<PAGE>                      FORM 10-Q

                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, 1998
                                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...................................1-3268

             CENTRAL HUDSON GAS & ELECTRIC CORPORATION        
        (Exact name of registrant as specified in its charter)

           NEW YORK                              14-0555980  
(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 (914) 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 $5.00 per share; 16,999,387 shares
outstanding as of June 30, 1998.

            CENTRAL HUDSON GAS & ELECTRIC CORPORATION

          FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1998

                              INDEX




       PART I - FINANCIAL INFORMATION                     PAGE

Item 1 - Consolidated Financial Statements                  

         Consolidated Statement of Income -                
          Three Months Ended June 30, 1998 and 1997         1

         Consolidated Statement of Income -
          Six Months Ended June 30, 1998 and 1997           3
                                                            
         Consolidated Balance Sheet - June 30, 1998       
          and December 31, 1997                             5

         Consolidated Statement of Cash Flows -
          Six Months Ended June 30, 1998 and 1997           8

         Notes to Consolidated Financial Statements        11

Item 2 - Management's Discussion and Analysis of
          Financial Condition and Results of 
          Operations                                       15


        PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                 24

Item 5 - Other Information                                 25

Item 6 - Exhibits and Reports on Form 8-K                  26

Signatures                                                 28





                  PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                 CONSOLIDATED STATEMENT OF INCOME
                           (UNAUDITED)
                                        For the 3 Months Ended 
                                                 June 30,
                                            1998         1997  
                                          (Thousands of Dollars)
Operating Revenues
 Electric.............................. $   90,319    $  90,853
 Gas...................................     16,681       24,216
  Total - own territory................    107,000      115,069
 Electric sales to other utilities.....      4,717        3,503
 Gas sales to other utilities..........        389           32
                                           112,106      118,604
Operating Expenses
 Operation:
  Fuel used in electric generation.....     16,642       13,274
  Purchased electricity................     11,286       12,509
  Purchased natural gas................      6,896       13,028
  Other expenses of operation..........     23,836       25,378
 Maintenance...........................      6,792        7,080 
 Depreciation and amortization.........     11,413       10,904 
 Taxes, other than income tax..........     15,329       15,740 
 Federal income tax....................      5,508        5,849
                                            97,702      103,762

Operating Income.......................     14,404       14,842

Other Income and Deductions
 Allowance for equity funds 
  used during construction.............         83           82
 Federal income tax....................        293          169
 Other - net...........................      2,094        2,014
                                             2,470        2,265 

Income Before Interest Charges.........     16,874       17,107 

                                - 1 -                 <PAGE>
           
 CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                 CONSOLIDATED STATEMENT OF INCOME
                           (UNAUDITED)
                                        For the 3 Months Ended 
                                                June 30,
                                         1998         1997  
                                       (Thousands, Except for
                                        Per Share Amounts)
    
Interest Charges
 Interest on mortgage bonds............       3,559       3,559
 Interest on other long-term debt......       2,268       2,299
 Other interest........................         881         610
 Allowance for borrowed funds 
  used during construction.............        (101)        (51)
 Amortization of expense on debt.......         226         226

                                              6,833       6,643


Net Income.............................      10,041      10,464
 
Dividends Declared on Cumulative
 Preferred Stock.......................         807         807
Income Available for Common Stock......       9,234       9,657
Dividends Declared on 
 Common Stock..........................       9,172       9,332

Balance Retained in the Business.......  $       62   $     325


Common Stock:
 Average Shares Outstanding (000s).....      17,060      17,475

 Earnings Per Share on Average Shares                     
 Outstanding...........................       $.54        $.55

 Dividends Declared....................       $.54        $.535

         See Notes to Consolidated Financial Statements.

                                  - 2 -<PAGE>
          
          CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                 CONSOLIDATED STATEMENT OF INCOME
                           (UNAUDITED)

                                        For the 6 Months Ended 
                                                 June 30,
                                            1998         1997  
                                          (Thousands of Dollars)
Operating Revenues
 Electric.............................. $  191,631    $ 195,772
 Gas...................................     52,171       66,745
  Total - own territory................    243,802      262,517
 Electric sales to other utilities.....     11,571        7,864
 Gas sales to other utilities..........        614           98
                                           255,987      270,479
Operating Expenses
 Operation:
  Fuel used in electric generation.....     36,875       28,206
  Purchased electricity................     22,649       27,467
  Purchased natural gas................     26,044       38,395
  Other expenses of operation..........     48,132       49,633
 Maintenance...........................     12,335       12,876 
 Depreciation and amortization.........     22,662       21,808 
 Taxes, other than income tax..........     32,537       33,439 
 Federal income tax....................     16,346       18,012
                                           217,580      229,836

