the  year
     ended December 31, 1994.

     2.    The  Company's Quarterly Reports on Form 10-Q for  the
     quarters ended March 31, 1995 and June 30, 1995.

  All documents filed with the Commission by the Company pursuant
to  Section 13(a), 13(c), 14 or 15(d) of the Exchange  Act  after
the  date of this Prospectus and prior to the termination of  the
offering of the Notes shall be deemed to be incorporated in  this
Prospectus  by reference and to be part hereof from the  date  of
filing  of such documents.  Any statement contained in a document
incorporated  or deemed to be incorporated by reference  in  this
Prospectus  shall  be deemed to be modified  or  superseded,  for
purposes  of  this  Prospectus, to the extent  that  a  statement
contained  in  this Prospectus or in any other subsequently-filed
document  which  also  is  or is deemed  to  be  incorporated  by
reference   in  this  Prospectus  modifies  or  supersedes   such
statement.  Any statement so modified or superseded shall not  be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus.

   The  information  relating to the Company  contained  in  this
Prospectus  summarizes, is based upon, or refers  to  information
and  financial  statements  contained  in  one  or  more  of  the
documents  incorporated by reference herein.   Accordingly,  such
information  contained herein is qualified  in  its  entirety  by
reference  to such incorporated documents and should be  read  in
conjunction therewith.

  The Company hereby undertakes to provide without charge to each
person  to  whom  a copy of this Prospectus has  been  delivered,
including any beneficial owner, upon the written or oral  request
of  any  such  person,  a copy of any or  all  of  the  documents
referred to above which have been or may be incorporated in  this
Prospectus  by  reference, other than certain  exhibits  to  such
documents.   Requests should be directed to Manager of  Financial
Services,  Colonial  Gas  Company,  40  Market  Street,   Lowell,
Massachusetts 01852 (Telephone: (508) 458-3171).

                          THE COMPANY

   The  Company, a Massachusetts corporation formed in  1849,  is
primarily  a  regulated  natural gas  distribution  utility  that
serves  approximately 136,000 customers in 24  cities  and  towns
located  northwest  of Boston, Massachusetts  and  on  Cape  Cod.
Through  its  wholly-owned energy trucking  subsidiary,  Transgas
Inc.   ("Transgas"),  the  Company  also  provides  over-the-road
transportation  of  liquefied  natural  gas,  propane  and  other
commodities.   References in this Prospectus to  the  Company  do
not,  unless  otherwise  required by the  context,  refer  to  or
include Transgas.

   The  Company's combined natural gas distribution service areas
cover  approximately  622  square miles  and  have  a  year-round
population  of approximately 500,000.  The Company  is  currently
serving  approximately 48% of potential customers in its  service
areas.    Of  its  136,000  customers,  approximately   90%   are
residential  accounts. The Company added 4,456 firm customers  in
1994.   Approximately  55%  of  such  growth  resulted  from  new
construction in its service areas and approximately 45%  resulted
from  conversions to gas from other energy sources  for  existing
homes and businesses.

   The address of the Company's principal executive office is  40
Market  Street,  Lowell,  Massachusetts 01852  (Telephone:  (508)
458-3171).



                 SELECTED FINANCIAL INFORMATION
                     (Dollars in thousands)

                                                          Twelve Months
                                                              Ended
                           Year Ended December 31,        June 30,1995
                           1992      1993       1994        (Unaudited)

Operating Revenues         $145,054  $166,261  $166,259      $154,216
Utility Operating Income   $ 17,151  $ 18,890  $ 17,517(a)   $ 17,152(a)
Net Income                 $ 10,643  $ 12,022  $ 11,009(a)   $  9,114(a)
Ratio of Earnings to           3.08      3.18      2.92          2.38
Fixed Charges(b)               

                                                    June 30, 1995
                                                     (Unaudited)
Long-term Debt (excluding current portion)          $ 75,035
Common Equity                                        104,566
Total Capitalization                                $179,601

__________________

      (a)  Includes effect of a restructuring charge recorded  in
December 1994 in the amount of $1,965 after tax.

     (b)  Ratios of Earnings to Fixed Charges for the years ended
December  31,  1990  and 1991 were 1.74 and  2.31,  respectively.
Fixed  charges  include the financing costs of the Company's  gas
inventories   which  the  Massachusetts  Department   of   Public
Utilities  allows to be fully recovered through the Cost  of  Gas
Adjustment  Clause  and  which  are  reported  in  the  Company's
consolidated  statement  of income as cost  of  gas  sold.   Fuel
financing costs were $1,078, $671, $433, $390, $504 and $636  for
the years ended December 31, 1990, 1991, 1992, 1993 and 1994, and
for the twelve months ended June 30, 1995, respectively.

