SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C. 20549



                            FORM 8-K

                         CURRENT REPORT


                  Pursuant to Section 13 of the
                 Securities Exchange Act of 1934


         Date of Earliest Event Reported:  July 3, 1995


                   NEW ENGLAND ELECTRIC SYSTEM

       (exact name of registrant as specified in charter)






Massachusetts            1-3446              04-1663060
(state or other          (Commission         (I.R.S. Employer
jurisdiction of          File No.)           Identification No.)
organization)


       25 Research Drive, Westborough, Massachusetts 01582

            (Address of principal executive offices)

                         (508) 389-2000
      (Registrant's telephone number, including area code)

Item 5.  Other Events
- ---------------------

     As previously reported in the New England Electric System
(NEES) 1994 Annual Report, the three states served by retail
subsidiaries of NEES (the NEES Companies) have been considering
various proposals for allowing electric customers greater choice
over their electricity supplier.  The Massachusetts Department of
Public Utilities (MDPU) has been holding hearings on the
regulation and structure of the electric utility industry.  The
Rhode Island Public Utilities Commission (RIPUC) convened a task
force of utilities, commercial and industrial customers, and
other interested parties to prepare a report on restructuring the
industry.  In these two proceedings, Massachusetts Electric
Company and The Narragansett Electric Company (Narragansett
Electric), the NEES Companies operating in Massachusetts and
Rhode Island respectively,  have filed with the respective
commissions a set of interdependent principles for industry
restructuring.  These principles, which were agreed to by groups
representing environmental, non-utility generation, utilities,
and large and small customer interests, include provisions for
increased customer choice while allowing utilities to recover the
cost of their past commitments, as well as provisions for
protecting residential customers, encouraging renewable resources
and energy conservation, and honoring contracts with independent
power producers.  The parties agreeing to the principles
suggested to the MDPU and RIPUC that the parties be permitted a
six month period for discussions and negotiations on a more
detailed plan.  The MDPU and RIPUC are expected to issue separate
decisions this summer.

     On July 3, 1995, the Governor of Rhode Island vetoed two
bills designed to provide certain customers in industrial parks
with the right to buy power in the open market, rather than
through the local electric utility.  The vetoes are subject to
override by the Rhode Island Legislature.  Because Narragansett
Electric believed that the proposed legislation would result in
piecemeal deregulation that would not be fair to customers or
shareholders and would circumvent the comprehensive proceedings
mentioned above,  Narragansett Electric urged the Governor to
exercise his veto.  Narragansett Electric committed that, if the
measures were not enacted into law, Narragansett Electric would
provide a two year rate credit to manufacturing customers at an
expected cost to Narragansett Electric shareholders of
approximately $2 million per year.  (Narragansett Electric's
current rate filing proposed a $3 million discount for
manufacturers, but was conditioned on manufacturers signing
service extension discount agreements and would have been
recoverable from other customers.)  In addition, Narragansett
Electric committed to submit, by July 1, 1996, a specific and
detailed proposal to the RIPUC addressing the issues associated
with providing open access to Narragansett Electric's
distribution system for its large commercial and industrial

customers.  Among other things, that filing would address the
proper means for recovering past costs incurred to serve exiting
customers through a compensatory access charge.  If the charges
are approved by the RIPUC, the appropriate access tariffs would
then be filed with the Federal Energy Regulatory Commission.

     Also, as previously reported, the New Hampshire Public
Utilities Commission (NHPUC) is considering the proposal of a new
company (Freedom Electric Company) to sell electricity at retail
to large customers of another utility and the New Hampshire
Legislature has been considering several bills concerning
electric industry restructuring and competition.  On June 6,
1995, the NHPUC issued an order in the Freedom Electric docket
addressing preliminary issues.   The NHPUC found, in a split
decision, that it does not believe franchise territories in New
Hampshire are exclusive as a matter of law.  The order also
stated that it did not believe federal law precluded the NHPUC
from authorizing retail wheeling.  However, the order makes clear
that Freedom Electric must obtain additional regulatory approvals
at the state and federal level before it could operate as a
public utility in the franchise territory of another utility. 
Granite State Electric Company, the NEES Company serving New
Hampshire customers, has intervened in the proceeding.  Granite
State is filing a motion for rehearing on these matters.

     In addition, legislation effective January 1, 1996 was
signed into law in June 1995 in New Hampshire which instructs the
NHPUC to establish a retail competition pilot program open to all
classes of customers.  The NHPUC will first have to determine
that the pilot program would be fair, lawful, and in the public
good.  The legislation also establishes a legislative committee
on retail wheeling and restructuring.  The committee is to report
its findings by November 1, 1995.


                            SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Current Report on
Form 8-K to be signed on its behalf by the undersigned thereunto
duly authorized.


                         NEW ENGLAND ELECTRIC SYSTEM


                             s/Alfred D. Houston
                         By _________________________
                            Alfred D. Houston,
                            Executive Vice President
                            and Chief Financial Officer



July 5, 1995

The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of the
Commonwealth of Massachusetts.  Any agreement, obligation, or
liability made, entered into or incurred by or on behalf of New
England Electric System binds only its trust estate, and no
shareholder, director, trustee, officer or agent thereof assumes
or shall be held to any liability therefor.