EXHIBIT 3

                                  B Y - L A W S

                                       OF

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION

E:\CORPSEC\ALLEN\10Q\CHGE.599                                            5/5/99
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                                TABLE OF CONTENTS

                                   BY-LAWS OF

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION

                                                                           PAGE
                                                                           ----

ARTICLE I.       MEETING OF SHAREHOLDERS                                     1

  Section  1.    Place of Meeting                                            1
  Section  2.    Annual Meeting                                              1
  Section  3.    Special Meeting                                             1
  Section  4.    Notice of Meetings                                          1
  Section  5.    Quorum                                                      2
  Section  6.    Inspectors                                                  2
  Section  7.    Adjournment of Meetings                                     2
  Section  8.    Voting                                                      3
  Section  9.    Record Date                                                 3


ARTICLE II.      BOARD OF DIRECTORS                                          4

  Section  1.    Number and Qualifications                                   4
  Section  2.    Election of Directors                                       4
  Section  3.    Term of Office                                              4
  Section  4.    Resignation and Removal                                     4
  Section  5.    Newly Created Directorships and Vacancies                   5
  Section  6.    Election of Directors by Holders of Preferred Stock         5
  Section  7.    Regular Meetings                                            6
  Section  8.    Special Meetings                                            6
  Section  9.    Notice and Place of Meetings                                6
  Section 10.    Business Transacted at Meetings                             7
  Section 11.    Quorum and Manner of Acting                                 7
  Section 12.    Compensation                                                7
  Section 13.    Indemnification of Officers and Directors                   7
  Section 14.    Committees of the Board                                     8


ARTICLE III.     EXECUTIVE COMMITTEE                                         9

  Section  1.    How Constituted and Powers                                  9
  Section  2.    Removal and Resignation                                     9

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  Section  3.    Filling of Vacancies                                        9
  Section  4.    Quorum                                                      9
  Section  5.    Record of Proceedings, etc.                                10
  Section  6.    Organization, Meetings, etc.                               10
  Section  7.    Compensation of Members                                    10


ARTICLE IV.      OFFICERS                                                   11

  Section  1.    Election                                                   11
  Section  2.    Removal                                                    11
  Section  3.    Resignation of Officers                                    11
  Section  4.    Filling of Vacancies                                       11
  Section  5.    Compensation                                               12
  Section  6.    Chairman of the Board of Directors
                  and Chief Executive Officer                               12
                  Executive Officer

  Section  7.    Vice Chairman of the Board of Directors                    12
  Section  8.    President and Chief Operating Officer                      12
  Section  9.    The Vice Presidents                                        12
  Section 10.    The Treasurer                                              13
  Section 11.    Controller                                                 13
  Section 12.    The Secretary                                              14
  Section 13.    Other Officers                                             14


ARTICLE V.       CONTRACTS, LOANS, BANK ACCOUNTS, ETC.                      15

  Section  1.    Contracts, etc., How Executed                              15
  Section  2.    Loans                                                      15
  Section  3.    Checks, Drafts, etc.                                       15
  Section  4.    Deposits                                                   16
  Section  5.    General and Special Bank Accounts                          16


ARTICLE VI.      CAPITAL STOCK                                              17

  Section  1.    Issue of Certificates of Stock                             17
  Section  2.    Transfer of Stock                                          17
  Section  3.    Lost, Destroyed and Mutilated Certificates                 17




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                                                                           PAGE
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ARTICLE VII.     DIVIDENDS, SURPLUS, ETC.                                   18

  Section  1.    General Discretion of Directors                            18

ARTICLE VIII.    MISCELLANEOUS PROVISIONS                                   19

  Section  1.    Fiscal Year                                                19
  Section  2.    Waiver of Notice                                           19
  Section  3.    Notices                                                    19
  Section  4.    Examination of Books                                       19
  Section  5.    Gender                                                     20


ARTICLE IX.      AMENDMENTS                                                 21

  Section  1.    Amendment by Directors                                     21
  Section  2.    Amendment by Shareholders                                  21

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                  B Y - L A W S

                                       OF

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION

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

                                   ARTICLE I.

                            MEETINGS OF SHAREHOLDERS

SECTION 1.  PLACE OF MEETING.

         All meetings of the shareholders  shall be held at the principal office
of the Corporation in the City of Poughkeepsie, County of Dutchess, State of New
York, or at such other place or places in the State of New York as may from time
to time be fixed by the Board of Directors.

SECTION 2.  ANNUAL MEETING.

         The Annual Meeting of the  shareholders,  for the election of directors
and the  transaction  of such other  business as may brought before the meeting,
shall be held each year on the last  Tuesday in April (or if said day be a legal
holiday,  then on the next succeeding  business day), at such time of day as the
directors may determine.

SECTION 3.  SPECIAL MEETINGS.

         Special  meetings  of the  shareholders  may be  called by the Board of
Directors or by the Chairman of the Board of Directors or by the  President,  or
by shareholders  together holding at least one third of the capital stock of the
Corporation entitled to vote or act with respect thereto upon the business to be
brought before such meeting.