                        USE OF PROCEEDS

  The net proceeds from the sale of the Notes offered hereby will
be  used  for  utility  plant construction  and,  to  the  extent
described  in  a Pricing Supplement, refunding of maturing  long-
term  indebtedness,  and for repayment of  short-term  bank  debt
incurred for such purposes.

                      DESCRIPTION OF NOTES

   The following statements are a summary only, do not purport to
be  complete, and are subject to the detailed provisions  of  the
Second Amended and Restated First Mortgage Indenture dated as  of
June 15, 1992 between the Company and The First National Bank  of
Boston,  as  Trustee (the "Trustee"), and indentures supplemental
thereto, including the supplemental indenture creating the Notes,
the  form  of  which is filed as an exhibit to  the  Registration
Statement  of  which  this Prospectus is  a  part  and  to  which
reference  is hereby made (collectively, the "Indenture").   This
summary  incorporates by reference the Indenture and is qualified
in  its  entirety by such reference.  Certain of the  terms  used
below are used herein with the meanings ascribed to such terms by
the Indenture.

General

   The  Notes will be issued as a new series of additional  First
Mortgage Bonds (the "Bonds") under the Indenture.  The Notes will
be limited in aggregate principal amount to $75,000,000.

  The Notes will be issued in fully registered form only, without
coupons.  The Notes will be issued in book-entry form (the "Book-
Entry  Notes").  The denominations of Notes will  be  $1,000  and
multiples thereof.

  The Notes will be offered on a continuing basis and will mature
from  nine  months to forty years from their issue  dates.   Each
Note will bear interest at a fixed rate.  The Notes will not have
any conversion rights.

   The Pricing Supplement relating to the Notes will describe the
following terms:  (i) the purchase price of such Notes which  may
be  expressed  as a percentage of the principal amount  at  which
such Notes will be issued; (ii) the date on which such Notes will
be  issued;  (iii) the date on which the principal of such  Notes
will  become  due and payable; (iv) the rate per annum  at  which
such  Notes will bear interest; (v) the date or dates from  which
any such interest shall accrue; (vi) the terms for redemption, if
any;  and  (vii)  any other terms of such Notes not  inconsistent
with the Indenture.

Payment of Principal and Interest

   The Notes will bear interest at a fixed rate from the later of
their date of issue or the most recent date on which any interest
has  been  paid or duly provided for at the fixed rate per  annum
specified therein and in the applicable Pricing Supplement, until
the  principal  of  such  Notes is paid  or  made  available  for
payment.   Interest  on  the Notes will be payable  semi-annually
each February 15 and August 15 (unless otherwise indicated in the
applicable  Pricing  Supplement) and at maturity  or  redemption.
Each  payment  of interest will include interest accrued  to  but
excluding  the interest payment date.  Interest will be  computed
on the basis of a 360-day year of twelve 30-day months.

   Principal of and interest on Notes will be paid in immediately
available  funds in the manner described below under  "Book-Entry
Notes."   The  principal of and premium, if any, and interest  at
maturity on all Notes will be paid in immediately available funds
to  the holders of record of such Notes (which, in the case of  a
Global  Note  (as defined herein) representing Book-Entry  Notes,
will  be  the Depositary (as defined herein) or its nominee),  on
the  date  of such payment as provided in the indenture  provided
that, in the case of Notes not represented by a Global Note, such
Notes  are  presented to the Trustee in time for the  Company  to
make  such payments in such funds in accordance with its and  the
Trustee's  normal procedures. The Company may  use  one  or  more
paying agents.

Redemption

   To  the extent set forth in the applicable Pricing Supplement,
the  Notes  may be redeemable, at the option of the  Company,  in
whole  or  in  part, at the redemption prices set forth  therein.
The  Notes are also subject to redemption at the principal amount
thereof, in whole or in part, through the application of  eminent
domain  moneys  or  proceeds of insurance arising  from  loss  or
casualty.   The applicable Pricing Supplement may also set  forth
the  terms  of any rights of the holders of notes to require  the
redemption or repurchase thereof by the Company.

   Except as may otherwise be specified in the applicable Pricing
Supplement, notice of redemption shall be published or mailed  to
the  registered owners of the Notes to be redeemed  at  least  30
days but not more than 60 days prior to the redemption date.

