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: February 25, 1998


                   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
- ---------------------

     As previously reported, New England Electric System (NEES)
subsidiaries have been seeking approval from various state and
federal regulatory agencies for the sale of their nonnuclear
generating business to PG&E Corporation's affiliate, U.S. Gen New
England, Inc. (USGen).  Several parties have objected to the sale
on various grounds, including allegations that following the
sale, USGen would be able to exercise unlawful levels of market
power.  On February 25, 1998, the Federal Energy Regulatory
Commission (FERC) issued an order that rejected the market power
allegations, approved the sale, and conditionally approved most
supporting filings.  While the timing of receipt of final
regulatory approvals is uncertain, receipt of all approvals is
unlikely before mid-1998.  Closing is contingent upon all
regulatory approvals being obtained by February 1999.

                            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/Michael E. Jesanis
                                 
                              By                            
                                 Michael E. Jesanis 
                                 Senior Vice President and 
                                 Chief Financial Officer 

Date: March 3, 1998










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.