SECTION 4.  NOTICE OF MEETINGS.

         Notice of any annual or special meeting of the shareholders shall be in
writing  and shall be signed by the  Chairman of the Board of  Directors  or the
President or the  Secretary or an Assistant  Secretary.  Such notice shall state
the  purpose or  purposes  for which the  meeting is called and shall  state the
place,  date and hour of the  meeting  and,  unless  it is the  annual  meeting,
indicate that it is being issued by or at the direction of the person or persons
calling  the  meeting.  A copy of the  notice  of any  meeting  shall be  given,
personally or by  first-class  mail, not fewer than ten nor more than sixty days
before the date of the meeting,  provided,  however,  that a copy of such notice
may be given by third-class mail

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not fewer  than  twenty-four  nor more than  sixty  days  before the date of the
meeting,  to each shareholder  entitled to vote at such meeting. If mailed, such
notice is given when deposited in the United States mail,  with postage  thereon
prepaid,  directed to the shareholder at his address as it appears on the record
of  shareholders,  or,  if he  shall  have  filed  with  the  Secretary  of  the
Corporation  a written  request  that  notices  to him be  mailed to some  other
address,  then  directed  to him at such  other  address.  An  affidavit  of the
Secretary of the  Corporation or other person giving the notice or of a transfer
agent of the Corporation that the notice required by this section has been given
shall be supplied at the meeting to which it relates.

SECTION 5.  QUORUM.

         Except as otherwise  provided by statute,  the holders of a majority of
the shares  entitled to vote thereat  shall  constitute a quorum at a meeting of
shareholders for the transaction of any business, provided that when a specified
item of business  is  required to be voted on by a class or series,  voting as a
class,  the  holders of a majority  of the shares of such class or series  shall
constitute a quorum for the transaction of such specified item of business.

SECTION 6.  INSPECTORS.

         The person presiding at a shareholders' meeting may, and on the request
of any  shareholder  entitled  to  vote  thereat  shall,  appoint  one  or  more
inspectors.  Each  inspector,  before entering upon the discharge of his duties,
shall take and sign an oath  faithfully  to execute the duties of  inspector  at
such meeting with strict  impartiality and according to the best of his ability.
The inspectors  shall determine the number of shares  outstanding and the voting
power of each, the shares represented at the meeting, the existence of a quorum,
the  validity  and  effect of  proxies,  and shall  receive  votes,  ballots  or
consents,  hear and determine  questions arising in connection with the right to
vote, count and tabulate all votes,  ballots or consents,  determine the result,
and do such acts as are proper to conduct the election or vote with  fairness to
all  shareholders.  The inspectors  shall make a report in writing of any matter
determined by them and execute a certificate of any fact found by them.

SECTION 7.  ADJOURNMENT OF MEETINGS.

         Any meeting of shareholders  may be adjourned by a majority vote of the
shareholders  present or  represented  by proxy despite the absence of a quorum.
When a meeting of  shareholders  is adjourned to another time or place, it shall
not be  necessary  to give any notice of the  adjourned  meeting if the time and
place to which the meeting is  adjourned  are  announced at the meeting at which
the adjournment is taken,  and at the adjourned  meeting at which a quorum shall
be present,  any business may be  transacted,  and any  corporate  action may be
taken, which might have been transacted or taken if the meeting had been held as
originally called.

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SECTION 8.  VOTING.

         Every  shareholder  of record shall be entitled at every meeting of the
shareholders  to one vote for every  share of stock  standing in his name on the
record of  shareholders  of the  Corporation  unless  otherwise  provided in the
Certificate of  Incorporation  and amend ments thereto and except as provided in
Section 9 of this Article I. Every shareholder  entitled to vote at a meeting of
shareholders may authorize another person or persons to act for him by proxy. No
proxy shall be valid after the expiration of eleven months from the date thereof
unless otherwise  provided in the proxy. A list of shareholders as of the record
date certified by the officer  responsible  for its preparation or by a transfer
agent shall be available at every meeting of shareholders  and shall be produced
upon the request of any  shareholder,  and all persons who appear from such list
to be shareholders entitled to vote thereat may vote at such meeting.

SECTION 9.  RECORD DATE.

         For the purpose of determining the  shareholders  entitled to notice of
or to vote at any meeting of  shareholders  or any  adjournment  thereof,  or to
express  consent to or dissent from any proposal  without a meeting,  or for the
purpose of determining  shareholders entitled to receive payment of any dividend
or the  allotment  of any rights,  or for the purpose of any other  action,  the
Board of Directors  may fix, in advance,  a date as the record date for any such
determination of  shareholders.  Such date shall not be more than sixty nor less
than ten days before the day of such meeting,  nor more than sixty days prior to
any other action.

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                                   ARTICLE II.

                               BOARD OF DIRECTORS

SECTION 1.  NUMBER AND QUALIFICATIONS.

         The number of  directors  constituting  the entire Board shall be nine.
The number of directors  may be  increased,  or decreased to not less than three
nor more than 25, by amendment  of the by-laws  adopted by vote of a majority of
the entire Board of Directors.