Security

    The   Indenture  constitutes  a  first  mortgage  lien   upon
substantially  all  of the fixed property and franchises  of  the
Company,  consisting  principally of gas  distribution  property,
real  estate and buildings, subject to permitted liens.  The lien
of  the  Indenture secures all Bonds (including the  Notes)  from
time  to time issued and outstanding under the Indenture, equally
and  ratably and without distinction as to series (except  as  to
sinking  funds  and  other analogous funds  established  for  the
exclusive benefit of a particular series).  At June 30, 1995, the
Company  had  $82,363,636  aggregate principal  amount  of  Bonds
outstanding,   consisting  of  five   separate   series.    These
outstanding  series of Bonds, and any future series of  Bonds  to
the extent so designated at the time of their issue, are referred
to  in  the  Indenture as Prior Series Bonds,  and  as  such  are
entitled,  so  long as they are outstanding, to  approve  certain
actions  and  to waive certain restrictions under the  Indenture.
Except   to   the  extent  described  below  under   "Restrictive
Covenants"  or specified in a Pricing Supplement, the Notes  will
not be designated as Prior Series Bonds.

   The  Indenture  subjects to the lien thereof property  of  the
character  initially mortgaged which is subsequently acquired  by
the  Company.   Such after-acquired property may  be  subject  to
prior liens which are outstanding or created at the time of  such
acquisition in an amount not in excess of 60% of the cost or fair
value,  whichever  is  less,  of  such  after-acquired  property,
subject to an overall limit on debt secured by such prior  liens.
The  property  excepted from the lien of the  Indenture  consists
principally of:  cash and securities (unless deposited  with  the
Trustee);  contracts, accounts receivable, leases  and  operating
agreements;  equipment, spare parts, tools,  materials,  supplies
and  fuel  held  for  sale, lease, use  or  distribution  in  the
ordinary  course of business of the Company; vehicles;  leasehold
interests and leasehold improvements; and other real and personal
property  which  is not an integral part of the gas  distribution
operations of the Company.  Neither the capital stock of Transgas
nor  any  assets  of  Transgas are subject to  the  lien  of  the
Indenture.

   The Company's principal plants and properties, insofar as they
constitute   real  estate,  are  owned  in  fee;  certain   other
facilities  of the Company are located on premises  held  by  the
Company under leases, permits or easements; and the Company's gas
distribution systems (which constitute a substantial  portion  of
the  Company's investment in physical property) are for the  most
part  located  under highways, streets, other  public  places  or
property  owned  by others for which permits, grants,  easements,
licenses   or   franchises  (deemed  satisfactory   but   without
examination of underlying land titles) have been obtained.

   The  Indenture provides that the Trustee shall have a lien  on
the  mortgaged property, prior to the Bonds, for the  payment  of
its  reasonable  compensation  and  expenses  and  for  indemnity
against certain liabilities.

Issuance of Additional Bonds

  The maximum principal amount of Bonds which may be issued under
the Indenture is not limited.  Additional Bonds of any series may
be issued from time to time, upon meeting the requirements of the
Indenture, in principal amounts equal to:

     (1)   60% of the lesser of the cost or fair value of the net
     amount  of additional property not previously funded,  which
     means,  in  general terms, the fixed assets of  the  Company
     constituting "gas utility property" less any retirements;

     (2)   the principal amount of Bonds which have been  or  are
     then  being  retired,  and which have  not  previously  been
     funded,   plus  certain  excess  sinking  fund  and  similar
     payments; or

     (3)   the amount of cash deposited with the Trustee for such
     purpose  up to a maximum of $2,000,000 of cash held  by  the
     Trustee at any time.

   In  order to issue Bonds based on additional property or cash,
the  Company  must  have net earnings for any twelve  consecutive
month  period  within the fifteen months preceding  the  date  of
issuance equal to at least twice the annual interest payments  on
all outstanding Bonds (including the Bonds proposed to be issued)
and  any  other debt secured by a lien equal or superior  to  the
lien  of  the  Indenture, and at least 90% of  the  required  net
earnings must be from the Company's gas utility operations.  This
net  earnings requirement also must be met for the issue of Bonds
based  on  retired  Bonds  unless the  Bonds  being  issued  bear
interest at a rate no higher than the retired Bonds or are issued
no  later  than 3 years after the stated maturity of the  retired
Bonds.

   In  addition  to  the foregoing, without the approval  of  the
holders  of 66 2/3% of the outstanding principal amount  of  each
series  of  Prior  Series Bonds, secured long-term  debt  of  the
Company,  which would include Bonds with a maturity of more  than
one  year, may not exceed 55% of the total capitalization of  the
Company.   Total  capitalization  consists  of  long-term   debt,
preferred stock and common equity of the Company.

   The  Company expects to issue the Notes primarily on the basis
of  additional  property.   At July 31,  1995,  the  Company  had
approximately $69,920,000 net amount of additional  property  and
$10,548,864 of retired Bonds, entitling it in accordance with the
provisions of the Indenture to issue approximately $52,500,000 of
additional Bonds.

