content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                                Washington, DC 20549
                                      FORM 10-Q
  
              THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
     INSTRUCTION H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM
                         WITH THE REDUCED DISCLOSURE FORMAT
  
            [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
  
                    For the quarterly period ended June 30, 1999
  
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
                               SECURITIES ACT OF 1934
  
                          Commission file number: 333-58055
  
                            PECO Energy Transition Trust
               (Exact name of registrant as specified in its charter)
  
                   Delaware                                51-0382130
        (State or other jurisdiction of                  (I.R.S. Employer
         incorporation or organization)                 Identification No.)
  
                        c/o First Union Trust Company, N. A.
                         One Rodney Square, 920 King Street
                             Wilmington, Delaware           19801
                 (Address of principal executive offices) (Zip Code)
  
                                   (302) 888-7532
                (Registrant's telephone number, including area code)
  
           Indicate by check mark whether the registrant (1) has filed all reports
           required to be filed by Section 13 or 15(d) of the Securities  Exchange
           Act of 1934 during the preceding 12 months (or for such shorter  period
           that the  registrant  was required to file such  reports),  and (2) has
           been subject to such filing requirements for the past 90 days.
  
                   Yes      X               No
                        ----------               ----------
  <PAGE>
                            PART I. FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  
                            PECO ENERGY TRANSITION TRUST
               STATEMENTS OF NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
                                (Millions of Dollars)
  <TABLE>
  <CAPTION>
                                                                      June 30,      December 31,
                                                                        1999            1998
                                                                  --------------------------------
                                                                           (Unaudited)
  ASSETS
  
  Current Assets:
  <S>                                                               <C>                 <C>
       Cash                                                         $     94.1          $ --
       Current portion of intangible transition property                 139.2            --
                                                                      --------          ----
           Total Current Assets                                          233.3            --
  
  Noncurrent Assets:
       Unamortized Debt Issuance Costs                                    24.2           2.1
       Intangible Transition Property                                  3,919.7            --
                                                                      --------          ----
       TOTAL ASSETS                                                    4,177.2           2.1
                                                                      --------          ----
  
  LIABILITIES
  
  Current Liabilities:
       Due to Related Party, Net                                          70.4           1.9
       Accrued Interest Expense                                           66.5            --
       Accrued Expenses                                                   --             0.2
       Current portion of Transition Bonds                               107.0            --
                                                                      --------          ----
           Total Current Liabilities                                     243.9           2.1
  
  Long-term Debt:
       Transition Bonds                                                3,887.9            --
                                                                      --------          ----
       TOTAL LIABILITIES                                               4,131.8           2.1
                                                                      --------          ----
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITIES                         $     45.4          $ --
                                                                      ========          ====
  </TABLE>
  
  
                         See Notes to Financial Statements.
  
                                         2
  <PAGE>
                            PECO ENERGY TRANSITION TRUST
          STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
                                     (Unaudited)
                                (Millions of Dollars)
  <TABLE>
  <CAPTION>
                                                                 Three Months Ended            Six Months Ended
                                                                      June 30,                     June 30,
                                                                  1999        1998 (a)         1999       1998 (a)
  ADDITIONS
  <S>                                                             <C>           <C>           <C>           <C>
       Contributions by Trust Grantor                             $ -           $ -           $ 20.0        $ -
       ITC Collections                                             74.1           -             74.1          -
       Due From Related Party                                      41.1           -             41.1          -
       Deferred Debt Issuance Costs                                 -             -             23.1          -
       Deferred Discount on Transition Bonds                        -             -              5.4          -
       Intangible Transition Property                               -             -          4,080.2          -
       Other                                                         .3           -               .3          -
                                                              ---------       --------      --------     --------
  
  TOTAL ADDITIONS                                                 115.5           -          4,244.2          -
                                                              ---------       --------      --------     --------
  
  DEDUCTIONS
       Due to Related Party                                          .8           -            109.6          -
       Transition Bonds                                             -             -          4,000.0          -
       Accrued Interest on Transition Bonds                        62.4           -             66.5          -
       Amortization of Debt Issuance Costs                           .8           -               .8          -
       Amortization of Intangible Transition Property              21.3           -             21.3          -
       Amortization of Debt Discount                                -             -               .6          -
                                                              ---------       --------      --------     --------
  
       TOTAL DEDUCTIONS                                            85.3           -          4,198.8          -
                                                              ---------       --------      --------     --------
  
  CHANGES IN NET ASSETS AVAILABLE FOR TRUST ACTIVITIES             30.2           -             45.4          -
                                                              ---------       --------      --------     --------
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITES
  AT BEGINNING OF PERIOD                                           15.2           -              -            -
                                                              ---------       --------      --------     --------
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
  AT END OF PERIOD                                               $ 45.4         $ -           $ 45.4        $ -
                                                              =========       ========      ========     ========
  </TABLE>
  
  (a)  PECO Energy  Transition Trust was formed on June 23, 1998. At inception,  a
       $5,000 contribution was made by the Trust Grantor.
  