         Each  director  shall be at least 18 years of age.  No  person  who has
reached age 70 shall stand for election as a director.

SECTION 2.  ELECTION OF DIRECTORS.

         Except  as  otherwise   required  by  law  or  by  the  Certificate  of
Incorporation  as  amended,  and except as  hereinafter  otherwise  provided  by
Sections 5 and 6 of this Article II,  directors  shall be elected by a plurality
of the votes cast at the annual meeting of shareholders by the holders of shares
entitled to vote at the  election  and shall hold  office  until the next annual
meeting of shareholders.

SECTION 3.  TERM OF OFFICE.

         Each director shall, except as hereinafter provided in Section 4 and in
Section 6 of this Article II, hold office until the  expiration  of the term for
which he is elected and until his successor has been elected and qualified.

SECTION 4.  RESIGNATION AND REMOVAL.

         Any director may resign at any time. Such resignation  shall be made in
writing and shall take effect at the time  specified  therein,  or if no time be
specified,  at the time of its receipt by the Chairman of the Board of Directors
or the Secretary. The acceptance of a resignation shall not be necessary to make
it effective unless so specified therein.  Any director may at any time, with or
without  cause,  be removed  by vote of the  shareholders  at a special  meeting
called for that  purpose.  When,  however,  pursuant  to the  provisions  of the
Certificate of Incorporation as amended,  the holders of the shares of any class
or  series,  voting as a class,  have the right to elect one or more  directors,
such director or directors so elected may be removed only by the applicable vote
of the holders of the shares of that class or series, voting as a class.

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SECTION 5.  NEWLY CREATED DIRECTORSHIPS AND VACANCIES.

         Newly created directorships resulting from an increase in the number of
directors  and  vacancies  occurring  in the Board for any  reason,  except  the
removal of directors  without cause,  and except as provided for in Section 6 of
this  Article II, may be filled by vote of a majority of the  directors  then in
office,  although less than a quorum exists. A vacancy occurring in the Board by
reason of the removal of a director without cause, may be filled only by vote of
the  shareholders,  subject  to the  provisions  of said  Section  6. A director
elected to fill a vacancy shall be elected to hold office for the unexpired term
of his predecessor, and until his successor is elected and qualified.

SECTION 6.  ELECTION OF DIRECTORS BY HOLDERS OF PREFERRED STOCK.

         Anything  in the  by-laws  to the  contrary  notwithstanding:  In  case
dividends on any series of the serial  preferred stock of the Corporation at the
rate or rates  prescribed  for such series  shall not have been paid in full for
periods aggregating one year or more, than, and until full cumulative  dividends
thereon  shall have been paid,  the holders of each such  series  shall have the
right,  together with holders of all other serial  preferred stock in respect to
which the same right shall be  conferred,  to elect a majority of the members of
the Board of Directors of the corporation. Whenever the holders of any series of
serial preferred stock shall become so entitled,  either  separately or together
with the  holders  of other  serial  preferred  stock as  aforesaid,  to elect a
majority of the members of the Board of Directors,  and upon the written request
of the holders of record of at least five  percent of the total number of shares
of serial  preferred  stock  then  outstanding  and  entitled  to such  right of
election,  addressed to the Secretary of the  Corporation,  a special meeting of
the holders of serial preferred stock entitled to such right of election and the
holders of Common  Stock shall be called for the purpose of electing  directors.
At such meeting the holders of serial  preferred stock and the holders of Common
Stock shall vote  separately,  and the holders of serial preferred stock present
in person or by proxy at such meeting shall be entitled to elect, by a plurality
of votes cast by them,  a majority of the members of a new Board of Directors of
the  corporation,  and the holders of Common Stock present in person or by proxy
shall be entitled to elect,  by a plurality of votes cast by them, the remainder
of the new Board of  Directors.  The  persons  so  elected  as  directors  shall
thereupon constitute the Board of Directors of the Corporation, and the terms of
office of the previous  directors of the Corporation shall thereupon  terminate.
The term "a majority of the members of Board of  Directors" as herein used shall
mean one more than one half of the total number of directors provided for by the
by-laws,  regardless of the number then in office,  and in case one half of such
number  shall not be a whole  number,  such one half  shall be the next  smaller
whole  number.  In the event of any vacancy in the Board of Directors  among the
directors  elected by the holders of serial preferred stock, such vacancy may be
filled by the  other  directors  elected  by them,  and if not so filled  may be
filled  by the  holders  of  serial  preferred  stock  entitled  to the right of
election as aforesaid  at a special  meeting of the holders of said stock called
for that purpose, and such a meeting shall be called upon the written request of
at least five  percent of the total number of shares of serial  preferred  stock
then outstanding and entitled to such right of election.  If and when,  however,
full cumulative dividends upon any series of the serial preferred

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stock shall at any subsequent time be paid, then and thereupon such power of the
holders of such series of serial  preferred  stock to vote in the  election of a
majority of the members of the Board of Directors shall cease; subject, however,
to being again revived at any subsequent time if there shall again be default in
payment of  dividends  upon such  series of serial  preferred  stock for periods
aggregating one year or more as aforesaid. Whenever such power of the holders of
all series of serial  preferred stock to vote shall cease, the proper officer of
the  Corporation  may and upon the  written  request of the holders of record of
five  percent of the total  number of shares of Common  Stock  then  outstanding
shall call a special  meeting of the holders of Common  Stock for the purpose of
electing  directors.  At any meeting so called, the holders of a majority of the
Common Stock then outstanding,  present in person or by proxy, shall be entitled
to elect, by a plurality of votes, a new Board of Directors of the  Corporation.
The persons so elected as  directors  shall  thereupon  constitute  the Board of
Directors of the Corporation,  and the terms of office of the previous directors
of the Corporation shall thereupon terminate.

