FORM 10-Q

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended................................September 30, 2001
                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from......................to..........................
Commission file number...................................................0-30512

                              CH ENERGY GROUP, INC.
             -------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           NEW YORK                                               14-1804460
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

284 SOUTH AVENUE, POUGHKEEPSIE  NEW YORK                           12601-4879
--------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code (845) 452-2000
                                                   --------------

    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  [  ]

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

    Common stock, par value $.10 per share; and the number of shares outstanding
of Registrant's common stock, as of September 30, 2001, was 16,362,087.


<PAGE>



                              CH ENERGY GROUP, INC.

               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2001

                                      INDEX

         PART I - FINANCIAL INFORMATION                                  PAGE
                                                                         ----
Item 1 -    Consolidated Financial Statements                              1

            Consolidated Statement of Income -
             Three Months Ended September 30, 2001 and 2000                1

            Consolidated Statement of Income -
             Nine Months Ended September 30, 2001 and 2000                 2

            Consolidated Statement of Comprehensive Income
             Nine Months Ended September 30, 2001 and 2000                 3

            Consolidated Statement of Comprehensive Income
             Nine Months Ended September 30, 2001 and 2000                 4

            Consolidated Balance Sheet - September 30, 2001
             and December 31, 2000                                         5

            Consolidated Statement of Cash Flows -
             Nine Months Ended September 30, 2001 and 2000                 7

            Notes to Consolidated Financial Statements                     8

Item 2 -    Management's Discussion and Analysis of
            Financial Condition and Results of Operations                 18

Item 3 -    Quantitative and Qualitative Disclosure
             about Market Risk                                            26

         PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                                26

Item 6 - Exhibits and Reports on Form 8-K                                 27

Signatures                                                                27

Exhibit Index


<PAGE>


                         PART I - FINANCIAL INFORMATION

                   ITEM I - CONSOLIDATED FINANCIAL STATEMENTS

                              CH ENERGY GROUP, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              For the 3 Months Ended September 30,
                                                                  2001                  2000
                                                                --------              --------
                                                                  (Thousands of Dollars)
<S>                                                             <C>                   <C>
Operating Revenues
  Electric ..................................................   $119,039              $140,626
  Gas .......................................................     11,272                13,740
  Unregulated Affiliate .....................................     35,520                13,531
                                                                --------              --------
      Total Operating Revenues ..............................    165,831               167,897
                                                                --------              --------

Operating Expenses
  Operation:
    Fuel used in electric generation and
       purchased electricity ................................     76,202                63,431
    Purchased natural gas ...................................      6,139                 9,121
    Purchased petroleum .....................................     12,823                  (301)
    Other expenses of operation - regulated activities ......     23,502                31,875
    Other expenses of operation - unreg. affiliate activities     11,660                 6,971
  Depreciation and amortization .............................      8,661                12,612
  Taxes, other than income tax ..............................     10,442                14,849
  Federal/State income tax ..................................      5,565                 8,604
                                                                --------              --------
                                                                 154,994               147,162
                                                                --------              --------

Operating Income ............................................     10,837                20,735
                                                                --------              --------
Other Income and (Deductions)
  Allowance for equity funds used during construction .......        104                    --
  Federal/State income tax ..................................        372                  (149)
  Interest Income ...........................................      3,479                   112
  Other - net ...............................................        859                 2,898
                                                                --------              --------
                                                                   4,814                 2,861
                                                                --------              --------

Income before Interest Charges ..............................     15,651                23,596
                                                                --------              --------

Interest Charges
  Interest on mortgage bonds ................................        669                 2,570
  Interest on other long-term debt ..........................      2,162                 3,591
  Other interest ............................................      2,556                 2,334
  Allowance for borrowed funds used during construction .....        (82)                 (202)
                                                                --------              --------
                                                                   5,305                 8,293

Preferred Stock Dividends of Central Hudson .................        807                   807
                                                                --------              --------

Net Income ..................................................      9,539                14,496
Dividends Declared on Common Stock ..........................      8,835                 8,963
                                                                --------              --------

Balance Retained in the Business ............................       $704                $5,533
                                                                ========              ========

Common Stock:
    Average Shares Outstanding (000s) .......................     16,362                16,696

    Earnings Per Share (Basic and Diluted) ..................      $0.58                 $0.87

    Dividends Declared ......................................     $0.540                $0.540
</TABLE>
                 See Notes to Consolidated Financial Statements.


                                      - 1 -
<PAGE>


                         PART I - FINANCIAL INFORMATION

                   ITEM I - CONSOLIDATED FINANCIAL STATEMENTS

                              CH ENERGY GROUP, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               For the 9 Months Ended September 30,
                                                                   2001                   2000
                                                                --------               ---------
                                                                    (Thousands of Dollars)
<S>                                                             <C>                     <C>
Operating Revenues
  Electric ..................................................   $338,590               $382,949
  Gas .......................................................     90,203                 76,534
  Unregulated Affiliate .....................................    145,964                 47,288
                                                                --------               --------
      Total Operating Revenues ..............................    574,757                506,771
                                                                --------               --------

Operating Expenses
  Operation:
    Fuel used in electric generation and
       purchased electricity ................................    198,340                169,990
    Purchased natural gas ...................................     58,929                 46,151
    Purchased petroleum .....................................     69,684                  5,907
    Other expenses of operation - regulated activities ......     84,636                101,744
    Other expenses of operation - unreg. affiliate activities     39,356                 18,484
  Depreciation and amortization .............................     27,568                 37,609
  Taxes, other than income tax ..............................     37,774                 46,003
  Federal/State income tax ..................................     17,959                 22,106
                                                                --------               --------
                                                                 534,246                447,994
                                                                --------               --------

Operating Income ............................................     40,511                 58,777
                                                                --------               --------

Other Income and (Deductions)
  Allowance for equity funds used during construction .......        281                     --
  Federal/State income tax ..................................     (1,685)                  (323)
  Interest Income ...........................................     13,040                    457
  Other - net ...............................................      5,455                  8,159
                                                                --------               --------
                                                                  17,091                  8,293
                                                                --------               --------

Income before Interest Charges ..............................     57,602                 67,070
                                                                --------               --------

Interest Charges

  Interest on mortgage bonds ................................      4,541                  8,772
  Interest on other long-term debt ..........................      8,648                  9,268
  Other interest ............................................     11,139                  6,698
  Allowance for borrowed funds used during construction .....       (222)                  (527)
                                                                --------               --------
                                                                  24,106                 24,211

Preferred Stock Dividends of Central Hudson .................      2,422                  2,422
                                                                --------               --------

Net Income ..................................................     31,074                 40,437
Dividends Declared on Common Stock ..........................     26,507                 27,109
                                                                --------               --------

Balance Retained in the Business ............................     $4,567                $13,328
                                                                ========               ========

Common Stock:
    Average Shares Outstanding (000s) .......................     16,362                 16,793

    Earnings Per Share (Basic and Diluted) ..................      $1.90                  $2.41

    Dividends Declared ......................................      $1.62                  $1.62
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                     - 2 -
<PAGE>

                              CH ENERGY GROUP, INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                     For the 3 Months
                                                                                    Ended September 30,
                                                                                    2001           2000
                                                                                  --------        -------
                                                                                  (Thousands of Dollars)

<S>                                                                               <C>             <C>
Net Income ....................................................................   $ 9,539         $14,496

