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.................June 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 June 30, 2001, was 16,362,087.


<PAGE>

                              CH ENERGY GROUP, INC.
                              ---------------------

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

                                      INDEX
                                      -----

         PART I - FINANCIAL INFORMATION                                PAGE
         ------------------------------                                ----

Item 1 - Consolidated Financial Statements                              1

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

         Consolidated Statement of Income -
           Six Months Ended June 30, 2001 and 2000                      2

         Consolidated Statement of Comprehensive Income
           Three Months Ended June 30, 2001 and 2000                    3

         Consolidated Statement of Comprehensive Income
           Six Months Ended June 30, 2001 and 2000                      4

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

         Consolidated Statement of Cash Flows -
           Six Months Ended June 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                                                  16

Item 3 - Quantitative and Qualitative Disclosure
           about Market Risk                                           22

     PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                             23

Item 5 -  Other Information                                            23

Item 6 - Exhibits and Reports on Form 8-K                              23

Signatures                                                             24

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 June 30,
                                                                                  2001                  2000
                                                                           -----------------    ------------------
                                                                                   (Thousands of Dollars)
<S>                                                                                <C>                   <C>
Operating Revenues
  Electric...........................................................              $104,297              $124,184
  Gas................................................................                25,318                21,954
  Unregulated Affiliate..............................................                36,803                14,788
                                                                           -----------------    ------------------
      Total Operating Revenues.......................................               166,418               160,926
                                                                           -----------------    ------------------
Operating Expenses
  Operation:
    Fuel used in electric generation and
       purchased electricity.........................................                64,316                57,294
    Purchased natural gas............................................                14,868                12,201
    Purchased petroleum..............................................                17,087                 3,179
    Other expenses of operation - regulated activities...............                29,828                37,585
    Other expenses of operation - unreg. affiliate activities........                13,328                 4,925
  Depreciation and amortization......................................                 8,558                12,508
  Taxes, other than income tax.......................................                12,394                15,048
  Federal/State income tax...........................................                   711                 4,429
                                                                           -----------------    ------------------
                                                                                    161,090               147,169
                                                                           -----------------    ------------------
Operating Income.....................................................                 5,328                13,757
                                                                           -----------------    ------------------
Other Income and (Deductions)
  Allowance for equity funds used during construction................                    96                     -
  Federal/State income tax...........................................                  (704)                 (123)
  Interest Income....................................................                 4,927                    84
  Other - net........................................................                 2,798                 2,863
                                                                           -----------------    ------------------
                                                                                      7,117                 2,824
                                                                           -----------------    ------------------
Income before Interest Charges.......................................                12,445                16,581
                                                                           -----------------    ------------------
Interest Charges
  Interest on mortgage bonds.........................................                 1,302                 2,997
  Interest on other long-term debt...................................                 3,138                 2,974
  Other interest.....................................................                 4,050                 2,148
  Allowance for borrowed funds used during construction..............                   (76)                 (172)
                                                                           -----------------    ------------------
                                                                                      8,414                 7,947
Preferred Stock Dividends of Central Hudson..........................                   807                   807
Net Income...........................................................                 3,224                 7,827
Dividends Declared on Common Stock...................................                 8,835                 9,049
                                                                           -----------------    ------------------
Balance Retained in the Business.....................................               ($5,611)              ($1,222)
                                                                           =================    ==================
Common Stock:
    Average Shares Outstanding (000s)................................                16,362                16,821

    Earnings Per Share (Basic and Diluted)...........................                 $0.20                 $0.47

    Dividends Declared...............................................                $0.540                $0.540
</TABLE>


                See Notes to Consolidated Financial Statements.