SECTION 7.  REGULAR MEETINGS.

         The directors  shall hold a regular  annual meeting for the election of
officers as soon as practicable  after the  adjournment of the Annual Meeting of
the shareholders,  and, in addition,  regular meetings of the directors shall be
held at such times as the Board of Directors  may by  resolution  determine.  No
notice of the Annual  Meeting  shall be required if held  immediately  after the
Annual Meeting of the shareholders and if a quorum is present.

SECTION 8.  SPECIAL MEETINGS.

         Special  meetings of the directors may be called by the Chairman of the
Board of Directors or by the  President or by any two  directors at any time and
must be called by the Secretary on the written request of any two directors.

SECTION 9.  NOTICE AND PLACE OF MEETINGS.

         Regular meetings shall be held at such place or places either within or
without  the State of New York as the Board of  Directors  may from time to time
determine.  Special meetings shall be held at such place or places either within
or without the State of New York as may be specified in the  respective  notices
of the  meetings.  Except as provided in Section 7 of this Article II, notice of
any regular or special meeting of the directors shall be mailed to each director
addressed  to him at his  residence or usual place of business at least two days
before the day on which the  meeting  is to be held,  or shall be sent to him at
such place by telegraph,  or be delivered personally or by telephone,  not later
than the day before the day on which the meeting is to be held.

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SECTION 10.  BUSINESS TRANSACTED AT MEETINGS.

         Any business may be transacted  and any  corporate  action taken at any
regular or special meeting of the directors  whether stated in the notice of the
meeting or not.

SECTION 11.  QUORUM AND MANNER OF ACTING.

         Any five of the  directors  in office at the time of any meeting of the
Board shall  constitute a quorum and, except as by law otherwise  provided,  the
act of a  majority  of the  directors  present at any such  meeting,  at which a
quorum is present,  shall be the act of the Board of Directors.  In the event it
is necessary to obtain a quorum,  and only in such event,  at the  discretion of
the presiding Board member,  any one or more members of the Board may be present
and participate in a meeting of the Board by means of a conference  telephone or
similar  communications  equipment  allowing  all persons  participating  in the
meeting to hear each other at the same time.  Participation  by such means shall
constitute  presence in person at such meeting.  In the absence of a quorum, the
directors  present may  adjourn the meeting  from time to time until a quorum be
had.  Notice  of  any  adjourned  meeting  need  not  be  given  other  than  by
announcement  at the meeting.  The  directors  shall act only as a Board and the
individual directors shall have no power as such.

SECTION 12.  COMPENSATION.

         The  compensation  of  the  directors,  other  than  employees  of  the
Corporation, for services as directors and as members of committees of the Board
shall be as fixed by the Board from time to time.  Such directors  shall also be
reimbursed  for  expenses  incurred in  attending  meetings of the Board  and/or
committees thereof.

SECTION 13.  INDEMNIFICATION OF OFFICERS AND DIRECTORS.

         Any  person  made,  or  threatened  to be made a party to any action or
proceedings,  whether  civil or  criminal,  by reason  of the fact that he,  his
testator  or  intestate,  is or  was a  director  or  officer  of the  Board  of
Directors,  or officer or  employee of the  Corporation  or serves or served any
other  corporation in any capacity at the request of the  Corporation,  shall be
indemnified  by the  Corporation,  and the  Corporation  may advance his related
expenses, to the full extent authorized or permitted by law. The Corporation may
enter into indemnification  agreements with such directors and officers,  as the
Chairman  of the Board  and/or  President  shall  authorize,  to the full extent
authorized or permitted by law.

SECTION 14.  COMMITTEES OF THE BOARD.

         The Board, by resolution adopted by a majority of the entire Board, may
designate  from  among its  members,  in  addition  to the  Executive  Committee
provided  for in Article III of these  By-Laws,  committees  of the Board,  each
consisting of three or more directors, and

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                                       -8-

each of which  shall have the powers and  duties  prescribed  in the  resolution
designating  such  committees.  Anything in these  By-Laws or in the  resolution
designating such committees to the contrary notwithstanding,  in the event it is
necessary to obtain a quorum,  and only in such event,  at the discretion of the
presiding  committee  member,  any one or more  members of any  committee of the
Board of Directors may  participate in any meeting of such committee by means of
a conference telephone or similar communications  equipment allowing all persons
participating in the meeting to hear each other at the same time.  Participation
by such means shall constitute presence in person at such meeting.