    The   issuance  of  the  Notes  has  been  approved  by   the
Massachusetts Department of Public Utilities, provided  that  not
more than $65,843,062 of Notes may be issued prior to August  31,
1996.

Release of Property

   The  Indenture  provides for the release of  property  of  the
Company   from   the   lien  of  the  Indenture   under   various
circumstances,  so  long  as no default exists,  based,  in  most
circumstances,  on the net proceeds received in  connection  with
the  disposition of the property being applied to  acquire  other
gas  utility  property  of  at least equal  value  which  becomes
subject to the lien of the Indenture on being deposited with  the
Trustee.

Restrictive Covenants

   The Indenture contains the following covenants for the benefit
of the holders of all Bonds:

     Limitation on Encumbrances.  The Company will not create  or
  suffer  any other encumbrance or lien upon the property subject
  to  the  lien  of  the  Indenture except  (i)  certain  routine
  permitted  liens; (ii) liens on after-acquired  property  which
  do  not  exceed  60%  of the cost or fair value,  whichever  is
  less,  of  the acquired property and which existed at the  time
  of  acquisition or were contemporaneously created to secure the
  purchase  price, provided that such liens may  not,  except  in
  certain  circumstances, exceed 15% of the principal  amount  of
  outstanding  Bonds  without the consent of the  holders  of  at
  least  66  2/3%  of the principal amount of outstanding  Bonds;
  and  (iii) liens on after-acquired property acquired through  a
  sale  and  leaseback transaction which complies with  the  debt
  restrictions described below.

     Reserve  for  Depreciation.  The Company  will  maintain  an
  annual  reserve  for depreciation of not less than  2%  of  its
  depreciable   property  (excluding  certain  discontinued   gas
  manufacturing facilities).

     The  Indenture  also provides that, so  long  as  any  Prior
  Series  Bonds  are outstanding, the Company will  not,  without
  the  consent  of  the  holders of  at  least  66  2/3%  of  the
  principal  amount  of each series of Prior  Series  Bonds  then
  outstanding:

     Dividend  Restrictions.   Make any  restricted  payments  to
  common stockholders unless the sum of restricted payments  made
  on  or  after  January  1, 1992 will not  exceed  100%  of  the
  Company's  net income available for common dividends from  that
  date  (reduced  by certain stock repurchases in excess  of  net
  proceeds  of  stock  sales), plus an  amount  which  starts  at
  $8,000,000 and increases to $12,500,000 when certain series  of
  Prior Series Bonds cease to be outstanding.

     Debt  Restrictions.   Incur (i) any indebtedness  for  money
  borrowed  unless  all indebtedness for money  borrowed  (taking
  into account the proposed transaction) would not exceed 63%  of
  the  sum  of short-term debt plus total capitalization  of  the
  Company  or (ii) any secured long-term debt unless all  secured
  long-term  debt (taking into account the proposed  transaction)
  would  not  exceed 55% of total capitalization.  The  foregoing
  restrictions  would apply to the issuance of  additional  Bonds
  under the Indenture.

     Operating  Lease Restrictions.  Become liable as  lessee  or
  purchaser  under  any  operating lease or installment  purchase
  contract  having a term of more than 3 years if  the  aggregate
  payments under all such operating leases and contracts  in  any
  12  month period would exceed 3% of total capitalization of the
  Company.   The  determination  of  the  status  of  leases   in
  existence  on December 31, 1991 as operating or capital  leases
  is made as of that date.

  For purposes of the debt restrictions above, but not otherwise,
the Notes will be considered Prior Series Bonds.

Events of Default

   The  Indenture  provides generally that the  following  events
constitute  a  default: (i) failure by the  Company  to  pay  the
principal  of any Bond when due; (ii) failure by the  Company  to
pay  interest  on  any Bond for a period of ten days  after  such
payment  is due; (iii) failure of the Company to pay any sinking,
replacement  or analogous fund installment when due; (iv)  breach
of  certain  representations, warranties  and  covenants  of  the
Company  (in the case of certain covenants, after a 30 day  grace
period); (v) failure to pay certain other indebtedness or failure
to  perform any covenant with respect to such indebtedness  after
any  applicable  grace period, the effect  of  which  causes,  or
permits  the  holders thereof to cause, such indebtedness  in  an
amount  in  excess  of 3/4 of 1% of tangible  net  worth  of  the
Company to become due prior to its stated maturity or permits the
holders of such indebtedness to elect a majority of the board  of
directors  of  the Company; (vi) failure to perform any  covenant
relating  to preferred stock of the Company, the effect of  which
would  require,  or permit the holders thereof  to  require,  the
Company  to  redeem such preferred stock prior to  any  mandatory
redemption date; (vii) a final judgment against the Company in  a
specified material amount which remains unstayed for more than 60
days;  and  (viii) certain events of bankruptcy,  insolvency  and
reorganization  of the Company.  The failure of  the  Company  to
redeem  the Series CE Bonds at the request of the original  owner
of those Bonds in the event of a change of control of the Company
(as defined in the supplemental indenture providing for the issue
of Series CE Bonds) is also a default under the Indenture.