                                       -1-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                               For the 6 Months Ended June 30,
                                                                               2001                      2000
                                                                         ----------------         -------------------
                                                                                    (Thousands of Dollars)
<S>                                                                              <C>                        <C>
Operating Revenues
  Electric.........................................................              $219,551                   $242,324
  Gas..............................................................                78,931                     62,793
  Unregulated Affiliate............................................               110,445                     33,758
                                                                         -----------------        -------------------
      Total Operating Revenues.....................................               408,927                    338,875
                                                                         -----------------        -------------------
Operating Expenses
  Operation:
    Fuel used in electric generation and
       purchased electricity.......................................               122,138                    106,559
    Purchased natural gas..........................................                52,790                     37,030
    Purchased petroleum............................................                56,861                      6,208
    Other expenses of operation - regulated activities.............                61,135                     69,870
    Other expenses of operation - unreg. affiliate activities......                27,695                     11,512
  Depreciation and amortization....................................                18,907                     24,997
  Taxes, other than income tax.....................................                27,332                     31,154
  Federal/State income tax.........................................                12,394                     13,502
                                                                         -----------------        -------------------
                                                                                  379,252                    300,832
                                                                         -----------------        -------------------
Operating Income...................................................                29,675                     38,043
                                                                         -----------------        -------------------
Other Income and (Deductions)
  Allowance for equity funds used during construction..............                   177                         --
  Federal/State income tax.........................................                (2,056)                      (174)
  Interest Income..................................................                 9,532                        301
  Other - net......................................................                 4,624                      5,304
                                                                         -----------------        -------------------
                                                                                   12,277                      5,431
                                                                         -----------------        -------------------
Income before Interest Charges.....................................                41,952                     43,474
                                                                         -----------------        -------------------
Interest Charges
  Interest on mortgage bonds.......................................                 3,872                      6,202
  Interest on other long-term debt.................................                 6,487                      5,677
  Other interest...................................................                 8,584                      4,363
  Allowance for borrowed funds used during construction............                  (140)                      (325)
                                                                         -----------------        -------------------
                                                                                   18,803                     15,917
Preferred Stock Dividends of Central Hudson........................                 1,615                      1,615

Net Income.........................................................                21,534                     25,942
Dividends Declared on Common Stock.................................                17,671                     18,146
                                                                         -----------------        -------------------
Balance Retained in the Business...................................                $3,863                     $7,796
                                                                         =================        ===================
Common Stock:
    Average Shares Outstanding (000s)..............................                16,362                     16,841

    Earnings Per Share (Basic and Diluted).........................                 $1.32                      $1.54

    Dividends Declared.............................................                $1.080                     $1.080
</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 June 30,
                                                                                             2001              2000
                                                                                        -------------      -------------
                                                                                           (Thousands of Dollars)

<S>                                                                                           <C>                <C>
Net Income................................................................                    $3,224             $7,827

Other comprehensive income, net of tax:
   FAS 133 transition adjustment - balance at April 1, 2001 of cumulative
     effect of unrealized gains (losses) at implementation date of
     January 1, 2001.......................................................                     (778)                --
       Less:  reclassification adjustment for gains (losses)
              realized in net income......................................                      (257)                --
       Plus:  change in fair value for transition adjustment amounts......                     1,316                 --
                                                                                        -------------       ------------
              Balance of FAS 133 transition adjustment at June 30, 2001                          795                 --
   FAS 133 - Other deferred unrealized gains (losses).....................                        --                 --
                                                                                        -------------       ------------
Other comprehensive income (loss).........................................                       795                 --
                                                                                        -------------       ------------
Total Comprehensive Income................................................                    $4,019             $7,827
                                                                                        =============       ============
</TABLE>


                                       -3-


<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                For the 6 Months
                                                                                                 Ended June 30,
                                                                                             2001              2000
                                                                                        -------------      -------------
                                                                                           (Thousands of Dollars)

<S>                                                                                           <C>                <C>
Net Income................................................................                  $21,534           $25,942

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......................................                     (792)               --
       Plus:  change in fair value for transition adjustment amounts......                    1,899                --
                                                                                          ---------          --------
              Balance of FAS 133 transition adjustment at June 30, 2001                         795                --
   FAS 133 - Other deferred unrealized gains (losses).....................                       --                --
                                                                                          ---------          --------
Other comprehensive income (loss).........................................                      795                --
                                                                                          ---------          --------
Comprehensive Income......................................................                  $22,329           $25,942
                                                                                          =========          ========
</TABLE>