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                                       -9-

                                  ARTICLE III.

                               EXECUTIVE COMMITTEE

SECTION 1.  HOW CONSTITUTED AND POWERS.

         The Board of  Directors,  by  resolution  adopted by a majority  of the
entire Board,  may designate  three or more of the directors,  together with the
Chairman of the Board of Directors,  to constitute  an Executive  Committee,  to
serve at the pleasure of the Board,  which  Committee shall during the intervals
between  meetings of the Board of Directors,  unless  limited by the  resolution
appointing such  Committee,  have authority to exercise all or any of the powers
of the Board of Directors in the  management of the affairs of the  Corporation,
insofar as such powers may lawfully be delegated. The Board may designate one or
more  directors  as  alternate  members of such  Committee,  who may replace any
absent member or members at any meeting of such Committee.

SECTION 2.  REMOVAL AND RESIGNATION.

         Any member of the Executive Committee,  except a member ex officio, may
be  removed  at any time with or  without  cause,  by  resolution  adopted  by a
majority of the entire Board.  Any member of the Executive  Committee may resign
at any time. Such  resignation  shall be in writing and shall take effect at the
time specified therein, or, if no time be specified,  at the time of its receipt
by the  Chairman of the Board of Directors or the  President or  Secretary.  The
acceptance of a resignation  shall not be necessary to make it effective  unless
so specified therein. Any person ceasing to be a director shall ipso facto cease
to be a member of the Executive Committee.

SECTION 3.  FILLING OF VACANCIES.

         Any vacancy among the members of the Executive Committee occurring from
any cause whatsoever may be filled from among the directors by a majority of the
entire Board of Directors.

SECTION 4.  QUORUM.

         A majority of the members of the Executive Committee shall constitute a
quorum. The act of a majority of the members of the Executive  Committee present
at any  meeting at which a quorum is present  shall be the act of the  Executive
Committee.  The members of the Executive Committee shall act only as a committee
and the individual members thereof shall have no powers as such.

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SECTION 5.  RECORD OF PROCEEDINGS, ETC.

         The Executive Committee shall keep a record of its acts and proceedings
and shall report the same to the Board of Directors when and as required.

SECTION 6.  ORGANIZATION, MEETINGS, ETC.

         The Executive  Committee shall make such rules as it may deem expedient
for the regulation and carrying on of its meetings and proceedings.

SECTION 7.  COMPENSATION OF MEMBERS.

         The  members  of the  Executive  Committee  shall be  entitled  to such
compensation as may be allowed them by resolution of the Board of Directors.

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                                      -11-

                                   ARTICLE IV.

                                    OFFICERS

SECTION 1.  ELECTION.

         The Board of Directors,  at its regular annual meeting,  shall elect or
appoint from their number a Chairman of the Board of Directors  and the Chairmen
of Committees of the Board and may elect or appoint a vice chairman of the Board
of Directors and vice chairmen of Committees of the Board,  which officers shall
be officers of the Board; and it shall elect or appoint a President, one or more
Vice Presidents, a Secretary, a Treasurer, and a Controller which officers shall
be officers of the Corporation. Each of said officers, subject to the provisions
of Sections 2 and 3 of this Article,  shall hold office,  if elected,  until the
meeting of the Board following the next Annual Meeting of shareholders and until
his successor  has been elected and  qualified,  or, if appointed,  for the term
specified in the  resolution  appointing  him and until his  successor  has been
elected or  appointed.  Any two or more  offices may be held by the same person,
except the offices of President and Secretary. Should any of the officers of the
Board or the President  cease to be a director,  he shall ipso facto cease to be
such officer.

SECTION 2.  REMOVAL.

         Any officer may be removed  summarily with or without cause at any time
by resolution  of the Board of Directors,  or, except in the case of any officer
elected by the Board of  Directors,  by any  committee or officer upon whom such
power of removal may be conferred by the Board of Directors,  without prejudice,
however, to any rights which any such person may have by contract.

SECTION 3.  RESIGNATION OF OFFICERS.

         Any  officer  may resign at any time by giving  written  notice of such
resignation to the Board of Directors,  its Chairman, the President or Secretary
of the  Corporation.  Such  resignation  shall take effect at the time specified
therein, or, if no time be specified, at the time of its receipt by the Board of
Directors or one of the above-named officers of the Corporation.  The acceptance
of a resignation shall not be necessary to make it effective unless so specified
therein.

SECTION 4.  FILLING OF VACANCIES.

         A vacancy in any office,  from whatever cause arising,  shall be filled
for the  unexpired  portion of the term in the manner  provided in these by-laws
for the regular election or appointment of such officer.

E:\CORPSEC\ALLEN\10Q\CHGE.599                                            5/5/99


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                                      -12-

SECTION 5.  COMPENSATION.

         The  compensation  of the  officers  shall  be  fixed  by the  Board of
Directors or by any committee or superior officer upon whom power in that regard
may be conferred by the Board of Directors.

SECTION 6.  CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER.