Other comprehensive income, net of tax:
   FAS 133 transition adjustment - balance at July 1, 2001 of cumulative effect
    of unrealized gains (losses) at implementation date of
    January 1, 2001 ...........................................................       795              --
       Less:  reclassification adjustment for gains (losses)
              realized in net income ..........................................       398              --
       Plus:  change in fair value for transition adjustment amounts ..........       795              --
                                                                                  -------         -------
              Balance of FAS 133 transition adjustment at Sept. 30, 2001 ......     1,192              --
   FAS 133 - Other deferred unrealized gains (losses) .........................        --              --
                                                                                  -------         -------
Other comprehensive income (loss) .............................................     1,192              --
                                                                                  -------         -------

Total Comprehensive Income ....................................................   $10,731         $14,496
                                                                                  =======         =======
</TABLE>













                                     - 3 -
<PAGE>



                              CH ENERGY GROUP, INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                               For the 9 Months
                                                                              Ended September 30,
                                                                             2001            2000
                                                                           --------        --------
                                                                            (Thousands of Dollars)

<S>                                                                          <C>            <C>
Net Income .............................................................     $31,074        $40,437

Other comprehensive income, net of tax:
   FAS 133 transition adjustment - cumulative effect of
    unrealized gains (losses) at implementation date of
    January 1, 2001 ....................................................      (1,896)            --
       Less:  reclassification adjustment for gains (losses)
                 realized in net income ................................        (394)            --
       Plus:  change in fair value for transition adjustment amounts ...       2,694             --
                                                                             -------        -------
              Balance of FAS 133 transition adjustment at Sept. 30, 2001       1,192             --
   FAS 133 - Other deferred unrealized gains (losses) ..................          --             --
                                                                             -------        -------
Other comprehensive income (loss) ......................................       1,192             --
                                                                             -------        -------

Comprehensive Income ...................................................     $32,266        $40,437
                                                                             =======        =======
</TABLE>












                                     - 4 -
<PAGE>


                              CH ENERGY GROUP, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                         September 30,   December 31,
                                                             2001           2000
                          ASSETS                          (Unaudited)     (Audited)
                                                          ----------     ----------
                                                            (Thousands of Dollars)
<S>                                                       <C>             <C>
Utility Plant
       Electric .......................................   $  574,092      $1,277,617
       Gas ............................................      178,582         172,242
       Common .........................................      104,192          99,353
       Nuclear fuel ...................................       46,701          46,688
                                                          ----------      ----------
                                                             903,567       1,595,900

       Less:  Accumulated depreciation ................      375,869         668,168
              Nuclear fuel amortization ...............       42,782          40,762
                                                          ----------      ----------
                                                             484,916         886,970

       Construction work in progress ..................       47,914          43,882
                                                          ----------      ----------
               Net Utility Plant ......................      532,830         930,852
                                                          ----------      ----------

Other Property and Plant ..............................       45,018          42,979
                                                          ----------      ----------

Prefunded Pension Costs and Other Investments
        Prefunded Pension Costs .......................       75,194          63,390
        Other Investments .............................       20,444          23,201
                                                          ----------      ----------
Total Prefunded Pension Costs and Other Investments ...       95,638          86,591
                                                          ----------      ----------

Intangible Assets .....................................       66,346          68,458
                                                          ----------      ----------

Current Assets
       Cash and cash equivalents ......................      305,426          28,318
       Accounts receivable from customers-net of
             allowance for doubtful accounts ..........       64,393         109,403
       Accrued unbilled utility revenues ..............        9,893          19,751
       Other receivables ..............................        4,253           5,352
       Fuel, materials and supplies, at average cost ..       18,056          30,629
       Special deposits and prepayments ...............       22,688          21,608
                                                          ----------      ----------
                Total Current Assets ..................      424,709         215,061
                                                          ----------      ----------

Deferred Charges and Other Assets
       Regulatory assets ..............................       35,201         155,230
       Unamortized debt expense .......................        3,593           4,869
       Fair value of derivative instruments ...........       57,096            --
       Other Assets ...................................       22,227          26,933
                                                          ----------      ----------
                Total Deferred Charges and Other Assets      118,117         187,032
                                                          ----------      ----------

Accumulated Deferred Income Tax (Net) .................       16,788              --
                                                          ----------      ----------

                          Total Assets ................   $1,299,446      $1,530,973
                                                          ==========      ==========
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       -5-
<PAGE>


                              CH ENERGY GROUP, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                 September 30,   December 31,
                                                                                     2001            2000
                       CAPITALIZATION AND LIABILITIES                             (Unaudited)     (Audited)
                                                                                  ------------   -----------
                                                                                    (Thousands of Dollars)
<S>                                                                                <C>              <C>
Capitalization
        Common Stock Equity:
             Common stock, 30,000,000 shares authorized; shares issued
               ($.10 par value):
                 9/30/2001  = 16,862,087
                 12/31/2000 = 16,862,087 .......................................   $   1,686        $   1,686
        Paid-in capital ........................................................     351,230          351,230
        Retained earnings ......................................................     152,391          147,824
        Reacquired capital stock (500,000 shares) ..............................     (18,766)         (18,766)
        Other Comprehensive Income -
            Unrealized Derivative Gains (Losses) ...............................       1,192               --
        Capital stock expense ..................................................      (1,176)          (1,232)
                                                                                   ---------        ---------
                Total Common Stock Equity ......................................     486,557          480,742
                                                                                   ---------        ---------

        Cumulative Preferred Stock

             Not subject to mandatory redemption ...............................      21,030           21,030
             Subject to mandatory redemption ...................................      35,000           35,000
                                                                                   ---------        ---------
                Total Cumulative Preferred Stock ...............................      56,030           56,030
                                                                                   ---------        ---------

        Long-term Debt .........................................................     236,123          320,369
                                                                                   ---------        ---------
                Total Capitalization ...........................................     778,710          857,141
                                                                                   ---------        ---------

Current Liabilities
        Current maturities of long-term debt ...................................          --           62,610
        Notes payable ..........................................................       8,250          165,000
        Accounts payable .......................................................      47,813           63,845
        Accrued interest .......................................................       3,142            7,256
        Dividends payable ......................................................       9,643            9,643
        Accrued vacation .......................................................       3,900            4,472
        Customer deposits ......................................................       4,912            4,637
        Accrued taxes payable ..................................................     110,808            3,087
        Other ..................................................................       4,865            8,005
                                                                                   ---------        ---------
                Total Current Liabilities ......................................     193,333          328,555
                                                                                   ---------        ---------

Deferred Credits and Other Liabilities
        Regulatory liabilities .................................................     271,192          118,574
        Operating reserves .....................................................       5,744            4,755
        Other ..................................................................      50,467           27,120
                                                                                   ---------        ---------
                Total Deferred Credits and Other Liabilities ...................     327,403          150,449
                                                                                   ---------        ---------

Accumulated Deferred Income Tax ................................................          --          194,828
                                                                                   ---------        ---------


                     TOTAL CAPITALIZATION AND LIABILITIES.......................  $1,299,446       $1,530,973
                                                                                  ----------       ----------
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      - 6 -
<PAGE>


                              CH ENERGY GROUP, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                  For the 9 Months Ended
                                                                                       September 30,
                                                                                     2001        2000
                                                                                  ---------    ---------
                                                                                  (Thousands of Dollars)
<S>                                                                               <C>          <C>
OPERATING ACTIVITIES:

     Net Income ...............................................................     $31,074      $40,437

          Adjustments to reconcile net income to net cash provided by operating
             activities:
                 Depreciation, amortization & nuclear fuel amortization .......      30,534       40,390
                 Deferred income taxes, net ...................................       2,821        4,457
                 Nine Mile 2 Plant deferred finance charges, net ..............       1,311       (3,572)
                 Provision for uncollectibles .................................       1,875        1,725
                 Net accrued/deferred pension costs ...........................     (11,498)     (10,302)
                 Net deferred gas costs/gas refunds ...........................         237       (1,434)
                 Other, net ...................................................      11,879       (5,598)

             Changes in operating assets and liabilities, net:
                 Accounts receivable and unbilled revenues ....................      54,092        5,432
                 Fuel, materials and supplies .................................      (1,748)       1,367
                 Special deposits and prepayments .............................      (1,080)      (7,041)
                 Accounts payable .............................................     (16,032)      (4,231)
                 Accrued taxes and interest ...................................      76,141        4,606
                 Deferred taxes related to sale of plants and NMP2 write-off ..    (233,876)          --
                 Other, net ...................................................      (3,437)      (1,361)
                                                                                  ---------    ---------

          NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES .................     (57,707)      64,875
                                                                                  ---------    ---------

INVESTING ACTIVITIES:

          Proceeds from sale of fossil generation plants ......................     713,202           --
          Additions to plant ..................................................     (40,905)     (41,198)
          Investment activity of unregulated affiliate ........................      (6,343)      (8,925)
          Payments to Nine Mile 2 Plant decommissioning trust fund ............        (651)        (651)
          Other, net ..........................................................       3,414         (551)
                                                                                  ---------    ---------

          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES .................     668,717      (51,325)
                                                                                  ---------    ---------

FINANCING ACTIVITIES:

          Proceeds from issuance of long-term debt ............................          --       47,500
          Repayments of short-term debt .......................................    (156,750)       5,000
          Retirement and redemption of long-term debt .........................    (147,380)     (35,100)
          Dividends paid on common stock ......................................     (26,431)     (27,251)
          Reacquired capital stock ............................................        --         (8,470)
          Issuance and redemption costs of long-term debt .....................      (3,341)        (313)
                                                                                  ---------    ---------

          NET CASH USED IN FINANCING ACTIVITIES ...............................    (333,902)     (18,634)
                                                                                  ---------    ---------

NET CHANGE IN CASH AND CASH EQUIVALENTS .......................................     277,108       (5,084)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR .................................      28,318       20,385
                                                                                  ---------    ---------

CASH AND CASH EQUIVALENTS - END OF PERIOD .....................................    $305,426      $15,301
                                                                                  =========    =========

Supplemental Disclosure of Cash Flow Information

          Interest paid .......................................................     $18,963      $16,907

          Federal & State income tax paid .....................................    $141,405      $18,800
</TABLE>

                 See Notes to Consolidated Financial Statements

                                      - 7 -
<PAGE>

                              CH ENERGY GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

         The accompanying Consolidated Financial Statements of CH Energy Group,
Inc. (herein the Corporation) are unaudited but, in the opinion of Management,
reflect adjustments (which include normal recurring adjustments) necessary for a
fair statement of the results of operations for the interim periods presented.
These condensed unaudited quarterly Consolidated Financial Statements do not
contain the detail or footnote disclosures concerning accounting policies and
other matters which would be included in annual Consolidated Financial
Statements and, accordingly, should be read in conjunction with the audited
Consolidated Financial Statements (including the Notes thereto) included in the
Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2000
(Corporation's 10-K Report).

         Due to the seasonal nature of the Corporation's operations, financial
results for interim periods are not necessarily indicative of trends for a
twelve-month period.

NOTE 2 - REGULATORY MATTERS

         Reference is made to Note 2 - "Regulatory Matters" to the Consolidated
Financial Statements of the Corporation's 10-K Report under the caption "Impact
of Settlement Agreement on Accounting Policies," (hereinafter the Settlement
Agreement).

         At December 31, 2000, the net regulatory assets associated with Central
Hudson's fossil-fueled generating assets, including asbestos litigation costs
and Clean Air Act credits, of Central Hudson Gas & Electric Corporation (Central
Hudson), a wholly-owned affiliate of the Corporation, totaled $1.9 million. On
January 30, 2001, Central Hudson sold its interests in the Danskammer and
Roseton Generating Plants. The proceeds in excess of the net book value were
offset against the related fossil-fueled net regulatory assets. The balance in
these accounts at September 30, 2001 is zero. (See Note 2 - "Regulatory Matters"
to the Consolidated Financial Statements of the Corporation's 10-K Report under
the caption "Sale of Generating Plants").

COMPETITIVE OPPORTUNITIES PROCEEDING SETTLEMENT AGREEMENT

         As reported under the caption "Competitive Opportunities Proceeding
Settlement Agreement" in Note 2 to the Consolidated Financial Statements
included in the Corporation's 10-K Report,


                                       8
<PAGE>



Central Hudson received approval from its shareholders and regulators to form a
holding company. The holding company restructuring occurred on December 15,
1999. The competitive business subsidiaries of the Corporation are described in
Item 1 of the Corporation's 10-K Report under the caption "Affiliates of the
Corporation."

PSC PROCEEDINGS

         NINE MILE 2 PLANT: Reference is made to Note 3 - Nine Mile 2 Plant
under the caption "General" to the Consolidated Financial Statements included in
the Corporation's 10-K Report for a discussion of the proposed sale of the
interests of certain cotenant owners, including Central Hudson, in the Nine Mile
Point Unit No. 2 Nuclear Plant (Nine Mile 2 Plant).

         On October 24, 2001, the Public Service Commission of the State of New
York (PSC) authorized the sale of these interests, which authorization is set
forth in an Order of the PSC issued and effective October 26, 2001 (Nine Mile 2
Order). The sale of Central Hudson's interest in the Nine Mile 2 Plant took
place on November 7, 2001, as described in Item 2 below under the caption "Other
Matters - Nine Mile 2 Plant Sale."

         RATE CASE PROCEEDING: Reference is made to Note 2 of the Corporation's
10-K Report under the caption "Regulatory Matters" under the caption "Rate
Proceedings - Electric and Gas" and to Note 2 to the Notes to Consolidated
Financial Statements, under the caption "Rate Proceedings - Electric and Gas"
contained in the Corporation's Quarterly Report, on Form 10-Q, for the quarterly
period ended June 30, 2001, for information with respect to Central Hudson's
major rate and restructuring proposal filed with the PSC.

         Effective October 25, 2001, the PSC issued its Order Establishing Rates
in that Proceeding (Rate Order), the significant terms and conditions of which
are:

         TERM: Three years, beginning July 1, 2001, with a Central Hudson option
to extend the Rate Order for two (2) years.

         RATES: Electric delivery rates will be reduced by 1.2% and then frozen
for the remainder of the term of the Rate Order. Natural gas delivery rates
will be frozen for the term of the Rate Order.

         PURCHASED ELECTRICITY AND NATURAL GAS: Central Hudson will continue to
purchase electric energy and natural gas for its full service customers and
will recover 100% of these costs from customers through energy adjustment
mechanisms.