                                       -4-

<PAGE>

                              CH ENERGY GROUP, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                          June 30,                December 31,
                                                                            2001                      2000
                             ASSETS                                     (Unaudited)                 (Audited)
                                                                    ---------------------      --------------------
                                                                                (Thousands of Dollars)
<S>                                                                             <C>                     <C>
Utility Plant
       Electric..............................................                   $569,364                $1,277,617
       Gas...................................................                    177,165                   172,242
       Common................................................                    102,101                    99,353
       Nuclear fuel..........................................                     46,697                    46,688
                                                                    ---------------------      --------------------
                                                                                 895,327                 1,595,900
       Less:  Accumulated depreciation.......................                    329,766                   668,168
                  Nuclear fuel amortization..................                     42,089                    40,762
                                                                    ---------------------      --------------------
                                                                                 523,472                   886,970
       Construction work in progress.........................                     45,733                    43,882
                                                                    ---------------------      --------------------
               Net Utility Plant.............................                    569,205                   930,852
                                                                    ---------------------      --------------------
Other Property and Plant.....................................                     45,313                    42,979
                                                                    ---------------------      --------------------
Prefunded Pension Costs and Other Investments
        Prefunded Pension Costs..............................                     71,646                    63,390
        Other Investments....................................                     22,146                    23,201
                                                                    ---------------------      --------------------
Total Prefunded Pension Costs and Other Investments..........                     93,792                    86,591
                                                                    ---------------------      --------------------
Intangible Assets............................................                     67,607                    68,458

Current Assets
       Cash and cash equivalents.............................                    332,707                    28,318
       Accounts receivable from customers-net of
             allowance for doubtful accounts.................                     75,185                   109,403
       Accrued unbilled utility revenues.....................                      9,913                    19,751
       Other receivables.....................................                      4,070                     5,352
       Fuel, materials and supplies, at average cost.........                     15,398                    30,629
       Special deposits and prepayments......................                     16,245                    21,608
                                                                    ---------------------      --------------------
                Total Current Assets.........................                    453,518                   215,061
                                                                    ---------------------      --------------------

Deferred Charges and Other Assets
       Regulatory assets ....................................                     69,506                   155,230
       Unamortized debt expense..............................                      4,582                     4,869
       Fair value of derivative instruments..................                     89,372                         -
       Other Assets..........................................                     25,673                    26,933
                                                                    ---------------------      --------------------
                Total Deferred Charges and Other Assets......                    189,133                   187,032
                                                                    ---------------------      --------------------
Accumulated Deferred Income Tax (Net)........................                     45,994                        --
                                                                    ---------------------      --------------------
                          Total Assets.......................                 $1,464,562                $1,530,973
                                                                    ---------------------      --------------------
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       -5-
<PAGE>

                              CH ENERGY GROUP, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                         June 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):
                 6/30/2001   = 16,862,087
                 12/31/2000 = 16,862,087.......................                                $1,686                     $1,686
        Paid-in capital........................................                               351,230                    351,230
        Retained earnings......................................                               151,687                    147,824
        Reacquired capital stock (500,000 shares)..............                               (18,766)                   (18,766)
        Other Comprehensive Income -
            Unrealized Derivative Gains (Losses)...............                                   795                         --
        Capital stock expense..................................                                (1,196)                    (1,232)
                                                                                  --------------------      ---------------------
                Total Common Stock Equity......................                               485,436                    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.........................................                               235,610                    320,369
                                                                                  --------------------      ---------------------
                Total Capitalization...........................                               777,076                    857,141
                                                                                  --------------------      ---------------------
Current Liabilities
        Current maturities of long-term debt...................                                22,500                     62,610
        Notes payable..........................................                                   250                    165,000
        Accounts payable.......................................                                53,177                     63,845
        Accrued interest.......................................                                 3,458                      7,256
        Dividends payable......................................                                 9,643                      9,643
        Accrued vacation.......................................                                 3,900                      4,472
        Customer deposits......................................                                 4,830                      4,637
        Accrued taxes payable..................................                               117,221                      3,087
        Other..................................................                                 5,240                      8,005
                                                                                  --------------------      ---------------------
                Total Current Liabilities......................                               220,219                    328,555
                                                                                  --------------------      ---------------------
Deferred Credits and Other Liabilities
        Regulatory liabilities.................................                               409,999                    118,574
        Operating reserves.....................................                                 6,200                      4,755
        Other..................................................                                51,068                     27,120
                                                                                  --------------------      ---------------------
                Total Deferred Credits and Other Liabilities...                               467,267                    150,449
                                                                                  --------------------      ---------------------
Accumulated Deferred Income Tax ...............................                                    --                    194,828
                                                                                  --------------------      ---------------------
                     TOTAL CAPITALIZATION AND LIABILITIES......                            $1,464,562                 $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 6 Months Ended
                                                                                                 June 30,
                                                                                         2001                 2000
                                                                                   ----------------      --------------
OPERATING ACTIVITIES:                                                                    (Thousands of Dollars)