         The  Chairman of the Board of  Directors  and Chief  Executive  Officer
shall,  when present,  preside at all meetings of the shareholders and the Board
of  Directors.  He shall be Chairman  of the  Executive  Committee.  He shall be
responsible for direction of the policy of the Board of Directors and shall have
the power and perform the duties necessary to implement such responsibility.

SECTION 7.  VICE CHAIRMAN OF THE BOARD OF DIRECTORS.

         In the  absence of the  Chairman  of the Board of  Directors,  the Vice
Chairman shall,  when present,  preside at all meetings of the  shareholders and
the Board of Directors. He shall have such powers and perform such duties as the
Chairman of the Board of Directors shall delegate to him.

SECTION 8.  PRESIDENT AND CHIEF OPERATING OFFICER.

         The  President  and  Chief  Operating  Officer  shall,  subject  to the
authority of the Chairman of the Board of Directors and Chief Executive Officer,
have the power and perform the duties usually  appertaining to the President and
Chief  Operating  Officer  of a  corporation,  and such  power and duties as the
Chairman of the Board of Directors and Chief  Executive  Officer shall assign to
him.

SECTION 9.  THE VICE PRESIDENTS.

         The Vice Presidents  shall have such duties as may from time to time be
assigned to them by the Board of Directors or the President,  or by the Chairman
of the Board in the  President's  absence.  When  performing  the  duties of the
President,  they  shall  have  all the  powers  of,  and be  subject  to all the
restrictions upon, the President.

SECTION 10.  THE TREASURER.

         The Treasurer shall:

          (a)  Except as otherwise ordered by the Board, have charge and custody
               of, and be responsible  for all funds,  securities,  receipts and
               disbursements of the

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                      -13-

                  Corporation and shall deposit,  or cause to be deposited,  all
                  money and other  valuable  effects in its name in such  banks,
                  trust companies or other  depositaries as shall be selected in
                  accordance with these by-laws;

         (b)      Receive and give receipts for payments made to the Corporation
                  and take and preserve proper receipts for all monies disbursed
                  by it;

         (c)      In general,  perform such duties as are incident to the office
                  of  Treasurer,  or as may be from time to time assigned to him
                  by the Board of  Directors,  the  Chairman of the Board or the
                  President, or as may be prescribed by law or by these by-laws.

         The Treasurer  shall give to the Corporation a bond if, and in such sum
as, required by the Board of Directors, conditioned for the faithful performance
of the  duties of his  office  and the  restoration  to the  Corporation  at the
expiration  of his  term of  office,  or in case of his  death,  resignation  or
removal from office, of all books, papers,  vouchers, money or other property of
whatever kind, in his possession belonging to the Corporation.

SECTION 11.  CONTROLLER.

         The Controller shall:

         (a)      Keep at the office of the Corporation correct books of account
                  of  all  its  business  and   transactions,   subject  to  the
                  supervision and control of the President and Treasurer;

         (b)      Exhibit  at all  reasonable  times his books of  accounts  and
                  records  to any  of  the  directors  upon  application  during
                  business  hours at the  office of the  Corporation  where such
                  books and records are kept;

         (c)      Render a full  statement  of the  financial  condition  of the
                  Corporation  whenever  requested  so  to do by  the  Board  of
                  Directors, the Chairman of the Board or the President; and

         (d)      In  general,  perform  such duties as may be from time to time
                  assigned to him by the Board of Directors, the Chairman of the
                  Board or the President.

SECTION 12.  THE SECRETARY.

         The Secretary shall:

         (a)        Keep the minutes of the meetings of the shareholders,  Board
                    of Directors and Executive  Committee in books  provided for
                    the purpose;

         (b)        See that all notices are duly given in  accordance  with the
                    provisions of these

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                      -14-

                  by-laws or as required by law;

         (c)      Be custodian of the seal of the Corporation and see that it or
                  a facsimile thereof is affixed to all stock certificates prior
                  to their issue,  and that it is affixed to all  documents  the
                  execution of which under the seal of the  Corporation  is duly
                  authorized or which require that the seal be affixed thereto;

         (d)      Have charge of the stock  certificate books of the Corporation
                  and  keep,  or  cause  to  be  kept,  at  the  office  of  the
                  Corporation  or  at  the  office  of  its  transfer  agent  or
                  registrar,  a  record  of  shareholders  of  the  Corporation,
                  containing  the names and addresses of all  shareholders,  the
                  number  and  class of shares  held by each and the dates  when
                  they respectively became the owners of record thereof; and

         (e)      In general,  perform such duties as are incident to the office
                  of  Secretary,  or as may be from time to time assigned to him
                  by the Board of  Directors,  the  Chairman of the Board or the
                  President, or as are prescribed by law or by these by-laws.

SECTION 13.  OTHER OFFICERS.

         Other officers,  including one or more additional Vice Presidents,  may
from time to time be  appointed  by the Board of  Directors or by any officer or
committee  upon whom a power of  appointment  may be  conferred  by the Board of
Directors,  which other  officers shall have such powers and perform such duties
as may be assigned to them by the Board of Directors,  the Chairman of the Board
or the  President  and shall hold office for such terms as may be  designated by
the Board of Directors or the officer or committee appointing them.