  
                         See Notes to Financial Statements.
  
                                         3
  <PAGE>
                            PECO ENERGY TRANSITION TRUST
                            NOTES TO FINANCIAL STATEMENTS
  
  1.  NATURE OF OPERATIONS
           PECO  Energy  Transition  Trust  (PETT),  a  statutory  business  trust
  established  by PECO Energy Company (PECO Energy) under the laws of the State of
  Delaware, was formed on June 23, 1998 pursuant to a trust agreement between PECO
  Energy, as grantor,  First Union Trust Company, N.A., as issuer trustee, and two
  beneficiary  trustees  appointed by PECO  Energy.  PECO Energy  provides  retail
  electric  and  natural  gas  service  to the public in its  traditional  service
  territory  and  retail  electric  generation  service  throughout   Pennsylvania
  pursuant to Pennsylvania's  Customer Choice Program. PECO Energy also engages in
  the wholesale marketing of electricity on a national basis.
  
           PETT was  organized for the special  purpose of  purchasing  and owning
  Intangible  Transition  Property (ITP),  issuing  transition  bonds  (Transition
  Bonds), pledging its interest in ITP and other collateral to the bond trustee to
  secure the Transition  Bonds,  and performing  activities that are necessary and
  suitable to accomplish these purposes.  ITP represents the irrevocable  right of
  PECO  Energy,  or  its  successor  or  assignee,  to  collect  a  non-bypassable
  Intangible  Transition Charge (ITC) from customers  pursuant to a Qualified Rate
  Order (QRO) issued on May 14, 1998 by the Pennsylvania Public Utility Commission
  (PUC) in accordance with the Pennsylvania Electricity Generation Customer Choice
  and Competition Act (Competition  Act) enacted in Pennsylvania in December 1996.
  The QRO  authorizes the ITC to be sufficient to recover up to $4 billion of PECO
  Energy's  stranded  costs and an amount  sufficient  to  recover  the  aggregate
  principal amount of the Transition  Bonds,  plus an amount sufficient to provide
  for any credit enhancement, to fund any reserves and to pay interest, redemption
  premiums,  if any,  servicing fees and other expenses relating to the Transition
  Bonds.
  
           PETT's organizational  documents require it to operate in such a manner
  that it should not be  consolidated  in the bankruptcy  estate of PECO Energy in
  the event PECO Energy becomes subject to such a proceeding, and both PECO Energy
  and  PETT  have  treated  the  transfer  of ITP to  PETT  as a  sale  under  the
  Competition Act. The Transition Bonds are debt obligations of PETT.
  
           For financial  reporting and Federal and  Commonwealth  of Pennsylvania
  income and franchise tax purposes,  the transfer of ITP to PETT has been treated
  as a  financing  arrangement  and not as a sale.  Furthermore,  the  results  of
  operations  of PETT will be  consolidated  with PECO  Energy for  financial  and
  income tax reporting purposes.
  
  2.  SIGNIFICANT ACCOUNTING POLICIES
  Basis of Presentation
           The accompanying  financial  statements as of June 30, 1999 and for the
  three and six months then ended are unaudited,  but include all adjustments that
  PETT considers  necessary for a fair presentation of such financial  statements.
  All adjustments are of a normal,  recurring  nature.  The year-end balance sheet
  data was  derived  from  audited  financial  statements  but do not  include all
  disclosures   required  by  generally  accepted   accounting   principles.   The
  preparation  of financial  statements  in  conformity  with  generally  accepted
  
                                         4
  <PAGE>
  accounting  principles  requires  management to make estimates and  assumptions.
  These  estimates  and  assumptions  affect  the  reported  amount  of  revenues,
  expenses,  assets,  and  liabilities  and  disclosure of  contingencies.  Actual
  results could differ from these estimates.
  
  Cash and Cash Equivalents
           PETT considers all liquid debt instruments purchased with a maturity of
  three months or less to be cash equivalents.
  
  Unamortized Debt Issuance Costs
           The costs  associated  with the issuance of the  Transition  Bonds have
  been capitalized and are being amortized over the life of the Transition Bonds.
  
  Income Taxes
           PETT is a wholly owned subsidiary of PECO Energy and has elected not to
  be taxed as a corporation for federal income tax purposes. PETT is being treated
  as a division of PECO Energy and not as a separate taxable entity.
  
  Derivative Financial Instruments
           Hedge accounting is applied only if the derivative  reduces the risk of
  the underlying hedged item and is designed at inception as a hedge, with respect
  to the hedged item. If a derivative  instrument  ceased to meet the criteria for
  deferral,  any gains or losses,  would be currently  recognized in income.  PETT
  does not hold or issue derivative financial instruments for trading purposes.
  
