8-K

                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: December 31, 1996
                  (Date of earliest event reported)


                     Commission File Number 0-1125


                    MADISON GAS AND ELECTRIC COMPANY
          (Exact name of registrant as specified in its charter)


                 Wisconsin                           39-0444025
       (State or other jurisdiction of            (IRS Employer
       incorporation or organization)            Identification No.)


             133 South Blair Street, Madison, Wisconsin 53703
           (Address of principal executive offices and ZIP code)


                                (608) 252-7000
            (Registrant's telephone number including area code)

Item 5      Other Events

            On December 31, 1996, Madison Gas and Electric Company issued a
            press release (a copy of which is attached as Exhibit 99 to this
            Current Report on Form 8-K) announcing that its fourth-quarter and
            year-end earnings will be negatively impacted by several factors.

Exhibit     Description

  99        Additional Exhibits

            Madison Gas and Electric Company's press release dated
            December 31, 1996.


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 thereunto duly authorized.

                                 MADISON GAS AND ELECTRIC COMPANY
                                 (Registrant)

Date:  December 31, 1996         /s/ David C. Mebane
                                 David C. Mebane
                                 Chairman, President and Chief Executive
                                 Officer
                                 (Duly Authorized Officer)


Date:  December 31, 1996         /s/ Joseph T. Krzos
                                 Joseph T. Krzos
                                 Vice President - Finance
                                 (Chief Financial and Accounting
                                 Officer)

EX-99

                                                                    Exhibit 99


                       Madison Gas and Electric Company
               Exhibit Index to Form 8-K Current Report
                               December 31, 1996


               Madison Gas and Electric Company's Press Release
                            Dated December 31, 1996


Madison Gas and Electric Co. Reports Fourth-Quarter Earnings Impacts

Madison, Wis., Dec. 31, 1996-Madison Gas and Electric Co. (MGE) (NASDAQ: MDSN)
announced today that its fourth-quarter and year-end earnings will be
negatively impacted by several factors. First, extended outage of the Kewaunee
Nuclear Power Plant (Kewaunee) due to the repair of the steam generators will
increase MGE's purchased power and maintenance expenses related to Kewaunee by
approximately $1.5 million in the fourth quarter of 1996. Second, MGE's gas
marketing subsidiary, Great Lakes Energy Corp. (GLENCO), generated significant
income in prior years. Under a sharing arrangement with the regulated utility,
approximately $2.7 million is being returned to MGE's gas utility customers.
This impact will be recorded in the fourth quarter of 1996. Finally, MGE's gas
marketing subsidiaries, GLENCO and American Energy Management (AEM), have
entered into an agreement in principle to form a joint venture with another
gas marketing company. The agreement is expected to be signed and formally
announced within the next 10 days. To properly reflect the current value of
its investment in GLENCO and AEM, and to restructure these activities for the
future, MGE will take a one-time charge in the fourth quarter of 1996 of 
approximately $16 million. All of these nonrecurring expenses are before 
taxes and were not reflected in the earnings reported as of Sept. 30, 1996.

Kewaunee status

MGE has a 17.8% ownership interest in Kewaunee. Kewaunee was taken out of
service on Sept. 21, 1996, for scheduled refueling and maintenance. The outage
was expected to last five weeks, but inspection of previously repaired steam
generator tubes showed continued degradation of the repaired joints. This
prevents further operation of the Kewaunee plant until the tubes are repaired.
It is uncertain when Kewaunee will return to service. Thus, MGE filed an
application with the Public Service Commission of Wisconsin on Dec. 20, 1996,
seeking an interim rate increase to recover incremental power costs and
maintenance expenses due to the loss of Kewaunee.

MGE is a public utility that generates, transmits and distributes electricity
to 120,000 customers in Dane County. The company transports and distributes
natural gas to 103,000 customers in seven South Central and Western Wisconsin
counties. MGE has served the Madison area since 1896.