  If a default exists, the Trustee may and, at the request of the
holders  of  at  least  25%  of  the  principal  amount  of   the
outstanding  Bonds,  shall  declare  all  of  the  Bonds  to   be
immediately due and payable, subject to the right of the  holders
of a majority of the principal amount of the outstanding Bonds to
rescind  such  declaration if the default has  been  cured.   The
holders  of  at  least 66 2/3%  of the principal  amount  of  the
outstanding Bonds (including at least 60% in principal amount  of
Bonds  of  any  Prior Series specially affected)  may  waive  any
default  except  a  payment default or a lien  default.   Upon  a
default,  all  outstanding  Bonds  generally  share  ratably   in
accordance with the principal, premium, if any, and interest then
owing  on  such outstanding Bonds.  In addition to principal  and
interest,  the Indenture provides that the holders of the  Series
CE  and  CH Bonds are entitled to receive upon default,  a  make-
whole premium.

   Subject  to provision for indemnification of the Trustee,  the
holders  of  a majority in principal amount of outstanding  Bonds
have the right to direct the time, method and place of conducting
any  proceeding  for  any  remedy available  to  the  Trustee  or
exercising any trust or power conferred on the Trustee under  the
Indenture.   No  holder  of  any Bond  will  have  any  right  to
institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such holder shall have previously given
to  the  Trustee written notice of an existing default and unless
also  the  holders  of at least 25% in principal  amount  of  the
outstanding  Bonds shall have made written request,  and  offered
reasonable  security  or indemnity, to the Trustee  to  institute
such proceeding as trustee, and the Trustee shall have failed  to
institute such proceeding within 30 days.  However, the holder of
any  Bond will have an absolute right to receive payment  of  the
principal of and premium, if any, and interest on such Bond on or
after the due dates and to institute suit for the enforcement  of
any such payment.

  The Indenture requires the Company to certify to the Trustee at
the  time of the issuance of any Bonds whether there is a default
in  the  performance  or  observance  of  any  provision  of  the
Indenture.   The  Indenture also requires an  annual  opinion  of
counsel as to the maintenance of the lien of the Indenture.

Modification of the Indenture

  Modification and amendments of the Indenture may be made by the
Company  and  the Trustee with the consent of the holders  of  at
least 66 2/3% in principal amount of the outstanding Bonds of all
series affected thereby and of each series affected thereby in  a
manner  different than other affected series; provided,  however,
that  no  such  modification or amendment  may  (i)  without  the
consent  of the holder of a Bond, affect or impair the obligation
of  the  Company  in respect of the principal of or  premium  and
interest on such Bond or change the amount or rate or extend  the
time  of such payment, or (ii) without the consent of the holders
of  all Bonds outstanding, reduce the percentage required  for  a
modification or amendment or the creation, except as  authorized,
of a lien prior to or on a parity with the lien of the Indenture.

   The  Company  and  the Trustee may agree  to  certain  routine
modifications and amendments of the Indenture without the consent
of the holders of the Bonds, including modifications in regard to
matters  arising  under  the Indenture as  may  be  necessary  or
desirable  and not inconsistent with the security and  protection
intended to be conferred upon the Trustee and the Bondholders.

Satisfaction and Discharge of the Indenture

  The Indenture provides that when, among other things, all Bonds
not previously delivered to the Trustee for cancellation (i) have
become due and payable, (ii) will become due and payable at their
stated  maturity within seven months, or (iii) are to  be  called
for  redemption within seven months, and the Company deposits  or
causes  to be deposited with the Trustee a sum sufficient to  pay
the  whole  amount of the principal of and premium, if  any,  and
interest  due  or to become due on the Bonds, then the  Indenture
will  cease  to be of further effect (except as to the  Company's
obligations  to compensate, reimburse and indemnify  the  Trustee
pursuant to the Indenture and certain other obligations), and the
Company  will  be  deemed to have satisfied  and  discharged  the
Indenture.