  3.  TRANSITION BONDS
           On March 25,  1999,  PETT,  an  independent  statutory  business  trust
  organized  under the laws of  Delaware  and a wholly  owned  subsidiary  of PECO
  Energy,  issued $4 billion  aggregate  principal  amount of Transition  Bonds to
  securitize a portion of PECO Energy's  authorized  stranded cost  recovery.  The
  Transition  Bonds are solely  obligations  of PETT,  secured by ITP sold by PECO
  Energy  to PETT  concurrently  with the  issuance  of the  Transition  Bonds and
  certain other collateral related thereto.
  
  
                                         5
  <PAGE>
           The terms of the Transition Bonds are as follows:
  <TABLE>
  <CAPTION>
                         Approximate
                         Face Amount          Bond              Expected                  Final
           Class         (millions)           Rate              Maturity                  Maturity
  <S>                  <C>                   <C>              <C>                       <C>
           A-1           $244.5               5.48%             March 1, 2001             March 1, 2003
           A-2           $275.4               5.63%             March 1, 2003             March 1, 2005
           A-3           $667.0               5.18% (a)         March 1, 2004             March 1, 2006
           A-4           $458.5               5.80%             March 1, 2005             March 1, 2007
           A-5           $464.6               5.26% (a)         September 1, 2007         March 1, 2009
           A-6           $993.4               6.05%             March 1, 2007             March 1, 2009
           A-7           $896.7               6.13%             September 1, 2008         March 1, 2009
  <FN>
           (a) The Class A-3 and A-5 Transition  Bonds earn interest at a floating
           rate.  The rates  provided for each such class above are as of June 30,
           1999.
  </FN>
  </TABLE>
  
           PETT used the proceeds of the Transition Bonds to purchase the ITP from
  PECO Energy. In accordance with the terms of the Competition Act and the May 14,
  1998 QRO, PECO Energy will use the proceeds  principally  to reduce its stranded
  costs and related capitalization.
  
           PETT has  entered  into  interest  rate swaps to manage  interest  rate
  exposure  associated with the issuance of two floating rate series of Transition
  Bonds.  At June 30, 1999, the fair value of these  instruments was $13.9 million
  based on the present value difference between the contracted rate (i.e.,  hedged
  rate) and the market rates at that date.  The fixed interest rates of series A-3
  and A-5 are  6.58%  and  6.94%,  respectively.  A  hypothetical  50 basis  point
  increase or  decrease in the spot yield at June 30, 1999 would have  resulted in
  an aggregate  fair value of these  interest  rate swaps of $24.1 million or $1.4
  million, respectively. If the derivative instruments had been terminated at June
  30, 1999,  these  estimated  fair values  represent the amount to be paid by the
  counterparties to PETT.
  
  4.  SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS
           Under the  Master  Servicing  Agreement  entered  into by PETT and PECO
  Energy dated as of March 25,  1999,  PECO  Energy,  as servicer,  is required to
  manage  and  administer  the ITP sold to PETT  and to  collect  the ITC  related
  thereto on behalf of PETT. PETT will pay an annual  servicing fee based upon the
  outstanding  principal  amount of the  Transition  Bonds.  Upon  closing  of the
  Transition Bond issuance, PETT recorded an intercompany liability to PECO Energy
  in the  amount  of  $110.7  million  consisting  of:  (1)  overcollateralization
  deposits of $60.1 million,  (2) servicing fees of $49.2 million, and (3) trustee
  fees of $1.4  million.  This  liability is reflected on PETT's  Statement of Net
  Assets Available for Trust Activities as Due to Related Party.
  
           Copies of the executed Sale Agreement  between PECO Energy,  as seller,
  and PETT, as purchaser,  the Master Servicing Agreement,  and the Indenture were
  filed with the  Securities  and Exchange  Commission in a Current Report on Form
  8-K dated March 31, 1999.
  
                                         6
  <PAGE>
  5.       LITIGATION
           Indianapolis Power and Light Company (IPL) filed an action which sought
  to  invalidate  the  Competition  Act and  thereby  preclude  PECO  Energy  from
  recovering and  securitizing  stranded costs.  IPL asserted that the Competition
  Act  discriminates  against  interstate  commerce in  violation  of the Commerce
  Clause of the United States Constitution. The Commonwealth Court of Pennsylvania
  dismissed this action.  IPL sought review of this dismissal by the United States
  Supreme  Court.  The IPL petition for certiorari was denied by the United States
  Supreme Court as reported on PECO Energy  Company's  Current  Report on Form 8-K
  dated  March 8, 1999.  All  appeals of the PUC's  Final Order dated May 14, 1998
  that were being pursued have been resolved and all other appeals that were being
  held in abeyance have been withdrawn with prejudice from the Commonwealth  Court
  of Pennsylvania and the United States District Court.
  
  
  
  
  
  
  
  
  
  
  
                                         7
  <PAGE>
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
  
           The  following  analysis  of the  financial  condition  and  results of
  activities of PECO Energy  Transition  Trust (PETT) is in an abbreviated  format
  pursuant  to  Instruction  H of  Form  10-Q.  Such  analysis  should  be read in
  conjunction  with the  Financial  Statements  and Notes to Financial  Statements
  included in Item 1 above, and the Note Issuer's annual Financial  Statements and
  the Notes to Financial  Statements included in its Registration  Statement dated
  March 18, 1999.
  