<S>                                                                                        <C>                 <C>
     Net Income...............................................................             $21,534             $25,942

          Adjustments to reconcile net income to net cash provided by operating
             activities:
                 Depreciation, amortization & nuclear fuel amortization...........          20,915              26,783
                 Deferred income taxes, net.......................................            (304)              2,767
                 Nine Mile 2 Plant deferred finance charges, net..................           1,311              (2,428)
                 Provision for uncollectibles.....................................           1,250               1,250
                 Net accrued/deferred pension costs...............................          (7,492)             (7,040)
                 Net deferred gas costs/gas refunds...............................           1,778               2,227
                 Deferred revenues per 1998 Settlement Agreement..................          10,080               3,213
                 Other, net.......................................................          (3,595)             (8,254)

             Changes in operating assets and liabilities, net:
                 Accounts receivable and unbilled revenues........................          44,088              (8,950)
                 Fuel, materials and supplies.....................................             910               4,588
                 Special deposits and prepayments.................................           5,363               2,233
                 Accounts payable.................................................         (10,668)              1,808
                 Accrued taxes and interest.......................................          82,870              (2,297)
                 Deferred taxes related to sale of plants and NMP2 write-off......        (233,876)                  -
                 Other, net.......................................................          (3,142)             (1,093)
                                                                                   ----------------      --------------
          NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES....................          (68,978)             40,749
                                                                                   ----------------      --------------
INVESTING ACTIVITIES:

          Proceeds from sale of fossil generation plants.........................          713,202                   -
          Additions to plant.....................................................          (29,357)            (27,172)
          Investment activity of unregulated affiliate...........................           (6,905)             (4,203)
          Nine Mile 2 Plant decommissioning trust fund...........................             (434)               (434)
          Other, net.............................................................            4,176                (307)
                                                                                   ----------------      --------------
          NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES....................          680,682             (32,116)
                                                                                   ----------------      --------------
FINANCING ACTIVITIES:

          Proceeds from issuance of long-term debt...............................                -              47,500
          Repayments of short-term debt..........................................         (164,500)             (8,400)
          Retirement and redemption of long-term debt............................         (125,130)            (35,100)
          Dividends paid on common stock.........................................          (17,671)            (18,203)
          Reacquired capital stock...............................................                -              (2,882)
          Issuance and redemption costs..........................................              (14)               (308)
                                                                                   ----------------      --------------
          NET CASH USED IN FINANCING ACTIVITIES..................................         (307,315)            (17,393)
                                                                                   ----------------      --------------
NET CHANGE IN CASH AND CASH EQUIVALENTS.....................................               304,389              (8,760)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR...............................                28,318              20,385
                                                                                   ----------------      --------------
CASH AND CASH EQUIVALENTS - END OF PERIOD...................................              $332,707             $11,625
                                                                                   ================      ==============
Supplemental Disclosure of Cash Flow Information

          Interest paid..........................................................          $15,470             $12,656

          Federal & State income tax paid........................................         $122,500             $13,000
</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 June 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. As of June 30, 2001, $28 million of the $100 million authorized by the
Public Service Commission of the State of New York (PSC) under the Settlement
Agreement (described under such caption) has been transferred from Central
Hudson to the competitive business subsidiaries of Central Hudson Energy
Services, Inc. (CH Services), an unregulated affiliate of the Corporation. Those
competitive business subsidiaries are described in Item 1 of the Corporation's
10-K Report under the caption "Affiliates of the Corporation."

RATE PROCEEDINGS - ELECTRIC AND GAS

         Reference is made to Note 2 - "Regulatory Matters" to the Consolidated
Financial Statements of the Corporation's 10-K Report under the caption "Rate
Proceedings - Electric and Gas." On August 1, 2000, Central Hudson filed a major
rate and restructuring proposal with the PSC. On April 24, 2001, the
Administrative Law Judge (ALJ) assigned to this proceeding issued a recommended
decision addressing Central Hudson's and other parties' positions. Central
Hudson filed its response to the ALJ's decision on May 15, 2001. It was expected
that new electric and gas delivery prices resulting from this filing would go
into effect on July 1, 2001; however, by Order of the PSC issued and effective
June 25, 2001, the suspension period for these new prices has been extended
through August 31, 2001. The Corporation can make no prediction as to what
determinations the PSC will ultimately make with respect to this proceeding.

