SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549


                             FORM 8-K

                          CURRENT REPORT


                  Pursuant to Section 13 of the
                 Securities Exchange Act of 1934


       Date of Earliest Event Reported: September 18, 1996


                   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.)
incorporation)

       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
_____________________

     New England Electric System (NEES) and Eastern Enterprises
(Eastern) announced the formation of a joint venture on September
18, 1996.  The joint venture will engage in energy marketing
services under the name, AllEnergy Marketing Company, L.L.C.
(AllEnergy).  AllEnergy will market energy commodities, including
electricity, natural gas, oil and other energy sources as well as
options, futures and related contracts and products and services
related to energy, primarily in the New England and New York
markets.  Initially, NEES Energy, Inc., a subsidiary of NEES and
AllEnergy Marketing Company, Inc., a subsidiary of Eastern, will
each have a 50% interest in AllEnergy.  NEES would initially fund
NEES Energy Inc.'s  investment in AllEnergy in an amount up to
$50 million over five years, subject to obtaining Securities and
Exchange Commission approval.


                            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


Date: September 19, 1996










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.