           PETT  was  formed  under  the  laws  of  Delaware  pursuant  to a trust
  agreement  between PETT,  PECO Energy Company (PECO  Energy),  First Union Trust
  Company,  N.A., acting  thereunder not in its individual  capacity but solely as
  issuer trustee of PETT, and two beneficiary  trustees  appointed by PECO Energy.
  PETT is currently  governed by an amended and restated trust agreement among the
  same parties.
  
           Additions,  primarily  representing  the  recovery of ITC, for both the
  three and six  months  ended  June 30,  1999  were  $117.4  million.  Deductions
  incurred  for the three and six months  ended June 30, 1999 were $87.2 and $91.9
  million,   respectively,   and  included:   $62.9  million  and  $67.6  million,
  respectively,   of  interest  charges   associated  with  the  transition  bonds
  (Transition Bonds) issued on March 25, 1999; amortization charges related to the
  ITC of $21.3 million and servicing fees of $3.0 million.
  
           On March 25,  1999,  PETT issued  $244.5  million  aggregate  principal
  amount of 5.48% Transition Bonds, Class A-1, $275.4 million aggregate  principal
  amount of 5.63% Transition Bonds, Class A-2, $667.0 million aggregate  principal
  amount of LIBOR+0.125%  (5.18% on June 30, 1999)  Transition  Bonds,  Class A-3,
  $458.5 million aggregate  principal amount of 5.80% Transition Bonds, Class A-4,
  $464.6 million  aggregate  principal  amount of LIBOR+0.200%  (5.26% on June 30,
  1999) Transition Bonds, Class A-5, $993.4 million aggregate  principal amount of
  6.05% Transition Bonds, Class A-6, $896.7 million aggregate  principal amount of
  6.13% Transition Bonds, Class A-7.
  
  
           PETT relies on the  computer  systems of PECO Energy in its capacity as
  servicer  under the Master  Servicing  Agreement.  PECO Energy is faced with the
  task of  addressing  the Year 2000 (Y2K)  issue.  The Y2K issue is the result of
  computer  programs being written using two digits rather than four to define the
  applicable  year  and  other   programming   techniques   which  constrain  date
  calculations or assign special  meanings to certain dates.  Any of PECO Energy's
  computer  systems  that have  date-sensitive  software  of  microprocessors  may
  recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
  could  result in a system  failure or  miscalculations  causing  disruptions  of
  operations,  including,  among other  things,  a temporary  inability to measure
  usage,  read  meters,  process  transactions,  send  bills or  operate  electric
  generation  stations.  In  addition,  the Y2K issue could  affect the ability of
  customers to receive bills sent by PECO Energy or make payments on such bills.
  
           PECO  Energy  has  determined  that it will be  required  to  modify or
  replace  significant  portions of its software so that its computer systems will
  properly use dates beyond  December 31,  1999.  PECO Energy  presently  believes
  
  <PAGE>
  
  that, with  modifications to existing  software and conversions to new software,
  the Y2K issue can be mitigated.  However,  if such modifications and conversions
  are not made or are not completed in a timely manner, the Y2K issue could have a
  material  adverse  impact on the  operations  and  financial  condition  of PECO
  Energy.  The costs associated with this potential impact are speculative and not
  presently quantifiable. PECO Energy has not investigated and has no intention of
  investigating  the Y2K issue as it relates to any customer's  ability to receive
  bills sent by PECO Energy or make payments on bills.
  
           For  additional  information  on PECO  Energy's Y2K  project,  see PECO
  Energy's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
  
  
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
  MARKET RISK
  
  Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  
  
  
  
  
  
  
  
  
                                         9
  <PAGE>
                             PART II. OTHER INFORMATION
  
  ITEM 1.  LEGAL PROCEEDINGS
  
           None.
  
  ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 5.  OTHER INFORMATION
  
           None.
  
  ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)      Exhibits:
  
  Exhibit No.       Description
  ---------------   ---------------
  27                 Financial Data Schedule.
  
  (b) Reports on Form 8-K filed during the reporting period:
  
           Report,  dated May 12, 1999, reporting information under "ITEM 5. OTHER
                    EVENTS"  regarding  the  Monthly  Servicer   Certificates  and
                    Monthly Servicer Report for April 1999.
  
