NEW ENGLAND ELECTRIC SYSTEM
35-CERT, 1997-08-15
ELECTRIC SERVICES
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<PAGE>
         File No. 70-8803
   
   
   
                 CERTIFICATE OF NOTIFICATION
                               
                         (Rule 24)
   
             SECURITIES AND EXCHANGE COMMISSION
   
                             BY
   
                      NEES Energy, Inc.
                              
                              
                               
   
         In accordance with the order of the Securities and Exchange
   Commission dated May 23, 1996, the following is a report for the
   second quarter of 1997:
   
   
    1. NEES Energy, Inc. (NEES Energy), a Massachusetts
          Corporation,was formed on June 14, 1996.  The corporation was
          capitalized on August 9, 1996 when one thousand shares of NEES
          Energy common stock were issued and sold to New England
          Electric System (NEES).
   
   
    2. As of June 30, 1997 NEES had purchased 1,000 shares of NEES
          Energy common stock and made subordinated loans totaling
          $8,530,000 to NEES Energy.
   
   
    3. As of June 30, 1997 NEES Energy had no permanent personnel and
          during the second quarter of 1997 there were no individuals
          assigned on a substantially full-time basis.
   
   
    4. During the second quarter of 1997 NEES Energy had no kilowatt
          hours sold or marketed.
   
   
    5. In December 1996, following SEC approval of a joint venture
          with a subsidiary of Eastern Enterprises (HCAR No. 35-26633),
          NEES Energy invested in AllEnergy Marketing Company,
          L.L.C.(AllEnergy), a limited liability corporation. AllEnergy
          is engaged in the business of marketing and selling energy
          commodities and energy related services.  NEES Energy will
          invest, from time to time amounts not to exceed fifty million
          dollars in AllEnergy.   The investment during the second
          quarter of 1997 was $255,000.
   
    6. Attached in Exhibits A through C are a balance sheet as of June
          30, 1997, income statements and statements of cash flow for the
          quarter and twelve months ended June 30, 1997.
      <PAGE>
   
    Pursuant to the requirements of the Public Utility Holding Company
   Act of 1935, the undersigned company has duly caused this certificate
   of notification (Commission's File No. 70-8803) to be signed on its
   behalf by the undersigned officer thereunto duly authorized.
   
   
   
   
                                  By:  s/John G. Cochrane
                                     ___________________________
                                      John G. Cochrane
                                      Treasurer
   
   
   Date: August 15, 1997
   
   

      <PAGE>
                          EXHIBIT INDEX



Exhibit No.         Description                        Page
- -----------         -----------                        ----

   A         Balance Sheet at June 30, 1997           Filed
             (Unaudited, subject to adjustment)       herewith

   B1        Statement of Income and Accumulated Deficit   Filed
             For the Quarter ended June 30, 1997      herewith
             (Unaudited, Subject to Adjustment)

   C1        Statement of Cash Flows                  Filed
             For the Quarter Ended June 30, 1997      herewith
             (Unaudited, Subject to Adjustment)

   
   B2        Statement of Income and Accumulated Deficit   Filed
             For the Twelve Months ended June 30, 1997     herewith
             (Unaudited, Subject to Adjustment)

   C2        Statement of Cash Flows                  Filed
             For the Twelve Months June 30, 1997      herewith
             (Unaudited, Subject to Adjustment)








<PAGE>
                                             Exhibit A

NEES Energy, Inc.
Balance Sheet (Thousands of Dollars)
As of June 30, 1997
(Unaudited, Subject to Adjustment)


ASSETS
- ------

  Equity investment in AllEnergy 
     Marketing Co., L.L.C.                                 $4,279

  Current assets:
     Cash                                                      28
     Prepaid taxes                                            726
                                                           ------
  Total current assets                                        754
                                                           ------

  Total assets                                             $5,033
                                                           ======


LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------

Current liabilities:
  Accounts payable                                        $    18
  Accounts payable to associated companies                      4

