SC 13E4/A

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            AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
                                APRIL 17, 1996

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                               SCHEDULE 13E-4/A
                         ISSUER TENDER OFFER STATEMENT
     (PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
                               (Amendment No. 2)

                                PG ENERGY INC.
                 (Name Of Issuer And Person Filing Statement)

                       DEPOSITARY PREFERRED SHARES, EACH
                   REPRESENTING A 1/4 INTEREST IN A SHARE OF
          9% CUMULATIVE PREFERRED STOCK, PAR VALUE $100.00 PER SHARE
                        (Title of Class of Securities)

                                   708747407
                     (CUSIP Number of Class of Securities)

                                THOMAS J. WARD
                                   SECRETARY
                                PG ENERGY INC.
                              WILKES-BARRE CENTER
                               39 PUBLIC SQUARE
                       WILKES-BARRE, PENNSYLVANIA  18711
                                (717) 829-8843
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
         Communications on Behalf of the Person Filing the Statement)

                                   COPY TO:
                               GARETT J. ALBERT
                             HUGHES HUBBARD & REED
                            ONE BATTERY PARK PLAZA
                        NEW YORK, NEW YORK  10004-1482
                                (212) 837-6000

                                MARCH 11, 1996
    (Date Tender Offer First Published, Sent Or Given To Security Holders)






Calculation of Filing Fee
- -------------------------------------------------------------------------------
    Transaction Valuation*                   Amount of Filing Fee
                                                 
         $27,000,000                                $5,400
- -------------------------------------------------------------------------------


*    Determined pursuant to Rule 0-11(b)(1).  Assumes the purchase of 1,000,000
     shares at $27.00 per share.

[X]  Check box if any part of the fee is offset as provided by  Rule 0-11(a)(2)
     and identify the filing with which the offsetting fee was previously paid.
     Identify the previous filing by registration statement number, or the Form
     or Schedule and the date of its filing.

Amount Previously Paid:  $5,400
Form or Registration No.:  Schedule 13E-4
Filing Party:  PG Energy Inc.
Date Filed:  March 11, 1996
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        This  Amendment  No.  2  amends  and  supplements the Rule 13e-4 Issuer
Tender Offer Statement on Schedule 13E-4,  dated March 11, 1996, as amended  by
Amendment No. 1 thereto, dated April 9, 1996 (as so amended, the "Schedule 13E-
4"), filed  by PG  Energy Inc.,  a Pennsylvania  corporation formerly  known as
Pennsylvania  Gas  and  Water  Company  (the  "Company") in connection with the
Company's offer to purchase any and all of its outstanding Depositary Preferred
Shares (the "Shares"),  each representing a  one-fourth interest in  a share of
its 9%  Cumulative Preferred  Stock, par  value $100.00  per share, liquidation
preference $100.00 per  share (equivalent to  $25.00 per Share),  at $27.00 per
Share, net to the seller in cash, upon the terms and subject to the  conditions
set  forth  in  the  Offer  to  Purchase,  dated  March 11, 1996 (the "Offer to
Purchase"), and  the related  Letter of  Transmittal (which,  together with the
Offer to Purchase,  constitutes the "Offer"),  copies of which  were previously
filed as Exhibits  (a)(1) and (a)(2)  to the Schedule  13E-4, respectively, and
incorporated by reference therein.  Terms defined in the Schedule 13E-4 and not
separately defined  herein shall  have the  meanings specified  in the Schedule
13E-4.

        The following information amends the information previously included in
the Schedule 13E-4.   This Amendment No. 2  to Schedule 13E-4 also  constitutes
the final amendment  to the Schedule  13E-4 pursuant to  Rule 13e-4(c)(3) under
the Securities Exchange Act of 1934, as amended.


ITEM 8.   ADDITIONAL INFORMATION.

        Item  8  is  hereby  supplemented  and  amended by adding the following
information thereto:

        The Offer expired at 5:00 p.m.,  New York City time, on April  9, 1996.
Pursuant to the Offer, the Company acquired 512,936 Shares at a purchase  price
of $27.00 per  Share.  As  stated in Section  1 of the  Offer to Purchase,  the
Company may, in its sole discretion, subsequent to April 23, 1996 (ten business
days after the expiration of the Offer), determine to purchase any  outstanding
Shares  through  open  market  purchases,  privately negotiated transactions or
otherwise, on such terms and at  such prices as the Company may  determine from
time to time.

        A copy of the Company's press release dated April 10, 1996,  announcing
the preliminary results of the Offer is attached hereto as Exhibit (a)(10).


ITEM 9.   MATERIALS TO BE FILED AS EXHIBITS.




       
(a)(10)   Form of Press Release issued by the Company, dated April 10, 1996.





                                   SIGNATURE


        After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.


                              PG Energy Inc.


                              By:  /s/ John F. Kell, Jr.
                                -----------------------------------------
                                Name:  John F. Kell, Jr.
                                Title: Vice President, Financial Services

Dated:  April 17, 1996






                               INDEX TO EXHIBITS


EXHIBIT
NUMBER                            DESCRIPTION
- -------                           -----------

       
(a)(10)   Form of Press Release issued by the Company, dated April 10, 1996.

EX-99.A10

FROM:     ROBERT J. LOPATTO
RELEASE:  UPON RECEIPT
PHONE:    717-829-8814

                              PG ENERGY COMPLETES
                              SELF TENDER OFFERS

        WILKES-BARRE, PA, April 10, 1996 -- PG Energy Inc.  ("PGE"),  announced
today that its self tender offers for its Depositary Preferred Shares  (Trading
Symbol:  PGWCZ) and 4.10%  Cumulative Preferred Stock (Trading Symbol:   PGWCP)
expired at 5:00 p.m., New York City time, on Tuesday, April 9, 1996.

        Based on a preliminary count at  the time of expiration, PGE said  that
it  expects  to  purchase  approximately  515,000  Depositary  Preferred Shares
(approximately  4,000  of  which  were  delivered  pursuant  to  the guaranteed
delivery procedure), at  a price of  $27.00 per share  and approximately 18,700
shares of its 4.10% Cumulative Preferred Stock (approximately 150 of which were
delivered pursuant to the guaranteed delivery procedure), at a price of  $50.00
per share.

        PGE said that the  determination of the actual  number of shares to  be
purchased is  subject to  final confirmation  of proper  delivery of all shares
tendered and not withdrawn.  Payment for the shares accepted, and return of all
other shares tendered but not accepted, will occur as promptly as  practicable,
according to PGE.

        PGE  provides  natural  gas  to  approximately 142,000 customers in ten
counties in northeastern Pennsylvania.