  
  
  
  
  
  
  
  
  
                                         10
  <PAGE>
                            PECO ENERGY TRANSITION TRUST
  
  
                                     SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
  
  
  
  
  Date:  August 13, 1999                      By:  /s/ Diana Moy Kelly
                                                   ----------------------------
                                                   Diana Moy Kelly
                                                   Beneficiary Trustee
  
  
  
  
  
  
  
                                         11
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 24883}]
metadata_filer: {"company-data": {"conformed-name": "PECO ENERGY TRANSITION TRUST", "cik": "0001064414", "assigned-sic": "4911", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-58055", "film-number": "99688318"}, "business-address": {"street1": "2301 MARKET ST", "street2": "P O BOX 8699", "city": "PHILADELPHIA", "state": "PA", "zip": "19101", "phone": "2158414000"}, "mail-address": {"street1": "FIRST UNION TRUST CO NA", "street2": "ONE RODNEY SQUARE 920 KING ST 1ST FLOOR", "city": "WILMINGTON", "state": "DE", "zip": "19801"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                                Washington, DC 20549
                                      FORM 10-Q
  
              THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
     INSTRUCTION H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM
                         WITH THE REDUCED DISCLOSURE FORMAT
  
            [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
  
                    For the quarterly period ended June 30, 1999
  
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE
                               SECURITIES ACT OF 1934
  
                          Commission file number: 333-58055
  
                            PECO Energy Transition Trust
               (Exact name of registrant as specified in its charter)
  
                   Delaware                                51-0382130
        (State or other jurisdiction of                  (I.R.S. Employer
         incorporation or organization)                 Identification No.)
  
                        c/o First Union Trust Company, N. A.
                         One Rodney Square, 920 King Street
                             Wilmington, Delaware           19801
                 (Address of principal executive offices) (Zip Code)
  
                                   (302) 888-7532
                (Registrant's telephone number, including area code)
  
           Indicate by check mark whether the registrant (1) has filed all reports
           required to be filed by Section 13 or 15(d) of the Securities  Exchange
           Act of 1934 during the preceding 12 months (or for such shorter  period
           that the  registrant  was required to file such  reports),  and (2) has
           been subject to such filing requirements for the past 90 days.
  
                   Yes      X               No
                        ----------               ----------
  PART I. FINANCIAL INFORMATION
  
  ITEM 1.           FINANCIAL STATEMENTS
  
                            PECO ENERGY TRANSITION TRUST
               STATEMENTS OF NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
                                (Millions of Dollars)
  June 30,      December 31,
                                                                        1999            1998
                                                                  --------------------------------
                                                                           (Unaudited)
  ASSETS
  
  Current Assets:
  Cash                                                         $     94.1          $ --
       Current portion of intangible transition property                 139.2            --
                                                                      --------          ----
           Total Current Assets                                          233.3            --
  
  Noncurrent Assets:
       Unamortized Debt Issuance Costs                                    24.2           2.1
       Intangible Transition Property                                  3,919.7            --
                                                                      --------          ----
       TOTAL ASSETS                                                    4,177.2           2.1
                                                                      --------          ----
  
  LIABILITIES
  
  Current Liabilities:
       Due to Related Party, Net                                          70.4           1.9
       Accrued Interest Expense                                           66.5            --
       Accrued Expenses                                                   --             0.2
       Current portion of Transition Bonds                               107.0            --
                                                                      --------          ----
           Total Current Liabilities                                     243.9           2.1
  
  Long-term Debt:
       Transition Bonds                                                3,887.9            --
                                                                      --------          ----
       TOTAL LIABILITIES                                               4,131.8           2.1
                                                                      --------          ----
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITIES                         $     45.4          $ --
                                                                      ========          ====
  See Notes to Financial Statements.
  
                                         2
  PECO ENERGY TRANSITION TRUST
          STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
                                     (Unaudited)
                                (Millions of Dollars)
  Three Months Ended            Six Months Ended
                                                                      June 30,                     June 30,
                                                                  1999        1998 (a)         1999       1998 (a)
  ADDITIONS
  Contributions by Trust Grantor                             $ -           $ -           $ 20.0        $ -
       ITC Collections                                             74.1           -             74.1          -
       Due From Related Party                                      41.1           -             41.1          -
       Deferred Debt Issuance Costs                                 -             -             23.1          -
       Deferred Discount on Transition Bonds                        -             -              5.4          -
       Intangible Transition Property                               -             -          4,080.2          -
       Other                                                         .3           -               .3          -
                                                              ---------       --------      --------     --------
  
  TOTAL ADDITIONS                                                 115.5           -          4,244.2          -
                                                              ---------       --------      --------     --------
  
  DEDUCTIONS
       Due to Related Party                                          .8           -            109.6          -
       Transition Bonds                                             -             -          4,000.0          -
       Accrued Interest on Transition Bonds                        62.4           -             66.5          -
       Amortization of Debt Issuance Costs                           .8           -               .8          -
       Amortization of Intangible Transition Property              21.3           -             21.3          -
       Amortization of Debt Discount                                -             -               .6          -
                                                              ---------       --------      --------     --------
  
       TOTAL DEDUCTIONS                                            85.3           -          4,198.8          -
                                                              ---------       --------      --------     --------
  
  CHANGES IN NET ASSETS AVAILABLE FOR TRUST ACTIVITIES             30.2           -             45.4          -
                                                              ---------       --------      --------     --------
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITES
  AT BEGINNING OF PERIOD                                           15.2           -              -            -
                                                              ---------       --------      --------     --------
  
  NET ASSETS AVAILABLE FOR TRUST ACTIVITIES
  AT END OF PERIOD                                               $ 45.4         $ -           $ 45.4        $ -
                                                              =========       ========      ========     ========
  (a)  PECO Energy  Transition Trust was formed on June 23, 1998. At inception,  a
       $5,000 contribution was made by the Trust Grantor.
  