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                      -15-

                                   ARTICLE V.

                      CONTRACTS, LOANS, BANK ACCOUNTS, ETC.

SECTION 1.  CONTRACTS, ETC., HOW EXECUTED.

         The Board of Directors,  except as in these by-laws otherwise provided,
may  authorize  any  officer or  officers,  agent or  agents,  to enter into any
contract or execute and deliver any  instrument  in the name of and on behalf of
the  Corporation,  and such  authority  may be general or  confined  to specific
instances,  and,  unless so authorized by the Board of Directors,  no officer or
agent or employee  shall have any power or authority to bind the  Corporation by
any  contract  or  engagement  or to pledge  its  credits or to render it liable
pecuniarily for any purpose or to any amount.

SECTION 2.  LOANS.

         No loans  shall be  contracted  on  behalf  of the  Corporation  and no
negotiable paper shall be issued in its name,  unless  authorized by the vote of
the  Board  of  Directors.  When so  authorized,  any  officer  or  agent of the
Corporation  may effect loans and advances  for the  Corporation  from any bank,
trust company or other institution,  or from any firm, corporation or individual
and for such loans and advances may make,  execute and deliver promissory notes,
bonds or other evidences of indebtedness of the corporation.  When so authorized
any officer or agent of the Corporation,  as security for the payment of any and
all loans,  advances,  indebtedness  and  liabilities  of the  Corporation,  may
pledge,  hypothecate  or  transfer  any and all  stocks,  securities  and  other
personal property at any time held by the Corporation,  and to that end endorse,
assign and  deliver  the same.  Such  authority  may be general or  confined  to
specific instances.  The Board of Directors may authorize any mortgage or pledge
of, or the creation of a security  interest in, all or any part of the corporate
property, or any interest therein, wherever situated.

SECTION 3.  CHECKS, DRAFTS, ETC.

         All checks,  drafts or other orders for the payment of money,  notes or
other evidence of indebtedness  issued in the name of the  Corporation  shall be
signed by the  Treasurer or such other  officer or officers,  agent or agents of
the  Corporation  and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

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                                      -16-

SECTION 4.  DEPOSITS.

         All funds of the  Corporation  shall be deposited  from time to time to
its credit in such banks,  trust companies or other depositaries as the Board of
Directors may select, or as may be selected by an officer or officers,  agent or
agents  of the  Corporation  to whom  such  power,  from  time to  time,  may be
delegated  by the Board of  Directors  and,  for the  purpose  of such  deposit,
checks,  drafts and other  orders for the  payment of money which are payable to
the order of the  Corporation  may be endorsed,  assigned  and  delivered by the
President or a Vice  President,  or the  Treasurer or the  Secretary,  or by any
officer,  agent or employee of the Corporation to whom any of said officers,  or
the Board of Directors, by resolution, shall have delegated such power.

SECTION 5.  GENERAL AND SPECIAL BANK ACCOUNTS.

         The Board of Directors may from time to time  authorize the opening and
keeping of general and special bank accounts with such banks, trust companies or
other  depositaries  as the Board may select and may make such special rules and
regulations with respect thereto, as it may deem expedient.

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                                      -17-

                                   ARTICLE VI.

                                  CAPITAL STOCK

SECTION 1.  ISSUE OF CERTIFICATES OF STOCK.

         Certificates  for shares of the capital stock of the Corporation  shall
be in such form as shall be  approved by the Board of  Directors.  They shall be
numbered,  as nearly as may be, in the order of their  issue and shall be signed
by the  Chairman  of the  Board  of  Directors  or by  the  President  or a Vice
President, and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer,  and sealed with the seal of the Corporation or a facsimile
thereof.  The signatures of the officers upon a certificate may be facsimiles if
the  certificate  is  countersigned  by a  transfer  agent  or  registered  by a
registrar other than the Corporation itself or its employee.

SECTION 2.  TRANSFER OF STOCK.

         Shares of the capital stock of the Corporation shall be transferable by
the holder  thereof in person or by duly  authorized  attorney upon surrender of
the  certificate  or  certificates  for such  shares  properly  endorsed.  Every
certificate  of  stock  exchanged  or  returned  to  the  Corporation  shall  be
appropriately  cancelled.  A person in whose name  shares of stock  stand on the
books of the  Corporation  shall be deemed  the owner  thereof  as  regards  the
Corporation.  The Board of Directors  may make such other and further  rules and
regulations as they may deem necessary or proper concerning the issue,  transfer
and registration of stock certificates.

SECTION 3.  LOST, DESTROYED AND MUTILATED CERTIFICATES.

         The holder of any stock of the Corporation shall immediately notify the
corporation of any loss, destruction or mutilation of the certificates therefor.
The  Corporation  may  issue a new  certificate  of  stock  in the  place of any
certificate theretofore issued by it alleged to have been lost or destroyed, and
the Board of Directors may, in its discretion,  require the owner of the lost or
destroyed  certificate or his legal  representatives  to give the  Corporation a
bond in such sum and with  such  surety  or  sureties,  as they may  require  to
indemnify the  Corporation,  and any  registrar or transfer  agent of its stock,
against any claim that may be made against it by reason of the issue of such new
certificate and against all other liability in the premises.