                                       9
<PAGE>



         RATE STRUCTURE: Customer charges will be increased and volumetric
delivery charges will be reduced.

         Customer bills will be formatted to show the market price of
electricity in order to encourage competition and enhance customer migration to
third party energy suppliers.

         Customers will receive refunds of $25 million annually for each of the
first three (3) years the Rate Order is effective.

         RETURN ON EQUITY: Central Hudson will be allowed a base return on
equity (ROE) of 10.3% on the equity portion of its rate base (approximately $250
million). The common equity ratio will be capped at 47% in the first year of the
settlement period and decline 1% per year in each of the next two (2) years.
Earnings above the 10.3% base ROE will be retained by Central Hudson up to
11.3%, with a 50-50 sharing between customers and Central Hudson between 11.3%
and 14%. Earnings above 14.0% will be reserved for customer benefits.

         CUSTOMER BENEFITS: Excess proceeds from power plant sales and deferred
regulatory accounts approximating $164 million (net of tax) are available for
customer benefit. The Rate Order provides for the following customer benefit
uses, unused amounts to remain available for future disposition:

         1)   Customer refunds                   $45 million (after tax)
         2)   Rate Base reduction                $42 million (after tax)
         3)   Reliability Program                $13 million (after tax)
         4)   Offset of manufactured gas
              plant site remediation costs       $12.6 million (after tax)

         The Rate Order also establishes customer service "incentives," enhanced
low income and customer education programs.

         OTHER MATTERS RELATED TO THE RATE ORDER AND THE NINE MILE 2 ORDER: Also
included in these Orders were approval for Central Hudson to recognize $19.8
million of tax benefits related to its 2001 power plant sales, offset by $11.4
million of after tax contributions by Central Hudson to the customer benefit
fund, or a net benefit to shareholders of $8.4 million. Central Hudson will
additionally recognize net income for shareholders under a prior regulatory
settlement, as follows: $3.2 million in 2001, $2.9 million in 2001, $2.0 million
in 2002, $5.9 million in 2003 and $5.9 million in 2004. These tax benefits and
prior settlement-related amounts are excluded from the ROE sharing calculation
described above.



                                       10
<PAGE>



NOTE 3 - SEGMENTS AND RELATED INFORMATION

         Reference is made to Note 11 - "Segments and Related Information" to
the Consolidated Financial Statements included in the Corporation's 10-K Report.

         The Corporation's primary reportable operating segments are the
regulated electric and gas operations of Central Hudson and the unregulated
competitive business subsidiaries of Central Hudson Energy Services, Inc. (CH
Services). The segments currently operate in the Northeast and Mid-Atlantic
regions of the United States.

         Certain additional information regarding these segments is set forth in
the following table. General corporate expenses, property common to both
segments and depreciation of the common property have been allocated to the
segments in accordance with the practice established for regulatory purposes.

















                                       11
<PAGE>



CH Energy Group, Inc. Segment Disclosure - FAS 131

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                          Quarter Ended September 30, 2001
---------------------------------------------------------------------------------------------------
                                                Regulated                 Unreg.          Total
---------------------------------------------------------------------------------------------------
                                         Electric           Gas
---------------------------------------------------------------------------------------------------
<S>                                      <C>              <C>            <C>             <C>
Revenues from external customers         $119,020         $11,182        $35,520         $165,722
---------------------------------------------------------------------------------------------------
Intersegment revenues                          19              90           -                 109
---------------------------------------------------------------------------------------------------
         Total Revenues                  $119,039         $11,272        $35,520         $165,831
---------------------------------------------------------------------------------------------------
Earnings Per Share                       $   0.56         $  0.01        $  0.01         $   0.58
---------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                           Quarter Ended September 30, 2000
---------------------------------------------------------------------------------------------------
                                                Regulated                 Unreg.            Total
---------------------------------------------------------------------------------------------------
                                         Electric           Gas
---------------------------------------------------------------------------------------------------
<S>                                      <C>              <C>            <C>             <C>
Revenues from external customers         $140,612         $13,294        $13,531         $167,437
---------------------------------------------------------------------------------------------------
Intersegment revenues                          14             446           -                 460
---------------------------------------------------------------------------------------------------
         Total Revenues                  $140,626         $13,740        $13,531         $167,897
---------------------------------------------------------------------------------------------------
Earnings Per Share                       $   0.85         $ (0.07)       $  0.09         $   0.87
---------------------------------------------------------------------------------------------------

<CAPTION>
---------------------------------------------------------------------------------------------------
                                                      Nine Months Ended September 30, 2001
---------------------------------------------------------------------------------------------------
                                                     Regulated            Unreg.            Total
---------------------------------------------------------------------------------------------------
                                         Electric           Gas
---------------------------------------------------------------------------------------------------
<S>                                      <C>                  <C>           <C>             <C>
Revenues from external customers         $338,534         $89,868        $145,964        $574,366
---------------------------------------------------------------------------------------------------
Intersegment revenues                          56             335           -                 391
---------------------------------------------------------------------------------------------------
         Total Revenues                  $338,590         $90,203        $145,964        $574,757
---------------------------------------------------------------------------------------------------
Earnings Per Share                       $   0.85         $  0.57        $   0.48        $   1.90
---------------------------------------------------------------------------------------------------

<CAPTION>
---------------------------------------------------------------------------------------------------
                                                         Nine Months Ended September 30, 2000
---------------------------------------------------------------------------------------------------
                                                    Regulated                Unreg.          Total
---------------------------------------------------------------------------------------------------
                                             Electric           Gas
---------------------------------------------------------------------------------------------------
<S>                                      <C>              <C>            <C>            <C>
Revenues from external customers         $382,884         $75,160        $47,288         $505,332
---------------------------------------------------------------------------------------------------
Intersegment revenues                          65           1,374           -               1,439
---------------------------------------------------------------------------------------------------
         Total Revenues                  $382,949         $76,534        $47,288         $506,771
---------------------------------------------------------------------------------------------------
Earnings Per Share                       $   1.99         $  0.38        $  0.04         $   2.41
---------------------------------------------------------------------------------------------------
</TABLE>






                                       12

<PAGE>


NOTE 4 - NEW ACCOUNTING STANDARDS

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - SFAS 133

         Reference is made to Item 7A - "Quantitative and Qualitative Disclosure
About Market Risk" of the Corporation's 10-K Report and also, Note 1 - "Summary
of Significant Accounting Policies" to the Consolidated Financial Statements
under the caption "New Accounting Standards, Other FASB Projects and NRC Policy
Statement." These sections of the Corporation's 10-K provide background
information regarding its risk management policy and practices for minimizing
price risk associated with commodity purchases and the development of SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
requires that all derivative instruments, with certain limited exceptions,
including instruments that meet the "normal purchases and sales" exception, as
defined, be recognized at fair value on the Corporation's balance sheet,
effective January 1, 2001, with offsetting gains or losses recognized in
earnings. The standard also permits the deferral of these gains or losses if
stringent hedge accounting provisions are met.

         The Corporation implemented SFAS 133 on January 1, 2001 and recognized
a net of tax transition adjustment of $(1.9) million to Other Comprehensive
Income (OCI) for the initial adoption of SFAS 133. This amount represents the
cumulative effect of a change in accounting principle for unrealized losses
related to derivatives redesignated as cash flow hedges. Actual gains and losses
related to these derivatives will be realized during the period January 2001
through December 2001.