                         See Notes to Financial Statements.
  
                                         3
  PECO ENERGY TRANSITION TRUST
                            NOTES TO FINANCIAL STATEMENTS
  
  1.  NATURE OF OPERATIONS
           PECO  Energy  Transition  Trust  (PETT),  a  statutory  business  trust
  established  by PECO Energy Company (PECO Energy) under the laws of the State of
  Delaware, was formed on June 23, 1998 pursuant to a trust agreement between PECO
  Energy, as grantor,  First Union Trust Company, N.A., as issuer trustee, and two
  beneficiary  trustees  appointed by PECO  Energy.  PECO Energy  provides  retail
  electric  and  natural  gas  service  to the public in its  traditional  service
  territory  and  retail  electric  generation  service  throughout   Pennsylvania
  pursuant to Pennsylvania's  Customer Choice Program. PECO Energy also engages in
  the wholesale marketing of electricity on a national basis.
  
           PETT was  organized for the special  purpose of  purchasing  and owning
  Intangible  Transition  Property (ITP),  issuing  transition  bonds  (Transition
  Bonds), pledging its interest in ITP and other collateral to the bond trustee to
  secure the Transition  Bonds,  and performing  activities that are necessary and
  suitable to accomplish these purposes.  ITP represents the irrevocable  right of
  PECO  Energy,  or  its  successor  or  assignee,  to  collect  a  non-bypassable
  Intangible  Transition Charge (ITC) from customers  pursuant to a Qualified Rate
  Order (QRO) issued on May 14, 1998 by the Pennsylvania Public Utility Commission
  (PUC) in accordance with the Pennsylvania Electricity Generation Customer Choice
  and Competition Act (Competition  Act) enacted in Pennsylvania in December 1996.
  The QRO  authorizes the ITC to be sufficient to recover up to $4 billion of PECO
  Energy's  stranded  costs and an amount  sufficient  to  recover  the  aggregate
  principal amount of the Transition  Bonds,  plus an amount sufficient to provide
  for any credit enhancement, to fund any reserves and to pay interest, redemption
  premiums,  if any,  servicing fees and other expenses relating to the Transition
  Bonds.
  
           PETT's organizational  documents require it to operate in such a manner
  that it should not be  consolidated  in the bankruptcy  estate of PECO Energy in
  the event PECO Energy becomes subject to such a proceeding, and both PECO Energy
  and  PETT  have  treated  the  transfer  of ITP to  PETT  as a  sale  under  the
  Competition Act. The Transition Bonds are debt obligations of PETT.
  
           For financial  reporting and Federal and  Commonwealth  of Pennsylvania
  income and franchise tax purposes,  the transfer of ITP to PETT has been treated
  as a  financing  arrangement  and not as a sale.  Furthermore,  the  results  of
  operations  of PETT will be  consolidated  with PECO  Energy for  financial  and
  income tax reporting purposes.
  
  2.  SIGNIFICANT ACCOUNTING POLICIES
  Basis of Presentation
           The accompanying  financial  statements as of June 30, 1999 and for the
  three and six months then ended are unaudited,  but include all adjustments that
  PETT considers  necessary for a fair presentation of such financial  statements.
  All adjustments are of a normal,  recurring  nature.  The year-end balance sheet
  data was  derived  from  audited  financial  statements  but do not  include all
  disclosures   required  by  generally  accepted   accounting   principles.   The
  preparation  of financial  statements  in  conformity  with  generally  accepted
  
                                         4
  accounting  principles  requires  management to make estimates and  assumptions.
  These  estimates  and  assumptions  affect  the  reported  amount  of  revenues,
  expenses,  assets,  and  liabilities  and  disclosure of  contingencies.  Actual
  results could differ from these estimates.
  
  Cash and Cash Equivalents
           PETT considers all liquid debt instruments purchased with a maturity of
  three months or less to be cash equivalents.
  
  Unamortized Debt Issuance Costs
           The costs  associated  with the issuance of the  Transition  Bonds have
  been capitalized and are being amortized over the life of the Transition Bonds.
  
  Income Taxes
           PETT is a wholly owned subsidiary of PECO Energy and has elected not to
  be taxed as a corporation for federal income tax purposes. PETT is being treated
  as a division of PECO Energy and not as a separate taxable entity.
  