Consolidation, Merger and Sale of Assets

   The Indenture does not prevent the consolidation or merger  of
the  Company  with or into any other corporation, or  the  merger
into  the Company of any other corporation, or the sale or  lease
by  the  Company  of  its assets substantially  as  an  entirety,
provided  that  (i) any consolidation, merger, sale  or  transfer
shall be on terms that do not impair the lien of the Indenture or
any  of the rights or powers of the Trustee or the holders of the
Bonds; (ii) the successor corporation shall expressly assume  the
due  and  punctual  payment of the Bonds and the  observance  and
performance  of all covenants, conditions and provisions  of  the
Indenture; (iii) immediately after a merger or consolidation, the
surviving  corporation shall be in compliance with the provisions
of  the  Indenture in all material respects; and (iv) so long  as
the  Series  CH Bonds are outstanding, the successor  corporation
shall  be  able  to  incur $1.00 of additional  indebtedness  for
borrowed money.  See "Restrictive Covenants."

Book-Entry Notes

    Unless   otherwise   specified  in  the  applicable   Pricing
Supplement,   the  Notes  will  be  issued  in  book-entry   form
("Book-Entry Notes").  Upon issuance, all Book-Entry Notes having
identical  terms and provisions will be represented by  a  single
global  security  (each,  a  "Global  Note").   Unless  otherwise
specified  in a Pricing Supplement, each Global Note representing
Book-Entry  Notes will be deposited with, or on  behalf  of,  The
Depository  Trust Company (the "Depositary"), and  registered  in
the  name  of a nominee of the Depositary.  Except as  set  forth
below, a Global Note may not be transferred except as a whole  by
the Depositary to a nominee of the Depositary or by a nominee  of
the  Depositary  to  the  Depositary or another  nominee  of  the
Depositary or any nominee to a successor of the Depositary  or  a
nominee of such successor.

   The Depositary has advised the Company and the Agents that  it
is  a  limited-purpose trust company organized under the laws  of
the State of New York, a member of the Federal Reserve System,  a
"clearing   corporation"  within  the  meaning  of  the   Uniform
Commercial  Code and a "clearing agency" registered  pursuant  to
the   provisions  of  Section  17A  of  the  Exchange  Act.   The
Depositary was created to hold securities of its participants and
to   facilitate  the  clearance  and  settlement  of   securities
transactions  among  its participants in such securities  through
electronic  book-entry changes in accounts of  the  participants,
thereby  eliminating the need for physical movement of securities
certificates.   The Depositary's participants include  securities
brokers   and  dealers  (including  the  Agents),  banks,   trust
companies, clearing corporations and certain other organizations,
some  of  whom (and/or their representatives) own the Depositary.
Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies  that
clear  through  or  maintain  a  custodial  relationship  with  a
participant, either directly or indirectly. Persons who  are  not
participants  may  beneficially  own  securities  held   by   the
Depositary only through participants.

    Upon   the  issuance  of  Book-Entry  Notes  by  the  Company
represented by a Global Note, the Depositary will credit, on  its
book-entry  registration  and  transfer  system,  the  respective
principal  amounts  of the Book-Entry Notes represented  by  such
Global Note to the accounts of participants.  The accounts to  be
credited  shall be designated by the Agent through  or  by  which
such   Book-Entry  Notes  are  sold.   Ownership  of   beneficial
interests  in  a  Global Note will be limited to participants  or
persons  that  may  hold  interests  through  participants.    In
addition, ownership of beneficial interests by participants in  a
Global  Note will be evidenced only by, and the transfer  of  any
such  ownership  interest will be effected only through,  records
maintained by the Depositary or its nominee for such Global Note.
Ownership  of  beneficial interests in  such  a  Global  Note  by
persons that hold through participants will be evidenced only by,
and  the  transfer  of  any such ownership interest  within  such
participant will be effected only through, records maintained  by
such  participant. The laws of some states require  that  certain
purchasers   of  securities  take  physical  delivery   of   such
securities in certificated form.  Such limits and such  laws  may
impair  the ability to transfer beneficial interests in a  Global
Note.

   So  long  as the Depositary, or its nominee, is the registered
owner  of  a Global Note, the Depositary or its nominee,  as  the
case  may be, will be considered the sole owner or holder of  the
Book-Entry Notes represented by such Global Note for all purposes
under  the  Indenture.   Except  as  provided  below,  owners  of
beneficial  interests  in  a Global Note representing  Book-Entry
Notes  will  not  be  entitled  to  have  such  Book-Entry  Notes
registered  in  their names, will not receive or be  entitled  to
receive physical delivery of Notes in certificated form and  will
not  be  considered  the  owners or  holders  thereof  under  the
Indenture.  Accordingly, each person owning a beneficial interest
in  a  Global Note must rely on the procedures of the  Depositary
and,  if  such person is not a participant, on the procedures  of
the  participant through which such person owns its interest,  to
exercise  any  rights  of a holder under the  Indenture  or  such
Global  Note.   The  Company  understands  that,  under  existing
industry  practice,  in the event that the Company  requests  any
action of holders of Book-Entry Notes or an owner of a beneficial
interest  in  a Global Note desires to take any action  that  the
Depositary,  as  the holder of such Global Note, is  entitled  to
take,  the  Depositary would authorize the participants  to  take
such  action and that the participants would authorize beneficial
owners  owning through such participants to take such  action  or
would  otherwise  act upon the instructions of beneficial  owners
owning through them.