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
business affiliates of 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.

                                       9
<PAGE>

CH Energy Group, Inc. Segment Disclosure - FAS 131

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                  Quarter Ended June 30, 2001                       Six Months Ended June 30, 2001
---------------------------------------------------------------------------------------------------------------------------------
                            Regulated              Unreg.       Total             Regulated              Unreg.         Total
---------------------------------------------------------------------------------------------------------------------------------
                       Electric       Gas                                    Electric        Gas
---------------------------------------------------------------------------------------------------------------------------------
<S>                    <C>           <C>          <C>          <C>           <C>           <C>          <C>           <C>
Revenues from
external customers     $104,285      $25,241      $36,803      $166,329      $219,513      $78,686      $110,445      $408,644
---------------------------------------------------------------------------------------------------------------------------------
Intersegment revenues        12           77           --            89            38          245            --           283
---------------------------------------------------------------------------------------------------------------------------------
       Total Revenues  $104,297      $25,318      $36,803      $166,418      $219,551      $78,931      $110,445      $408,927
---------------------------------------------------------------------------------------------------------------------------------
Earnings Per Share     $   0.16      $  0.15      $ (0.11)     $   0.20      $   0.59      $  0.57      $   0.16      $   1.32
---------------------------------------------------------------------------------------------------------------------------------


---------------------------------------------------------------------------------------------------------------------------------
                                  Quarter Ended June 30, 2000                       Six Months Ended June 30, 2000
---------------------------------------------------------------------------------------------------------------------------------
                            Regulated              Unreg.       Total             Regulated              Unreg.         Total
---------------------------------------------------------------------------------------------------------------------------------
                       Electric       Gas                                    Electric        Gas
---------------------------------------------------------------------------------------------------------------------------------
Revenues from
external customers     $124,157      $21,443      $14,788      $160,388      $242,273      $61,865       $33,758      $337,896
---------------------------------------------------------------------------------------------------------------------------------
Intersegment revenues        27          511           --           538            51          928            --           979
---------------------------------------------------------------------------------------------------------------------------------
       Total Revenues  $124,184      $21,954      $14,788      $160,926      $242,324      $62,793       $33,758      $338,875
---------------------------------------------------------------------------------------------------------------------------------
Earnings Per Share     $   0.42      $  0.10      $ (0.05)     $   0.47      $   1.14      $  0.45       $ (0.05)     $   1.54
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       10

<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 re-designated 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 June 30, 2001
is $87.4 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 and the

                                       11

<PAGE>

fixed prices stipulated in the TPA. The total net gain (realized and unrealized)
year-to-date associated with settled and open derivatives is $87.6 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 and part of its heating oil
inventory. These hedges have been highly effective and no gains or losses from
ineffectiveness were recorded during the three months ended June 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 $795,000 at June 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 $2.9 million related to derivatives. The
total fair value of CH Service's derivatives at June 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 related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a

                                       12

<PAGE>

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 as to its ultimate effect(s) on the financial condition, results of
operations and cash flows of the Corporation and/or its affiliates.

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 ends October
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.

                                       13

<PAGE>

BUSINESS COMBINATIONS AND INTANGIBLE ASSETS - ACCOUNTING FOR GOODWILL

         On February 14, 2001, the FASB, issued for public comment its tentative
decisions on the accounting for goodwill in a limited Exposure Draft, "Business
Combinations and Intangible Assets - Accounting for Goodwill". The Exposure
Draft focused on the accounting for goodwill and other purchased intangible
assets and the fundamental issues related to the methods of accounting for
business combinations, including whether or not there is a need for two separate
and distinct methods. Under the proposal, goodwill would not be amortized but
would be reviewed for impairment.

         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
does not presently affect the Corporation but will be applied when applicable.

         Statement 142 requires that goodwill no longer be amortized to
earnings, but instead be reviewed for impairment. The amortization of goodwill
ceases upon adoption of the Statement, which for most companies, 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.

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.