Parent Company's Investment:
  Common stock, par value $1 per share                          1
  Subordinated notes payable to parent                      8,530
  Accumulated deficit                                      (3,520)
                                                           ------
                                                            5,011
                                                           ------

Total liabilities and parent company's investment          $5,033
                                                           ======



<PAGE>
                                             Exhibit B1


NEES ENERGY, INC.
Statement of Income and Accumulated Deficit (Thousands of Dollars)
For the Quarter Ended June 30, 1997
(Unaudited, Subject to Adjustment)


INCOME

  Equity in income/(loss) of AllEnergy 
    Marketing Co., L.L.C.                            $(1,745)
                                                     =======


EXPENSES

  Other operating expenses                                44
  Income tax                                            (626)
                                                     -------
  Total operating expenses                              (582)
                                                     -------

Net income/(loss)                                     (1,163)

Accumulated deficit at beginning of period            (2,357)
                                                     -------
Accumulated deficit at end of period                 $(3,520)
                                                     =======





<PAGE>
                                             Exhibit C1

NEES Energy, Inc.
Statement of Cash Flows (Thousands of Dollars)
For the Quarter Ended June 30, 1997
(Unaudited, Subject to Adjustment)


Operating activities:
  Net income/(loss)                                     $  (1,163)
  Adjustments to reconcile net income/(loss) to
  net cash provided by operating activities:

     Increase in undistributed income/(loss) in
       subsidiary                                           1,745
     Increase in prepaid taxes                                (26)
     Decrease in accounts payable                             (71)
                                                           ------
Net cash provided in operating activities                     485
                                                           ------


Investing activities:
  Investment in AllEnergy Marketing Co.,L.L.C.             (2,000)
                                                          -------
Net cash used in investing activities                      (2,000)
                                                          -------


Financing activities:
  Subordinated notes payable to parent-issues               1,475
                                                          -------
Net cash provided by financing activities                   1,475
                                                          -------


Net decrease in cash and cash equivalents                     (40)
                                                                 
Cash and cash equivalents at beginning of period               68
                                                          -------

Cash and cash equivalents at end of period                $    28
                                                          =======





<PAGE>
                                                       Exhibit B2

NEES ENERGY, INC.
Statement of Income and Accumulated Deficit (Thousands of Dollars)
For the Twelve Months Ended June 30, 1997
(Unaudited, Subject to Adjustment)



INCOME                                  

  
  Equity in income/(loss) of AllEnergy 
         Marketing Co., L.L.C.                            $(4,471)
                                                          =======
     
EXPENSES                                
  Other operating expenses                                  1,149
  Income tax                                               (2,100)
                                                          -------
                                                             (951)
                                                          -------

Net income/(loss)                                          (3,520)

Retained earnings at beginning of period                             0
                                                          -------

Accumulated deficit at end of period                      $(3,520)
                                                          =======




<PAGE>
                                                       Exhibit C2

NEES Energy, INC.
Statement of Cash Flows (Thousands of Dollars)
For the Twelve Months Ended June 30, 1997
(Unaudited, Subject to Adjustment)


Operating activities:
  Net income/(loss)                                       ($3,520)

  Adjustments to reconcile net income/(loss) to
  net cash provided by operating activities:

     Increase in undistributed income/(loss) in
       subsidiary                                           4,471
     Increase in prepaid taxes                               (726)
     Increase in accounts payable                              22
                                                          -------
Net cash used in operating activities                        (247)
                                                          -------


Investing activities:
  Investment in AllEnergy Marketing Co.,L.L.C.             (8,750)
                                                          -------
Net cash used in investing activities                      (8,750)
                                                          -------


Financing Activities:
  Issue of common stock                                         1
  Subordinated notes payable to parent-issues               8,530
                                                          -------
Net cash provided by financing activities                   8,531
                                                          -------


Net increase in cash and cash equivalents                      28


Cash and cash equivalents at beginning of period                0
                                                          -------
Cash and cash equivalents at end of period                $    28
                                                          =======





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