         Central Hudson uses derivative instruments to hedge the exposure to the
variability in cash flows associated with forecasted sales of natural gas and
forecasted sales and purchases of electricity. These derivatives are not
formally designated as hedges under the provisions of SFAS 133 because the
related gains and losses are included as part of Central Hudson's commodity cost
and/or price reconciled in its natural gas and electric energy service charge
clauses. The earnings offset to these derivatives are, therefore, deferred for
pass-back to or recovery from customers under these regulatory adjustment
mechanisms. The total fair value of Central Hudson derivatives at September 30,
2001 is $55.1 million due largely to the conversion, effective July 1, 2001, of
a multi-year transition purchase power agreement (TPA) (see Item 2 of the
Corporation's 10-K Report under the caption "Load and Capacity") from a physical
to a financial arrangement. Under the terms of the modified agreement, Central
Hudson will purchase electric energy volumes covered by the TPA at market and
financially net settle with the TPA counter-party for differences between market
prices

                                       13
<PAGE>



and the fixed prices stipulated in the TPA. The total net gain (realized and
unrealized) year-to-date associated with settled and open derivatives is $71.0
million, comprised largely of unrealized gains associated with the TPA
derivative, through October 2004.

         CH Services uses derivative instruments to hedge variability in cash
flows associated with forecasted sales and purchases of electricity and also,
the fair value of certain firm commitments relating to heating oil purchases.
These hedges have been highly effective and no gains or losses from
ineffectiveness were recorded during the three months ended September 30, 2001
or year-to-date. The assessment of hedge effectiveness for fair value hedges
excludes the change in the fair value of the premium paid for these derivative
instruments. These premiums, which are not material, are expensed based on the
change in their fair value. The earnings offset to the change in fair value of
the cash flow hedges is deferred to OCI and is reclassified to earnings when
earnings are affected by the hedged transactions (forecasted purchase or sale).
As amounts are reclassified from OCI, the impact on earnings is offset by the
recognition of the hedged transactions. Gains and losses restored to earnings
are recorded as part of the cost or price of the related commodity. The net of
tax balance in OCI of $1,192,000 at September 30, 2001 is expected to be
restored to earnings by the end of 2001. Year-to-date, CH Services has
recognized a total net gain (realized and unrealized) of $3.5 million related to
derivatives. The total fair value of CH Service's derivatives at September 30,
2001 is $2.0 million.

PLANT DECOMMISSIONING

         Reference is made to the caption "New Accounting Standards, Other FASB
Projects and NRC Policy Statement" of Note 1 - "Summary of Significant
Accounting Policies," to the Consolidated Financial Statements of the
Corporation's 10-K Report. On July 5, 2001, the Financial Accounting Standards
Board (FASB) issued Statement No. 143, ACCOUNTING FOR ASSET RETIREMENT
OBLIGATIONS. Initially started in 1994 as a project to account for the costs of
nuclear decommissioning, the FASB expanded the scope to include similar closure
or removal-type costs in other industries that are incurred at any time during
the life of an asset. That standard requires entities to record the fair value
of a liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the

                                       14
<PAGE>


related asset. Upon settlement of the liability, an entity either settles the
obligation for its recorded amount or incurs a gain or loss upon settlement. The
standard is effective for fiscal years beginning after June 15, 2002, with
earlier application encouraged. The Corporation is reviewing this new accounting
standard, and cannot make any prediction at this time as to its ultimate
effect(s) on the financial condition, results of operations and cash flows of
the Corporation and/or its affiliates at this time.

PROPERTY, PLANT AND EQUIPMENT

         In April, FASB agreed to issue an Exposure Draft that would amend
certain APB Opinions and FASB Statements to incorporate changes that would
result from issuance of a proposed AICPA Statement of Position (SOP), ACCOUNTING
FOR CERTAIN COSTS AND ACTIVITIES RELATED TO PROPERTY, PLANT, AND EQUIPMENT. The
FASB also agreed that the Exposure Draft would propose to amend APB Opinion No.
28, INTERIM FINANCIAL REPORTING, so the provisions of the proposed SOP that
would require certain costs to be charged to expense as incurred would apply
also to interim periods. In June, FASB approved for issuance FASB Exposure Draft
ACCOUNTING IN INTERIM AND ANNUAL FINANCIAL STATEMENTS FOR CERTAIN COSTS AND
ACTIVITIES RELATED TO PROPERTY, PLANT, AND EQUIPMENT, which was issued
contemporaneously in July 2001 with the issuance of the proposed SOP by the
Accounting Standards Executive Committee (AcSEC).

         AcSEC drafted the proposed SOP to address diversity in accounting for
expenditures related to property, plant and equipment (PP&E), including
improvements, replacements, betterments, additions, repairs and maintenance. The
proposed SOP addresses accounting and disclosure issues related to determining
which PP&E costs should be capitalized versus those that should be charged to
expense as incurred. The proposed SOP also addresses capitalization of indirect
and overhead costs and component accounting for PP&E.

         If adopted as a final Statement, the FASB proposal would be effective
for annual and interim financial statements for fiscal years beginning after
June 15, 2002, with earlier adoption encouraged. The comment period has been
extended to November 15, 2001.

         The Corporation can make no prediction at this time as to the ultimate
form of the proposed accounting standard, assuming it is adopted, nor can it
make any prediction as to its ultimate effect(s) on the financial condition,
results of operations and cash flows of the Corporation and/or its affiliates.



                                       15
<PAGE>


BUSINESS COMBINATIONS AND INTANGIBLE ASSETS - ACCOUNTING FOR GOODWILL

         On July 20, 2001, FASB issued two statements related to its Business
Combinations issues - Statement No. 141, BUSINESS COMBINATIONS (SFAS 141), and
Statement No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS (SFAS 142).

         Statement 141 requires that all business combinations be accounted for
under a single method - the purchase method. Use of the pooling-of-interests
method is no longer permitted. Statement 141 requires that the purchase method
be used for business combinations initiated after June 30, 2001. This statement
will be applied as required.

         Statement 142 requires that goodwill no longer be amortized to
earnings, but instead be periodically reviewed for impairment. The amortization
of goodwill ceases upon adoption of Statement 142, which for the Corporation,
will be January 1, 2002. The Corporation presently amortizes goodwill related to
acquisitions made by CH Services. It is expected that the change in accounting
will favorably impact the Corporation's results of operations when implemented;
however, until this new accounting standard has been thoroughly reviewed by the
Corporation, it cannot make any prediction as to its ultimate effect(s) on the
financial condition, results of operations and cash flows of the Corporation
and/or its affiliates.

LONG-LIVED ASSETS

         In August 2001, the FASB issued Statement No. 144, ACCOUNTING FOR THE
IMPAIRMENT OF DISPOSAL OF LONG-LIVED ASSETS (SFAS 144).

         Statement 144 requires that long-lived assets be measured at the lower
of carrying amount or fair value less cost to sell, whether reported in
continuing operations or in discontinued operations. Impairment occurs when the
carrying amount of a long-lived asset exceeds its fair value. An impairment loss
will be recognized and will represent the amount by which the carrying amount of
the long-lived asset exceeds its fair value. The standard is effective for
fiscal years beginning after December 15, 2001, to be applied prospectively.