  Derivative Financial Instruments
           Hedge accounting is applied only if the derivative  reduces the risk of
  the underlying hedged item and is designed at inception as a hedge, with respect
  to the hedged item. If a derivative  instrument  ceased to meet the criteria for
  deferral,  any gains or losses,  would be currently  recognized in income.  PETT
  does not hold or issue derivative financial instruments for trading purposes.
  
  3.  TRANSITION BONDS
           On March 25,  1999,  PETT,  an  independent  statutory  business  trust
  organized  under the laws of  Delaware  and a wholly  owned  subsidiary  of PECO
  Energy,  issued $4 billion  aggregate  principal  amount of Transition  Bonds to
  securitize a portion of PECO Energy's  authorized  stranded cost  recovery.  The
  Transition  Bonds are solely  obligations  of PETT,  secured by ITP sold by PECO
  Energy  to PETT  concurrently  with the  issuance  of the  Transition  Bonds and
  certain other collateral related thereto.
  
                                         5
  The terms of the Transition Bonds are as follows:
  Approximate
                         Face Amount          Bond              Expected                  Final
           Class         (millions)           Rate              Maturity                  Maturity
  A-1           $244.5               5.48%             March 1, 2001             March 1, 2003
           A-2           $275.4               5.63%             March 1, 2003             March 1, 2005
           A-3           $667.0               5.18% (a)         March 1, 2004             March 1, 2006
           A-4           $458.5               5.80%             March 1, 2005             March 1, 2007
           A-5           $464.6               5.26% (a)         September 1, 2007         March 1, 2009
           A-6           $993.4               6.05%             March 1, 2007             March 1, 2009
           A-7           $896.7               6.13%             September 1, 2008         March 1, 2009
  (a) The Class A-3 and A-5 Transition  Bonds earn interest at a floating
           rate.  The rates  provided for each such class above are as of June 30,
           1999.
  PETT used the proceeds of the Transition Bonds to purchase the ITP from
  PECO Energy. In accordance with the terms of the Competition Act and the May 14,
  1998 QRO, PECO Energy will use the proceeds  principally  to reduce its stranded
  costs and related capitalization.
  
           PETT has  entered  into  interest  rate swaps to manage  interest  rate
  exposure  associated with the issuance of two floating rate series of Transition
  Bonds.  At June 30, 1999, the fair value of these  instruments was $13.9 million
  based on the present value difference between the contracted rate (i.e.,  hedged
  rate) and the market rates at that date.  The fixed interest rates of series A-3
  and A-5 are  6.58%  and  6.94%,  respectively.  A  hypothetical  50 basis  point
  increase or  decrease in the spot yield at June 30, 1999 would have  resulted in
  an aggregate  fair value of these  interest  rate swaps of $24.1 million or $1.4
  million, respectively. If the derivative instruments had been terminated at June
  30, 1999,  these  estimated  fair values  represent the amount to be paid by the
  counterparties to PETT.
  
  4.  SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS
           Under the  Master  Servicing  Agreement  entered  into by PETT and PECO
  Energy dated as of March 25,  1999,  PECO  Energy,  as servicer,  is required to
  manage  and  administer  the ITP sold to PETT  and to  collect  the ITC  related
  thereto on behalf of PETT. PETT will pay an annual  servicing fee based upon the
  outstanding  principal  amount of the  Transition  Bonds.  Upon  closing  of the
  Transition Bond issuance, PETT recorded an intercompany liability to PECO Energy
  in the  amount  of  $110.7  million  consisting  of:  (1)  overcollateralization
  deposits of $60.1 million,  (2) servicing fees of $49.2 million, and (3) trustee
  fees of $1.4  million.  This  liability is reflected on PETT's  Statement of Net
  Assets Available for Trust Activities as Due to Related Party.
  
           Copies of the executed Sale Agreement  between PECO Energy,  as seller,
  and PETT, as purchaser,  the Master Servicing Agreement,  and the Indenture were
  filed with the  Securities  and Exchange  Commission in a Current Report on Form
  8-K dated March 31, 1999.
  
                                         6
  5.       LITIGATION
           Indianapolis Power and Light Company (IPL) filed an action which sought
  to  invalidate  the  Competition  Act and  thereby  preclude  PECO  Energy  from
  recovering and  securitizing  stranded costs.  IPL asserted that the Competition
  Act  discriminates  against  interstate  commerce in  violation  of the Commerce
  Clause of the United States Constitution. The Commonwealth Court of Pennsylvania
  dismissed this action.  IPL sought review of this dismissal by the United States
  Supreme  Court.  The IPL petition for certiorari was denied by the United States
  Supreme Court as reported on PECO Energy  Company's  Current  Report on Form 8-K
  dated  March 8, 1999.  All  appeals of the PUC's  Final Order dated May 14, 1998
  that were being pursued have been resolved and all other appeals that were being
  held in abeyance have been withdrawn with prejudice from the Commonwealth  Court
  of Pennsylvania and the United States District Court.
  
