FORM 8-K



                  SECURITIES AND EXCHANGE COMMISSION

                        Washington, D.C.  20549



                            CURRENT REPORT



                Pursuant to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934

                    Date of Report:  June, 1998


                      MAINE PUBLIC SERVICE COMPANY            
        (Exact name of registrant as specified in its charter)



            Maine                   1-3429          01-0113635      
(State, or other jurisdiction    (Commission       (IRS Employer
      of incorporation)          File Number)    Identification No.)


209 State Street, Presque Isle, Maine                 04769  
(Address of principal executive offices)            (Zip Code)


Registrant's Telephone Number, Including Area Code   207-768-5811










Current Report, Form 8-K for                            Date of Report
Maine Public Service Company                            June, 1998

Item 5(a) Other Material Events - Restructuring of Purchase Power
          Agreement with Wheelabrator-Sherman Energy Company.

          Reference is made to the Company's Form 10-K for December 31,
          1997 and Form 10-Q for the quarter ended March 31, 1998, where
          the Company's efforts to restructure the Purchase Power
          Agreement with Wheelabrator-Sherman are discussed.

          The Company has a Power Purchase Agreement (PPA) with the
          Wheelabrator-Sherman Energy Company (W-S) under which the
          Company is obligated to purchase the entire output (up to
          126,582 MWH) of a 17.6 MW biomass plant owned by W-S.  The
          current term of the PPA expires on December 31, 2000, but was
          renewable by either party for an additional fifteen years at
          prices to be determined by mutual agreement or, absent mutual
          agreement, by the Maine Public Utilities Commission (MPUC).

          On October 15, 1997, the Company and W-S agreed to amend the
          PPA.  Under the terms of this amendment, W-S agreed to
          reductions in the price of the purchased power of
          approximately $10 million over the PPA's current term in
          exchange for a buydown payment of $8.7 million.  The Company
          and W-S have also agreed to renew the PPA for an additional
          six years at agreed-upon prices.  The Company believes the
          amended PPA will help relieve the financial pressure caused by
          the recent closure of Maine Yankee as well as the need for
          substantial increases in its retail rates, and is therefore in
          the best interests of the Company, its customers and
          shareholders.

          In order to finance the upfront payment to W-S, the Company
          concluded that it must obtain funds from the Finance Authority
          of Maine (FAME); absent FAME financing the Company did not
          believe it could obtain the funds on terms sufficiently
          economic to justify the arrangement with W-S.  Before the
          Company obtained the required financing, the MPUC had to
          approve the amended PPA.  In Docket No. 97-727, the Company
          requested approval of the amended PPA and also asked the MPUC
          for a determination that any so-called stranded costs created
          by the amended PPA will be recoverable from customers to the
          extent permitted by Maine law.  On December 22, 1997, the MPUC
          approved the amended PPA and determined that the upfront
          payment created by the amended PPA will be treated as stranded
          cost.  On February 19, 1998 and May 21, 1998, the FAME Board
          of Directors voted to provide the Company with the financing
          necessary to support the amended PPA.




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Current Report, Form 8-K for                            Date of Report
Maine Public Service Company                            June, 1998

Item 5(a) Other Material Events - Restructuring of Purchase Power
          Agreement with Wheelabrator-Sherman Energy Company - Continued

          On May 29, 1998, FAME issued $11,540,000 of its Taxable
          Electric Rate Stabilization Revenue Notes, Series 1998A (Maine
          Public Service Company) (the Notes) on behalf of the Company. 
          The Notes were issued pursuant to, and are secured under, a
          Trust Indenture by and between FAME and Peoples Heritage Bank,
          Portland, Maine, as Trustee (the Trustee), for the purpose of:
          (i) financing the buydown payment to W-S of approximately $8.7
          million, as required under the amended purchase power
          agreement described above; (ii) for the Capital Reserve Fund,
          as required by FAME under their Electric Rate Stabilization
          Program; and (iii) for issuance costs.  The Notes are limited
          obligations of FAME, payable solely out of the trust estate
          available under the Indenture, principally the Loan Note and
          Loan Agreement with the Company and the Capital Reserve Fund
          held by the Trustee.  The Company has issued $4 million of its
          First Mortgage Bonds and $7.54 million of its Second Mortgage
          Bonds as collateral for its performance under the Loan Note
          issued pursuant to the Loan Agreement.

          The Notes will bear interest at a Floating Interest Rate,
          initially at 5.7% per annum, and will be adjusted weekly.  The
          Company can convert to a Fixed Interest Rate.  As long as the
          Notes bear interest at the Floating Interest Rate, interest is
          payable monthly and, upon conversion to a Fixed Interest Rate,
          interest is payable semiannually.  If the Notes cannot be
          remarketed, the Company's obligation to purchase Notes, while
          bearing interest at a Floating Interest Rate, will be funded
          by Fleet National Bank pursuant to a Standby Note Purchase
          Agreement.  Payment of the regularly scheduled principal
          (including by mandatory sinking fund redemption) and interest
          on the Notes when due will be insured by a municipal bond
          insurance policy issued, concurrently with the Notes, by AMBAC
          Assurance Corporation.  Moody's Investor Service has assigned
          its municipal bond ratings of "Aaa/VMIG-1" to the Notes.

          On May 29, 1998, with the completion of the financing, the
          Company made the buydown payment of $8.7 million to W-S,
          thereby completing all of the conditions required under the
          amended purchase power agreement.  On June 1, 1998, the
          Company purchased an interest rate cap of 7% to limit its
          interest rate exposure, while using the Floating Interest Rate
          option.





                                   -3-
Current Report, Form 8-K for                            Date of Report
Maine Public Service Company                            June, 1998

Item 5(a) Other Material Events - Restructuring of Purchase Power
          Agreement with Wheelabrator-Sherman Energy Company - Continued


                                   MAINE PUBLIC SERVICE COMPANY
                                             Registrant



Dated:  June 3, 1998               /s/  Larry E. LaPlante              
                                   Larry E. LaPlante, Vice President,
                                   Finance, Administration & Treasurer






































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