                                       14
<PAGE>

         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 not material for the quarter and the six months ended June 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 June 30, 2001 is as follows:

                                       15
<PAGE>

                                      Weighted
                                      Average
                                      Exercise            Remaining
                           Shares      Price          Contractual Life
                           -------------------------------------------
Outstanding at 1/1/01      30,300      $31.94            8 1/2 years
          Granted          59,900       44.06            9 1/2 years
          Exercised            --          --
          Forfeited            --          --
Outstanding at 6/30/01     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
June 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 six months of 2001
contributed to the increase in the book value of common stock from $29.38 at
December 31, 2000 to $29.67 at June 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 60.7% at June 30, 2001.

         During the 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 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 their normal maturity date of June 13,
2001 in the amount of $40 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 for
borrowing up to $170 million through December 4, 2001.

                                       16
<PAGE>

         Central Hudson has $50 million of committed short-term credit
facilities available and has also entered into a revolving credit agreement with
several commercial banks. Authorization from the PSC limits the short-term
borrowing amount Central Hudson may have outstanding, at any time, to $52
million in the aggregate.

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

         At June 30, 2001, the Corporation had $250,000 of short-term debt
outstanding. Investments in short-term securities, including cash and cash
equivalents, were $332.7 million at June 30, 2001.

EARNINGS PER SHARE
------------------

         Earnings per share of common stock were $.20 for the second quarter of
2001, as compared to $.47 for the second quarter of 2000, a decrease of 57%.
Earnings per share of common stock were $1.32 for the six months ended June 30,
2001, as compared to $1.54 for the first six months of 2000, a decrease of 14%.

         The decrease in earnings per share for the quarter ended June 30, 2001,
as compared to the same period in 2000, resulted primarily from the net effect
of eliminating all costs associated with Central Hudson's fossil generating
plants and its investment in the fossil plants and the Nine Mile Point 2 (NMP-2)
nuclear plant, effective February 1, 2001. It is anticipated that the reduction
in Central Hudson's earnings in subsequent quarters will be less due to the
effect of including deferred amounts, which is expected to be approved by the
PSC in the pending restructuring case after August 31, 2001.

         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 second quarter of 2001 incurred by its oil distribution
subsidiaries (the largest 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 Services' generating plants.

         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 3% increase in own
territory electric sales resulting from an increase in the average number of
residential and commercial customers.

                                       17

<PAGE>

         In addition, there was an increase in Central Hudson's gas net
operating revenues (net of the cost of gas and revenue taxes) due primarily to a
4% increase in own territory firm sales. Increases in residential and commercial
sales reflect increased heating sales due to colder weather experienced in the
first part of the quarter ended June 2001 as compared to the same period last
year and also, an increase in the average number of residential and commercial
customers.

         The reduction in earnings for the first six months of 2001 compared to
the same period in the year 2000 reflects the five-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 NMP-2. 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 NMP-2.
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 $.21 ahead of last year on a revenue
increase of 323%. 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
increase residential and commercial sales during the early part of the six-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 June 30, 2001, and consequently, the repurchase program did not
affect financial results for the quarter ended June 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
six-month periods ended June 30, 2001 to the three-month and six-month periods
ended June 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.

                                       18
<PAGE>

OPERATING REVENUES

         Operating revenues increased $5.5 million (3%) for the second quarter
of 2001 as compared to the second quarter of 2000, and increased $70.1 million
for the first six months of 2001 as compared to the first six months of 2000.
Details of these revenue changes by electric, gas and unregulated businesses are
as follows:

                                  INCREASE (DECREASE) FROM PRIOR PERIOD
                               -------------------------------------------
                                              SECOND QUARTER
                               -------------------------------------------
                                ELECTRIC            GAS        UNREGULATED
                                --------          -------      -----------
                                          (Thousands of Dollars)
Customer Sales*............     $(55,663)         $(1,594)**     $22,015
Sales to Other Utilities...      (16,759)          (1,347)
Fuel and Gas Cost
 Adjustment................       54,563            6,233             --
Deferred Revenues..........       (2,088)***          156             --
Miscellaneous..............           60              (84)            --
                                 -------         --------         ------
     Total.................     $(19,887)         $ 3,364        $22,015
                                 =======          =======         ======

                                  INCREASE (DECREASE) FROM PRIOR PERIOD
                                      SIX MONTHS ENDED JUNE 30, 2001
                               -------------------------------------------
                                ELECTRIC            GAS         UNREGULATED
                                --------          -------       -----------
                                          (Thousands of Dollars)
Customer Sales*............     $(78,805)         $(2,222)**     $76,687
Sales to Other Utilities...      (19,924)          (2,029)
Fuel and Gas Cost
 Adjustment................       81,766           18,933             --
Deferred Revenues..........       (5,740)***        1,622             --
Miscellaneous..............          (70)            (166)            --
                                --------          -------        -------
     Total.................     $(22,773)         $16,138        $76,687
                                ========          =======        =======

  *  Includes delivery of electricity and gas supplied by others.
 **  Both firm and interruptible revenues.
***  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 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 NMP-2
investment.