   Payments  of principal, interest and premium, if any,  on  the
Book-Entry Notes represented by one or more Global Notes will  be
made by the Company through the Trustee to the Depositary, or its
nominee,  as  the case may be, as the registered  owner  of  such
Global  Note or Notes.  Neither the Company nor the Trustee  will
have  any  responsibility or liability  for  any  aspect  of  the
records  relating  to or payments made on account  of  beneficial
ownership  interests.  The Company expects that  the  Depositary,
upon  receipt of any payment of principal, interest and  premium,
if  any, in respect of a Global Note, will credit immediately the
accounts  of  the  related participants with payment  in  amounts
proportionate to their respective holdings in principal amount of
beneficial interests in such Global Note as shown on the  records
of  the  Depositary.  The Company also expects that  payments  by
participants to owners of beneficial interests in a  Global  Note
will  be governed by standing customer instructions and customary
practices,  as  is  now  the case with securities  held  for  the
accounts  of  customers in bearer form or registered  in  "street
name," and will be the responsibility of such participants.

   The  Company will issue Notes in certificated form in exchange
for  Global Notes representing Book-Entry Notes only if  (i)  the
Depositary  is  at any time unwilling or unable  to  continue  as
depositary  and  a successor depositary is not appointed  by  the
Company  within 90 days, (ii) the Company at any time  determines
not  to  have Book-Entry Notes represented by one or more  Global
Notes, or (iii) a default under the Indenture has occurred and is
continuing.   In  any  such instance, an owner  of  a  beneficial
interest in any Global Note will be entitled to physical delivery
of Notes in certificated form which are equal in principal amount
to  such beneficial interest and to have such Notes registered in
its name.  Such Notes so issued will be issued in registered form
only without coupons and in denominations of $1,000 and multiples
thereof.   If  notes are issued in certificate form, the  Company
will   execute  a  supplemental  indenture  providing  for   such
certificates  and,  among other things, establishing  appropriate
record dates for the payment of interest.

   The  information  above  concerning  the  Depositary  and  the
Depositary's  book-entry  system  has  been  obtained  from   the
Depositary.  None of the Company, the Trustee or the Agents takes
responsibility for the accuracy or completeness thereof.

  None of the Company, the Trustee or any agent for payment on or
registration of transfer or exchange of any Global Note will have
any  responsibility or liability for any aspect  of  the  records
relating  to or payments made on account of beneficial  interests
in  such Global Note or for maintaining, supervising or reviewing
any records relating to such beneficial interests.

Concerning the Trustee

   The  First  National  Bank of Boston,  as  Trustee  under  the
Indenture,  is  the  trustee for Bonds of the  Company  currently
outstanding  under the Indenture.  It has from time to  time  and
may  continue  to  provide loans to the Company in  the  ordinary
course of business.

                   CERTAIN TAX CONSIDERATIONS

   The  following summarizes certain United States Federal income
tax  considerations that may be relevant to a holder of Notes and
is   based  on  laws,  existing  Treasury  regulations,  rulings,
judicial  decisions and other authorities as of the date  hereof,
all of which are subject to change.  Prospective investors should
consult   their  own  tax  advisors  in  determining  their   tax
consequences  from  purchasing, holding or  disposing  of  Notes,
including the application to their particular situations  of  the
tax  considerations  discussed  below,  and  in  determining  the
application  of  state,  local or  other  tax  laws  as  well  as
prospects   for   changes  in  Federal   income   tax   laws   or
interpretations.

   Payments  of  interest on a Note (other than an OID  Note,  as
discussed below) will generally be taxable to a holder  as  gross
income  at the time it is paid or accrued in accordance with  the
holder's method of tax accounting.  A Note may be issued  for  an
amount  less than its stated redemption price at stated maturity,
and  that  difference  may give rise to original  issue  discount
("OID").   Notes issued with OID are referred to as "OID  Notes."
Holders  of OID Notes should be aware that they must, in general,
include OID income on an accrual method, i.e., in advance of  the
related  cash  payments.  Notice will be given in the  applicable
Pricing  Supplement when the Company determines that a particular
Note will be an OID Note.