         It is expected that the change in accounting will have no impact on the
Corporation's results of operations when implemented; however, until this new
accounting standard has been thoroughly reviewed by the Corporation, it cannot
make any prediction as to its ultimate effect(s) on the financial


                                       16
<PAGE>



condition, results of operations and cash flows of the Corporation and/or its
affiliates.

NOTE 5 - STOCK-BASED COMPENSATION INCENTIVE PLANS

         Reference is made to Note 9 - "Stock-Based Compensation Incentive
Plans" to the Consolidated Financial Statements of the Corporation's 10-K
Report. The Corporation has a Long-Term Performance-Based Incentive Plan (Plan)
for executive officers and other key employees of the Corporation and its
affiliates, effective January 1, 2000. The aggregate number of shares of Common
Stock of the Corporation available for the grant of awards is 500,000.

         At the Corporation's annual meeting held April 24, 2001, the
shareholders approved an amendment to the Plan to revise the definition of Plan
Participants to include, effective January 1, 2001, Non-Employee Directors. The
amendment provides that Non-qualified Stock Options (Options) for a term of ten
(10) years be granted automatically to Non-Employee Directors of the
Corporation. Each Non-Employee Director was initially granted 3,000 Options,
effective January 1, 2001; and 1,000 Options will be granted to each Director
each January 1 thereafter. The amendment also stipulates that the exercise price
is the Fair Market Value of the Corporation's underlying Common Stock on the
date of the grant, that the Options are immediately exercisable, and that no
other Awards under the Plan will be granted to Non-Employee Directors.

         Also, an additional 35,900 Options were granted to executive officers
and other key employees of the Corporation and its affiliates by the
Compensation and Succession Committee of the Corporation's Board of Directors,
effective as of January 1, 2001. The Options are exercisable over a period of
ten years, with 40% vesting after two years and 20% each year thereafter for the
following three years. The exercise price of all the Options granted, effective
January 1, 2001, is $44.06 per share and is based on the average market price
(as traded on the New York Stock Exchange on January 2, 2001). The Committee
also granted a total of 7,230 Performance Shares to these officers/key
employees, effective as of January 1, 2001, on the basis of achieving superior
total shareholder return over a three-year period ending December 31, 2003, as
measured against an industry index.

         SFAS No. 123 requires a company to disclose pro forma net income and
earnings per share as if the resulting stock-based compensation amounts were
recorded in the Consolidated Statement of Earnings. The effect of these Plan
Awards on net income, as well as basic diluted earnings per share of the
Corporation, was

                                       17
<PAGE>



not material for the quarter and the nine months ended September 30, 2001.

         A summary of the status of Options awarded to executive officers and
other key employees and Non-Employee Directors of the Corporation and its
affiliates under the Plan as of September 30, 2001 is as follows:

                                          Weighted
                                          Average
                                          Exercise          Remaining
                           Shares          Price        Contractual Life
                           ---------------------------------------------
Outstanding at 1/1/01      30,300          $31.94         8-1/4 years
        Granted            59,900           44.06         9-1/4 years
        Exercised              --              --
        Forfeited              --              --
Outstanding at 9/30/01     90,200          $39.98

NOTE 6 - COMMITMENTS AND CONTINGENCIES

         The Corporation faces a number of contingencies which arise during the
normal course of business and which have been discussed in Note 10 -
"Commitments and Contingencies," to the Consolidated Financial Statements
included in the Corporation's 10-K Report. Except for that which is disclosed in
Part II of this Quarterly Report, on Form 10-Q, for the quarterly period ended
September 30, 2001, and all documents previously filed with the Securities and
Exchange Commission (SEC) in 2001, there have been no material changes in the
subject matters discussed in Note 10.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CAPITAL RESOURCES AND LIQUIDITY

         The growth of retained earnings in the first nine months of 2001
contributed to the increase in the book value of common stock from $29.38 at
December 31, 2000 to $29.74 at September 30, 2001. This, along with short-term
and long-term debt retirement, contributed to the increase in the common equity
ratio from 44.3% at December 31, 2000 to 61.8% at September 30, 2001.

         During the second quarter, a portion of the proceeds from the January
30, 2001 divestiture of the Roseton and Danskammer fossil generating Plants was
used to call the entire $70 million issue of 9.25% First Mortgage Bonds due May
1, 2021. During the second quarter, Central Hudson made open market purchases
and retired additional debt of $4.1 million of 6.25% First Mortgage Bonds due
June 1, 2007, and 7.32% Medium Term Notes came due on


                                       18
<PAGE>


their normal maturity date of June 13, 2001 in the amount of $40 million. In the
third quarter, the following Medium Term Notes came due on their normal maturity
dates: On June 30, 2001, the 7.05% for $7.5 million and September 10, 2001, the
5.93% for $15 million. In the future, Central Hudson may repurchase debt in the
open market.

         As part of the holding company restructuring, referred to in Note 2 of
the Consolidated Financial Statements contained herein, the Corporation has
established a revolving credit agreement with five commercial banks under which
it has committed short-term credit for borrowing up to $170 million through
December 4, 2001. The Corporation has determined that it has sufficient cash
reserves to fund its cash requirements and will not renew this facility when it
expires on December 4, 2001.

         Central Hudson, effective October 19, 2001, terminated its $50 million
credit facility and entered into a $75 million credit facility with several
commercial banks. Central Hudson also continues to have short-term borrowing
facilities with local banks for an aggregate of $2 million. Authorization from
the PSC limits the short-term borrowing amount Central Hudson may have
outstanding, at any time, to $77 million in the aggregate which authorization
expires June 30, 2004.

         Effective November 6, 2001, Central Hudson defeased its First Mortgage
Bond Indenture, dated January 1, 1927 and thereafter amended and supplemented,
by depositing approximately $39 million with the Trustee under this Indenture.
Effective that date Central Hudson was released of all obligations under the
Indenture. The lien of the Indenture was released from Central Hudson's
property, but Central Hudson can no longer issue secured debt under that
Indenture.

         Central Hudson's PSC authorization to issue Medium Term Notes (Series
C) expired on June 30, 2001. The PSC, by Order issued and effective September
27, 2001, authorized Central Hudson to issue up to $100 million in aggregate
principal amount of a new series of Medium Term Notes through June 30, 2004.

         CH Services has a $12.5 million line of credit with a commercial bank,
and as of September 30, 2001, there was no outstanding balance.

         At September 30, 2001, the Corporation had $8.25 million of short-term
debt outstanding. Investments in short-term securities, including cash and cash
equivalents, were $305.4 million at September 30, 2001.



                                       19
<PAGE>


EARNINGS PER SHARE

         Earnings per share of common stock were $.58 for the third quarter of
2001, as compared to $.87 for the third quarter of 2000, a decrease of 33%.
Earnings per share of common stock were $1.90 for the nine months ended
September 30, 2001, as compared to $2.41 for the first nine months of 2000, a
decrease of 21%.

         The decrease in earnings per share for the quarter ended September 30,
2001, as compared to the same period in 2000, resulted primarily from the
continued net effect of eliminating its investment in the fossil plants and the
Nine Mile 2 Plant, effective February 1, 2001. The reduction in Central Hudson's
earnings in the last quarter will be less due to the effect of including in
income tax benefits and prior settlement related amounts approved by the PSC in
the Nine Mile 2 Order.