                                         7
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS
  
           The  following  analysis  of the  financial  condition  and  results of
  activities of PECO Energy  Transition  Trust (PETT) is in an abbreviated  format
  pursuant  to  Instruction  H of  Form  10-Q.  Such  analysis  should  be read in
  conjunction  with the  Financial  Statements  and Notes to Financial  Statements
  included in Item 1 above, and the Note Issuer's annual Financial  Statements and
  the Notes to Financial  Statements included in its Registration  Statement dated
  March 18, 1999.
  
           PETT  was  formed  under  the  laws  of  Delaware  pursuant  to a trust
  agreement  between PETT,  PECO Energy Company (PECO  Energy),  First Union Trust
  Company,  N.A., acting  thereunder not in its individual  capacity but solely as
  issuer trustee of PETT, and two beneficiary  trustees  appointed by PECO Energy.
  PETT is currently  governed by an amended and restated trust agreement among the
  same parties.
  
           Additions,  primarily  representing  the  recovery of ITC, for both the
  three and six  months  ended  June 30,  1999  were  $117.4  million.  Deductions
  incurred  for the three and six months  ended June 30, 1999 were $87.2 and $91.9
  million,   respectively,   and  included:   $62.9  million  and  $67.6  million,
  respectively,   of  interest  charges   associated  with  the  transition  bonds
  (Transition Bonds) issued on March 25, 1999; amortization charges related to the
  ITC of $21.3 million and servicing fees of $3.0 million.
  
           On March 25,  1999,  PETT issued  $244.5  million  aggregate  principal
  amount of 5.48% Transition Bonds, Class A-1, $275.4 million aggregate  principal
  amount of 5.63% Transition Bonds, Class A-2, $667.0 million aggregate  principal
  amount of LIBOR+0.125%  (5.18% on June 30, 1999)  Transition  Bonds,  Class A-3,
  $458.5 million aggregate  principal amount of 5.80% Transition Bonds, Class A-4,
  $464.6 million  aggregate  principal  amount of LIBOR+0.200%  (5.26% on June 30,
  1999) Transition Bonds, Class A-5, $993.4 million aggregate  principal amount of
  6.05% Transition Bonds, Class A-6, $896.7 million aggregate  principal amount of
  6.13% Transition Bonds, Class A-7.
  
           PETT relies on the  computer  systems of PECO Energy in its capacity as
  servicer  under the Master  Servicing  Agreement.  PECO Energy is faced with the
  task of  addressing  the Year 2000 (Y2K)  issue.  The Y2K issue is the result of
  computer  programs being written using two digits rather than four to define the
  applicable  year  and  other   programming   techniques   which  constrain  date
  calculations or assign special  meanings to certain dates.  Any of PECO Energy's
  computer  systems  that have  date-sensitive  software  of  microprocessors  may
  recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
  could  result in a system  failure or  miscalculations  causing  disruptions  of
  operations,  including,  among other  things,  a temporary  inability to measure
  usage,  read  meters,  process  transactions,  send  bills or  operate  electric
  generation  stations.  In  addition,  the Y2K issue could  affect the ability of
  customers to receive bills sent by PECO Energy or make payments on such bills.
  
           PECO  Energy  has  determined  that it will be  required  to  modify or
  replace  significant  portions of its software so that its computer systems will
  properly use dates beyond  December 31,  1999.  PECO Energy  presently  believes
  that, with  modifications to existing  software and conversions to new software,
  the Y2K issue can be mitigated.  However,  if such modifications and conversions
  are not made or are not completed in a timely manner, the Y2K issue could have a
  material  adverse  impact on the  operations  and  financial  condition  of PECO
  Energy.  The costs associated with this potential impact are speculative and not
  presently quantifiable. PECO Energy has not investigated and has no intention of
  investigating  the Y2K issue as it relates to any customer's  ability to receive
  bills sent by PECO Energy or make payments on bills.
  
           For  additional  information  on PECO  Energy's Y2K  project,  see PECO
  Energy's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
  
  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
  MARKET RISK
  
  Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
                                         9
  PART II. OTHER INFORMATION
  
  ITEM 1.  LEGAL PROCEEDINGS
  
           None.
  
  ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
           Omitted with respect to PETT pursuant to Instruction H of Form 10-Q.
  
  ITEM 5.  OTHER INFORMATION
  
           None.
  
  ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
  
  (a)      Exhibits:
  
  Exhibit No.       Description
  ---------------   ---------------
  27                 Financial Data Schedule.
  
  (b) Reports on Form 8-K filed during the reporting period:
  
           Report,  dated May 12, 1999, reporting information under "ITEM 5. OTHER
                    EVENTS"  regarding  the  Monthly  Servicer   Certificates  and
                    Monthly Servicer Report for April 1999.
  
                                         10
  PECO ENERGY TRANSITION TRUST
  
                                     SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned thereunto duly authorized.
  
  Date:  August 13, 1999                      By:  /s/ Diana Moy Kelly
                                                   ----------------------------
                                                   Diana Moy Kelly
                                                   Beneficiary Trustee
  
                                         11