                      PLAN OF DISTRIBUTION

   Under the terms of a Distribution Agreement between the Agents
and  the  Company, the Notes are being offered  on  a  continuing
basis by the Company through the Agents, which have agreed to use
their reasonable efforts to solicit offers to purchase the Notes.
The Notes will be issued at 100% of the principal amount thereof,
unless  otherwise indicated in the applicable Pricing Supplement.
The Company will pay to the Agents a commission of from .125%  to
 .750%  of  the  principal amount of each Note, depending  on  its
maturity, sold through the Agents.  The Company has reserved  the
right to appoint other agents, upon 30 days' prior written notice
to the Agents, but only if such other agent agrees to be bound by
the  terms  of the Distribution Agreement; any such other  agents
will be named in the appropriate Pricing Supplement.  The Company
and  the  Agents will have the right to accept offers to purchase
Notes and may reject any such offer, in whole or in part.

   The  Company  also  may sell Notes to  any  Agent,  acting  as
principal, at a discount to be agreed upon at the time  of  sale,
for  resale  to one or more investors or to another broker-dealer
(acting  as  principal for purposes of resale) at varying  prices
related  to prevailing market prices at the time of such  resale,
as  determined  by  such  Agent.  An  Agent  may  resell  a  Note
purchased  by  it  as  principal to another  broker-dealer  at  a
discount,  provided such discount does not exceed the  commission
or discount received by such Agent from the Company in connection
with  the original sale of such Note.  The Company may also  sell
Notes  directly to investors on its own behalf at a price  to  be
agreed  upon  at  the time of sale.  In the case  of  sales  made
directly by the Company, no commission or discount will  be  paid
or allowed.

   The  Notes  will not have an established trading  market  when
issued  and  will not be listed on any securities exchange.   The
Agents may make a market in the Notes but are not obligated to do
so  and  may  discontinue any market-making at any  time  without
notice.  There can be no assurance of a secondary market for  any
Notes, or that any Notes will be sold.

   The  Agents, whether acting as agent or principal, and dealers
to  which  the Agents may sell for resale to investors  or  other
purchasers may be deemed to be "underwriters" within the  meaning
of the Securities Act of 1933, as amended (the "Securities Act").
The  Company  has agreed to indemnify the Agents against  certain
civil  liabilities,  including liabilities under  the  Securities
Act,  or to contribute to payments the Agents may be required  to
make  in  respect  thereof.   The  Company  also  has  agreed  to
reimburse the Agents for certain expenses.

   The  Agents have in the past performed, and in the future  may
perform, various services for the Company in the ordinary  course
of business.

                         LEGAL OPINIONS

   The  validity of the Notes will be passed upon for the Company
by  Palmer  &  Dodge, counsel to the Company, One Beacon  Street,
Boston,  Massachusetts, and certain legal matters will be  passed
upon  for the Agents by Winthrop, Stimson, Putnam & Roberts,  One
Battery Park Plaza, New York, New York.

                            EXPERTS

    The  financial  statements  and  schedules  included  in  the
Company's Annual Report on Form 10-K for the year ended  December
31, 1994, incorporated by reference in this Prospectus and in the
Registration Statement, have been audited by Grant Thornton  LLP,
independent auditors, as indicated in their reports with  respect
thereto,  and  are incorporated by reference herein  in  reliance
upon  the  authority  of  said firm as  experts  in  giving  said
reports.

                                   
                                   
                                   
                                   
                                   
                                   
No  dealer, salesperson or any     
other    person    has    been     
authorized   to    give    any     
information  or  to  make  any              $75,000,000
representation  not  contained     
in  this Prospectus (including     
any    accompanying    Pricing              Colonial Gas
Supplement) and, if  given  or                Company
made,   such  information   or     
representation  must  not   be            
relied  upon  as  having  been     
authorized  by the Company  or     
by  any  of the Agents.   This     
Prospectus   (including    any          SECURED MEDIUM TERM
accompanying           Pricing            NOTES, SERIES A
Supplement)      does      not     
constitute an offer to sell or     
a solicitation of any offer to            ________________
buy   any  of  the  securities     
offered  hereby or thereby  in     
any jurisdiction to any person               PROSPECTUS
to whom it is unlawful to make     
such     offer     in     such     
jurisdiction.    Neither   the           September 27, 1995
delivery of this Prospectus by           _________________
the  Company  or  any  of  the     
Agents   nor  any  sale   made           Smith Barney Inc.
hereunder  shall,  under   any     
circumstances,   create    any       A.G. Edwards & Sons, Inc.
implication  that  there   has     
been  no change in the affairs        PaineWebber Incorporated
of  the Company since the date
hereof or that the information
contained  or incorporated  by
reference herein is correct as
of  any time subsequent to its
date.



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      TABLE OF CONTENTS

                          Page

Available Information        
Incorporation of Certain
  Information by Reference   
The Company                  
Selected Financial 
  Information                
Use of Proceeds              
Description of Notes         
Certain Tax Considerations  
Plan of Distribution        
Legal Opinions              
Experts