         The increase in gas revenues 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

                                       19
<PAGE>

revenues from interruptible sales and from sales to other utilities and
marketers.

         Revenues for CH Services increased $22.0 million for the quarter ended
June 30, from $14.8 million in 2000 to $36.8 million in 2001, and increased
$76.7 million for the first six months ended June 30 from $33.7 in 2000 to
$110.4 in 2001. The increase in revenues is largely attributable to the oil
distribution companies. The increase primarily reflects a growth in sales from
the acquired companies 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 kilowatt-hour sales of electricity within Central Hudson's
service territory increased 3% and firm sales of natural gas increased 4% in the
second quarter of 2001 as compared to the second quarter of 2000. For the first
six months ended June 30, 2001, sales of electricity within Central Hudson's
service territory increased 4% and firm sales of natural gas increased 8%.
Changes in sales from last year by major customer classifications including
energy supplied by others are set forth below.

                               INCREASE (DECREASE) FROM PRIOR PERIOD
                          ----------------------------------------------
                              SECOND QUARTER        6 MOS. ENDED 6/30/01
                          ----------------------    --------------------
                          ELECTRIC         GAS      ELECTRIC       GAS
                          --------       -------    --------     -------

Residential............       3%           12 %        6 %          9 %
Commercial.............       5             8          5           12
Industrial.............       2             5          1           (1)
Interruptible..........      N/A          (36)        N/A         (41)

         Billing heating degree days were 7% higher for the three months ended
June 30, 2001 when compared to the same period in 2000 and 9% higher for the six
months ended June 30, 2001 as compared to the same period in 2000. Cooling
degree days were 6% higher for both the quarter and six months ended June 30,
2001 when compared to the same periods in 2000.

         Interruptible gas sales decreased in both the second quarter and the
first six months of 2001 due largely to the cost of gas compared to residual oil
and a reduction in boiler gas sales for electric generation.

                                       20
<PAGE>


OPERATING EXPENSES
------------------

         Total operating expenses for the second quarter of 2001 increased $13.9
million from the comparable period in 2000, and for the six months ended June
30, 2001 they increased $78.4 million from the same period in 2001.

         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 NMP-2 plant, the remaining cost of which was
recovered using sale proceeds. Partially offsetting the reductions is a net
increase of $9.1 million in the second quarter and $30.8 million in the six
months ended June 30, 2001 as compared to the same periods in the year 2000, in
purchased electricity and purchased natural gas costs mitigated by a decrease in
the cost of fuel used in electric generation resulting from the sale of the
plants. 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. Petroleum and natural gas costs
increased by $13.9 million and $50.7 million for the three and six-month periods
as compared to the same periods in 2000.

         Other expenses of operation, excluding the above, increased $8.4
million and $16.2 million for the three and six-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 June 22, 2001, the Board of Directors of
the Corporation declared a quarterly dividend of $.54 per share, payable August
1, 2001 to shareholders of record as of July 10, 2001.

                                       21
<PAGE>

OTHER MATTERS
-------------

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 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 second quarter of 2001, the
Corporation's exposure to market risk was not material to its financial position
or results of operations.

                                       22
<PAGE>

                           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 July 25, 2001, 73 new cases involving asbestos have been
brought against Central Hudson of the type described under the caption. As of
that date, of the 2,652 cases brought against Central Hudson, 1,099 remain
pending. Of the 1,553 cases no longer pending against Central Hudson, 1,416 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 asbestos cases 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.

Item 5.      Other Information

         (a) 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 sale of the interests of
the cotenant owners in the Nine Mile 2 Plant. Closing of the sale is now
expected to occur before the end of 2001.

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.

                                       23
<PAGE>

         (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: August 9, 2001








                                       24

<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.