         The earnings per share were also down due to a reduction in earnings
from the Corporation's unregulated affiliate, CH Services, due primarily to
losses in the third quarter of 2001 incurred by its oil distribution
subsidiaries (the largest of which was acquired in November 2000), which
normally incur operating losses during the non-heating season, and the higher
cost of natural gas used at the CH Resources' generating plants. The CH Services
loss of $.09 earnings per share in the third quarter of 2001 was offset by
interest income from the CH Energy Group holding company resulting in earnings
per share of $.01 for the unregulated segments.

         In addition, there was a decrease in Central Hudson's gas net operating
revenues (net of the cost of gas and revenue taxes). A 6% reduction in own
territory firm sales was largely offset by a favorable annual reconciling
adjustment related to Central Hudson's gas supply charge. The reduction in sales
is largely attributable to an 8% reduction in residential space heating sales.

         These decreases in earnings were partially offset by an increase in
Central Hudson's other electric net operating revenues (net of the cost of fuel,
purchased electricity and revenue taxes), primarily due to a 6% increase in own
territory electric sales resulting from an increase in the average number of
residential and commercial customers.

         The reduction in earnings for the first nine months of 2001 compared to
the same period in the year 2000 reflects the eight-month impact of Central
Hudson interim electric rates, effective February 1, 2001, which were reduced to
reflect the elimination of all costs associated with Central Hudson's fossil
generating plants and also, its investment in those plants and in the Nine


                                       20
<PAGE>


Mile 2 Plant. The fossil generation plants were sold on January 30, 2001 and a
portion of the proceeds were used to recover Central Hudson's share of the
investment in the Nine Mile 2 Plant. The decrease in earnings is largely
attributable to a reduction in the return on investment in Central Hudson's
fossil and nuclear generating plants. The reduction of rate base serves to
permanently reduce the pool of regulated assets that are available to generate
income for Central Hudson. However, year-to-date CH Services' earnings
contribution is $.05 ahead of the comparable period last year on a revenue
increase of 209%. This increase was largely attributable to the acquisition of
an oil distribution company in November 2000. Earnings were also favorably
impacted by an increase in Central Hudson's gas net operating revenues due to
increased residential and commercial sales during the early part of the
nine-month period due to colder weather.

         During the first quarter, the Corporation established a 500,000 share
common stock repurchase program for 2001. However, no repurchase transactions
took place by September 30, 2001, and consequently, the repurchase program did
not affect financial results for the quarter ended September 30, 2001.

RESULTS OF OPERATIONS

         The following financial review identifies the causes of significant
changes in the amounts of revenues and expenses for the Corporation and its
affiliates (regulated and unregulated businesses) comparing the three-month and
nine-month periods ended September 30, 2001 to the three-month and nine-month
periods ended September 30, 2000. The operating results of the regulated
business reflect Central Hudson's electric and gas sales and services and the
operating results of the unregulated affiliate reflect CH Services' operations.

OPERATING REVENUES

         Operating revenues decreased $2.1 million (1%) for the third quarter of
2001 as compared to the third quarter of 2000, and increased $68.0 million for
the first nine months of 2001 as compared to the first nine months of 2000.
Details of these revenue changes by electric, gas and unregulated businesses are
as follows:







                                       21
<PAGE>



                            INCREASE (DECREASE) FROM PRIOR PERIOD
                                       THIRD QUARTER
                            ELECTRIC         GAS       UNREGULATED
                           ----------      -------     -----------
                                     (Thousands of Dollars)
Customer Sales(a) ......   $(62,193)(c)   $ (2,193)(b)   $ 21,989
Sales to Other Utilities    (12,993)        (1,618)
Fuel and Gas Cost
 Adjustment ............     52,206(d)       1,042           --
Deferred Revenues ......        869(e)         295           --
Miscellaneous ..........        524              6           --
                           --------       --------       --------
     Total .............   $(21,587)      $ (2,468)      $ 21,989
                           ========       ========       ========

                              INCREASE (DECREASE) FROM PRIOR PERIOD
                              NINE MONTHS ENDED SEPTEMBER 30, 2001
                            ELECTRIC         GAS        UNREGULATED
                           ----------      -------      -----------
                                     (Thousands of Dollars)
Customer Sales(a) ......   $(140,998)(c)  $ (4,416)(b)   $  98,676
Sales to Other Utilities     (32,917)       (3,647)
Fuel and Gas Cost
 Adjustment ............     133,972 (d)    19,975            --
Deferred Revenues ......      (4,871)(e)     1,917            --
Miscellaneous ..........         455          (160)           --
                           ---------      --------       ---------
     Total .............   $ (44,359)     $ 13,669       $  98,676
                           =========      ========       =========

(a) Includes delivery of electricity and gas supplied by others.
(b) Both firm and interruptible revenues.
(c) Reduction in revenues is due primarily to change in rates due to sale of
    fossil plants, including elimination of recovery of fuel and purchased
    electricity costs in base rates.
(d) Increase in revenues is due primarily to addition of fuel and purchased
    electricity costs previously recovered in base rates.
(e) Includes the deferral and restoration of revenues related to Central
    Hudson's Retail Access Program and earnings in excess of the rate of return
    cap under the Settlement Agreement.

         The reduction in revenues from electric sales for both periods was due
largely to the reduction of electric rate base to reflect the sale of Central
Hudson's fossil generating plants and the recovery of Central Hudson's share of
its investment in the Nine Mile 2 Plant.

         The increase in gas revenues for the nine months ended September 30,
2001, is due primarily to an increase in amounts collected under Central
Hudson's gas cost adjustment, attributable to higher gas costs plus higher
revenues from firm gas sales. The increases are partially offset by decreases in
revenues from interruptible sales and from sales to other utilities and
marketers.



                                       22
<PAGE>




         Revenues for CH Services increased $22.0 million for the quarter ended
September 30, from $13.5 million in 2000 to $35.5 million in 2001, and increased
$98.7 million for the first nine months ended September 30 from $47.3 in 2000 to
$146.0 in 2001. The increase in revenues is largely attributable to the oil
distribution companies. The increase primarily reflects a growth in sales due to
the acquisition of CH Services' largest oil distribution subsidiary in November
2000.

SALES

         Central Hudson's sales vary seasonally in response to weather
conditions. Generally, electric sales peak in the summer and gas sales peak in
the winter.

         Total kilowatthour sales of electricity within Central Hudson's service
territory increased 6% and firm sales of natural gas decreased 6% in the third
quarter of 2001 as compared to the third quarter of 2000. For the first nine
months ended September 30, 2001, sales of electricity within Central Hudson's
service territory increased 5% and firm sales of natural gas increased 7%.
Changes in sales from last year by major customer classifications, including
energy supplied by others, are set forth below.

                                        INCREASE (DECREASE) FROM PRIOR PERIOD
                                          THIRD QUARTER    9 MOS. ENDED 9/30/01
                                       ------------------  --------------------
                                       ELECTRIC     GAS    ELECTRIC       GAS
                                       --------   -------  --------     --------
Residential........................       11%        (8)%      7%          8%
Commercial.........................        8         (1)       6          10
Industrial.........................        -         (1)       -          (1)
Interruptible......................       N/A        43       N/A        (18)

         Billing heating degree days were 23% lower for the three months ended
September 30, 2001 when compared to the same period in 2000 and 8% higher for
the nine months ended September 30, 2001 as compared to the same period in 2000.
Cooling degree days were 28% higher for the quarter and 21% higher for the nine
months ended September 30, 2001 when compared to the same periods in 2000.