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                                      -18-

                                  ARTICLE VII.

                            DIVIDENDS, SURPLUS, ETC.

SECTION 1.  GENERAL DISCRETION OF DIRECTORS.

         The Board of  Directors  shall  have the power from time to time to fix
and determine and to vary the amount of working capital of the  Corporation,  to
determine  whether any and, if any, what dividends shall be declared and paid to
the shareholders,  to fix the date or dates for the payment of dividends, and to
fix a time,  not  exceeding 50 days  preceding the date fixed for the payment of
any  dividend,  as a date for the  determination  of  shareholders  entitled  to
receive  payment  of such  dividend.  When  any  dividend  is paid or any  other
distribution  is made,  in whole or in part,  from  sources  other  than  earned
surplus,  it shall be accompanied by a written notice (1) disclosing the amounts
by which such  dividend or  distribution  affects  stated  capital,  surplus and
earned surplus,  or (2) if such amounts are not determinable at the time of such
notice,  disclosing the  approximate  effect of such dividend or distribution as
aforesaid and stating that such amounts are not yet determinable.

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                      -19-

                                  ARTICLE VIII.

                            MISCELLANEOUS PROVISIONS

SECTION 1.  FISCAL YEAR.

         The fiscal year of the Corporation shall be the calendar year.

SECTION 2.  WAIVER OF NOTICE.

         Notice of meeting  need not be given to any  shareholder  who submits a
signed  waiver of  notice,  in person or by proxy,  whether  before or after the
meeting.  The attendance of any shareholder at a meeting, in person or by proxy,
without  protesting prior to the conclusion of the meeting the lack of notice of
such meeting,  shall  constitute a waiver of notice by him.  Notice of a meeting
need not be given to any director who submits a signed waiver of notice  whether
before or after the  meeting,  or who attends the  meeting  without  protesting,
prior thereto or at its  commencement,  the lack of notice to him.  Whenever the
Corporation or the Board of Directors or any committee  thereof is authorized to
take any  action  after  notice to any person or persons or after the lapse of a
prescribed  period of time,  such action may be taken without notice and without
the lapse of such period of time,  if at any time before or after such action is
completed  the  person  or  persons  entitled  to such  notice  or  entitled  to
participate in the action to be taken or, in the case of a  shareholder,  by his
attorney-in-fact, submit a signed waiver of notice of such requirements.

SECTION 3.  NOTICES.

         Whenever by the  by-laws any written  notice is required to be given to
any shareholder,  director or officer,  the same may be given,  unless otherwise
required by law and except as  hereinbefore  otherwise  expressly  provided,  by
delivering it personally to him or by mailing or  telegraphing  it to him at his
last known post  office  address.  Where a notice is mailed or  telegraphed,  it
shall be deemed to have been given at the time it is mailed or telegraphed.

SECTION 4.  EXAMINATION OF BOOKS.

         The Board of Directors  shall,  subject to the laws of the State of New
York have power to determine  from time to time,  whether,  to what extent,  and
under what  conditions and regulations the accounts and books of the Corporation
or any of them  shall  be open to the  inspection  of the  shareholders,  and no
shareholder  shall have any right to inspect any account book or document of the
Corporation  except as conferred by the laws of the State of New York unless and
until  authorized  so  to  do  by  resolution  of  the  Board  of  Directors  or
shareholders of the Corporation.

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                                      -20-

SECTION 5.  GENDER.

         Words  used in  these  by-laws  importing  the  male  gender  shall  be
construed to include the female gender, wherever appropriate.

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                                      -21-

                                   ARTICLE IX.

                                   AMENDMENTS

SECTION 1.  AMENDMENT BY DIRECTORS.

         The Board of Directors  shall have the power without the assent or vote
of the  shareholders  to adopt by-laws,  and except as  hereinafter  provided in
Section 2 of this Article,  and subject to such limitations as may be imposed by
law,  to  rescind,  alter,  amend or repeal by a vote of a majority of the whole
Board any of the by-laws, whether adopted by the Board or by the shareholders.

SECTION 2.  AMENDMENT BY SHAREHOLDERS.

         The shareholders  shall have power to rescind,  alter,  amend or repeal
any by-laws and to adopt by-laws which,  if so expressed,  may not be rescinded,
altered, amended or repealed by the Board of Directors.

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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                                      -22-

         I, Steven V. Lant, Corporate Secretary of Central Hudson Gas & Electric
Corporation,  do hereby  certify that the foregoing is a full,  true and correct
copy of the by-laws of said Corporation as in effect at the date hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand as Corporate  Secretary
of said Corporation and hereunto affixed its corporate seal this 5th day of May,
1999.

                                                 [SGD] STEVEN V. LANT
                                                 -----------------------------
                                                       Corporate Secretary

Amended: April 27, 1999

E:\CORPSEC\ALLEN\10Q\CHGE.599                                             5/5/99


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