         Interruptible gas sales increased in the third quarter of 2001
reflecting increased transportation volumes of gas used by an electric
generation customer. During the first nine months of 2001, interruptible gas
sales decreased due largely to a reduction in boiler gas sales for electric
generation resulting from the sale of the fossil plants.




                                       23
<PAGE>



OPERATING EXPENSES

         Total operating expenses for the third quarter of 2001 increased $7.8
million from the comparable period in 2000, and for the nine months ended
September 30, 2001, they increased $86.3 million from the same period in 2000.

         In both periods, the reductions in Central Hudson's utility operating
expenses relating to other expenses, depreciation and amortization, and taxes
result from the elimination of all operating costs associated with the fossil
generating plants that were sold and a reduction in depreciation expense for
Central Hudson's share of the Nine Mile 2 Plant, the remaining cost of which was
recovered using sale proceeds. Partially offsetting the reductions is a net
increase of $5.6 million in the third quarter and $23.9 million in the nine
months ended September 30, 2001 as compared to the same periods in the year
2000, in purchased electricity and fuel used in electric generation. Purchased
natural gas costs decreased $2.9 million in the third quarter reflecting a
reduction in the volume purchased and lower natural gas prices. Purchased
natural gas costs increased $9.9 million in the nine months ended September 30,
2001 as compared to the same period in the year 2000. The net increase in energy
costs reflects increased fossil fuel prices, an increase in electric and gas own
territory sales and also, the impact of changing market conditions brought about
by the restructuring of the New York State wholesale electricity market.

         CH Services' operating expenses are primarily fuel costs associated
with the generating plants, purchased electricity, and the cost of petroleum and
natural gas at its oil distribution companies. These costs increased by $20.2
million and $71.3 million for the three and nine-month periods as compared to
the same periods in 2000.

         Other expenses of operation of CH Services, excluding the above,
increased $4.4 million and $26.1 million for the three and nine-month periods as
compared to the same periods in 2000 due to the continued growth of CH Services,
through acquisitions. Included in this increase is depreciation and amortization
on acquisitions.

COMMON STOCK DIVIDENDS

         Reference is made to the caption "Common Stock Dividends and Price
Ranges" of Part II, Item 7 of the Corporation's 10-K Report, for a discussion of
the Corporation's dividend payments. On September 28, 2001, the Board of
Directors of the Corporation declared a quarterly dividend of $.54 per share,
payable



                                       24
<PAGE>


November 1, 2001 to shareholders of record as of October 10, 2001.

OTHER MATTERS

NINE MILE 2 PLANT SALE

         Effective November 7, 2001, Central Hudson sold its 9% interest in the
Nine Mile 2 Plant to an affiliate of Constellation Nuclear LLC for a total
consideration of $66.2 million, of which $28.4 million was paid in cash and
$37.8 million of principal and interest will be paid under a five (5) year
promissory note, all subject to certain post-closing adjustments.

CH RESOURCES, INC. PROPOSED SALE

         Reference is made to Item 1 of the Corporation's 10-K Report, under the
caption "Affiliates of the Corporation - CH Services - CH Resources, Inc." for a
description of CH Resources, Inc., a wholly-owned subsidiary of CH Services. The
Corporation engaged a financial advisor which has initiated a process to divest
its CH Resources subsidiary or the assets thereof. The Corporation cannot
predict whether it will proceed with the divestiture or the proceeds it may
obtain therefrom.

FORWARD-LOOKING STATEMENTS

         Statements included in this Quarterly Report on Form 10Q and the
documents incorporated by reference which are not historical in nature, are
intended to be, and are hereby identified as, "forward-looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements may be identified by words
including "anticipated," "believe," "intends," "estimates," "expect," and
similar expressions. The Corporation cautions readers that forward-looking
statements, including without limitation, those relating to the Corporation's
future business prospects, revenues, proceeds, working capital, liquidity,
income and margins, are subject to certain risks and uncertainties that could
cause actual results to differ materially from those indicated in the
forward-looking statements, due to several important factors including those
identified from time-to-time in the Corporation's reports filed with the SEC.
All forward-looking statements are intended to be subject to the safe harbor
protections provided by such Section 21E. A number of important factors
affecting the Corporation's business and financial results could cause actual
results to differ materially from those stated in the forward-looking
statements. Those factors include weather, energy supply and demand,
developments in the



                                       25
<PAGE>



legislative, regulatory and competitive environment, electric and gas industry
restructuring and cost recovery, future market prices for energy, capacity and
ancillary services, nuclear industry regulation, the outcome of pending
litigation, and certain environmental matters, particularly ongoing development
of air quality regulations and industrial waste remediation requirements. The
Corporation undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.

         Given these uncertainties, undue reliance should not be placed on these
forward-looking statements.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Reference is made to Part II, Item 7A of the Corporation's 10-K Report
for a discussion of market risk. During the third quarter of 2001, the
Corporation's exposure to market risk was not material to its financial position
or results of operations.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         (a) ASBESTOS LITIGATION. For a discussion of lawsuits against Central
Hudson involving asbestos, see Note 10 - "Commitments and Contingencies," under
the caption "Asbestos Litigation," in Part II, Item 8 of the Corporation's 10-K
Report.

         As of November 5, 2001, a total of 2,773 cases involving asbestos have
been brought against Central Hudson of the type described under the caption of
which 1,214 remain pending. Of the 1,559 cases no longer pending against Central
Hudson, 1,422 have been dismissed or discontinued, and Central Hudson has
settled 137 cases. The Corporation is presently unable to assess the validity of
the remaining asbestos lawsuits; accordingly, it cannot determine the ultimate
liability relating to these cases. Based on information known to the Corporation
at this time, including Central Hudson's experience in settling and in obtaining
dismissals of asbestos cases, the Corporation believes that the cost to be
incurred in connection with the remaining lawsuits will not have a material
adverse effect on the Corporation's and/or its affiliates' financial position or
results of operations.





                                       26
<PAGE>



Item 6.  Exhibits and Reports on Form 8-K

         (a) The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-K.

    Exhibit No.
  Regulation S-K
     Item 601
    Designation                              Exhibit Description
-------------------                          -------------------

 (12)        --       Statement Showing Computation of the Ratio of Earnings to
                      Fixed Charges and the Ratio of Earnings to Combined Fixed
                      Charges and Preferred Stock Dividends.

         (b) Reports on Form 8-K. During the period covered by this Report on
Form 10-Q, the Corporation filed the following Current Report on Form 8-K:

             None

                                   SIGNATURES
                                   ----------

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Corporation has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.

                                               CH ENERGY GROUP, INC.
                                                  (Registrant)


                                               By:      /s/ DONNA S. DOYLE
                                                   ----------------------------
                                                            Donna S. Doyle
                                                     Vice President - Accounting
                                                          and Controller

Dated: November 9, 2001




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<PAGE>




                                  EXHIBIT INDEX

         Following is the list of Exhibits, as required by Item 601 of
Regulation S-K, filed as part of this Report on Form 10-Q:

    Exhibit No.
  Regulation S-K
     Item 601
    Designation                              Exhibit Description
------------------                           -------------------

 (12)         --       Statement Showing Computation of the Ratio of Earnings to
                       Fixed Charges and the Ratio of Earnings to Combined
                       Fixed Charges and Preferred Stock Dividends.