Operating Income.......................     38,407       40,643

Other Income and Deductions
 Allowance for equity funds 
  used during construction.............        190          183
 Federal income tax....................        573          360
 Other - net...........................      3,500        3,880
                                             4,263        4,423 

Income Before Interest Charges.........     42,670       45,066 







                                   - 3 -
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                 CONSOLIDATED STATEMENT OF INCOME
                           (UNAUDITED)

                                        For the 6 Months Ended 
                                                June 30,
                                           1998         1997  
                                         (Thousands, Except for
                                           Per Share Amounts)
    
Interest Charges
 Interest on mortgage bonds............       7,118       7,118
 Interest on other long-term debt......       4,350       4,381
 Other interest........................       1,772       1,278
 Allowance for borrowed funds 
  used during construction.............        (231)       (113)
 Amortization of expense on debt.......         453         453

                                             13,462      13,117


Net Income.............................      29,208      31,949
 
Dividends Declared on Cumulative
 Preferred Stock.......................       1,614       1,614
Income Available for Common Stock......      27,594      30,335
Dividends Declared on 
 Common Stock..........................      18,334      18,607

Balance Retained in the Business.......  $    9,260   $  11,728


Common Stock:
 Average Shares Outstanding (000s).....      17,146      17,504

 Earnings Per Share on Average Shares                       
   Outstanding.........................       $1.61       $1.73

 Dividends Declared....................      $1.075      $1.065

         See Notes to Consolidated Financial Statements.

                                   - 4 - <PAGE>
          
                 CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                    CONSOLIDATED BALANCE SHEET
                                    June 30,      December 31,
                                       1998          1997       
                                    (Unaudited)     (Audited) 
                                      (Thousands of Dollars)
          ASSETS
Utility Plant
 Electric.......................    $1,199,603    $1,193,735
 Gas............................       153,229       151,222
 Common.........................        93,825        91,522
 Nuclear fuel...................        42,301        37,262
                                     1,488,958     1,473,741
 Less: Accumulated depreciation.       580,744       560,304
       Nuclear fuel amortization        33,892        33,059
                                       874,322       880,378
 Construction work in progress..        58,331        52,413
   Net Utility Plant............       932,653       932,791
Investments and Other Assets
 Prefunded Pension Costs........        31,877        23,536
 Other..........................        16,596        14,958
   Total Investments and 
    Other Assets................        48,473        38,494
Current Assets
 Cash and cash equivalents......         3,295         9,054
 Accounts receivable from 
  customers-net of allowance for
  doubtful accounts.............        44,801        49,643
 Accrued unbilled utility 
  revenues......................         8,869        16,229
 Other receivables..............         4,544         2,073
 Fuel, materials and supplies, 
  at average cost...............        21,099        24,100
 Special deposits and 
  prepayments...................        12,550        14,210
   Total Current Assets.........        95,158       115,309
Deferred Charges
 Regulatory assets..............       127,840       139,236
 Unamortized debt expense.......         4,806         5,002
 Other..........................        17,238        21,258
   Total Deferred Charges.......       149,884       165,496
Total Assets....................    $1,226,168    $1,252,090
         See Notes to Consolidated Financial Statements.

                                   - 5 -
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                    CONSOLIDATED BALANCE SHEET
                                      June 30,     December 31,
                                        1998          1997    
                                    (Unaudited)     (Audited) 
                                     (Thousands of Dollars)
                   LIABILITIES and CAPITALIZATION
Capitalization 
 Common Stock Equity
  Common stock, 30,000,000 shares
  authorized; shares issued
  ($5 par value):
  1998 - 17,554,987
  1997 - 17,554,987............     $   87,775      $   87,775
 Paid-in capital...............        284,465         284,465
 Retained earnings.............        129,800         120,540
 Reacquired capital stock......        (21,239)         (9,398)
 Capital stock expense.........         (6,241)         (6,278)
   Total Common Stock Equity...        474,560         477,104

 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................        340,792         361,829

    Total Capitalization.......        871,382         894,963

Current Liabilities
 Current maturities 
  of long-term debt............         21,549           1,317
 Accounts payable..............         15,933          24,368
 Accrued taxes and interest....          5,266           3,240
 Dividends payable.............          9,983          10,052
 Accrued vacation..............          4,400           4,339
 Customer deposits.............          4,082           4,001
 Other.........................          5,033           6,545
   Total Current Liabilities...         66,246          53,862


                                - 6 -
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                    CONSOLIDATED BALANCE SHEET
                                       June 30,    December 31,
                                        1998          1997    
                                    (Unaudited)     (Audited) 
                                     (Thousands of Dollars)
                   LIABILITIES and CAPITALIZATION

Deferred Credits and Other
 Liabilities
 Regulatory liabilities........         70,646          81,271
 Operating reserves............          4,728           6,582
 Other.........................         10,617          10,019
   Total Deferred Credits and
    Other Liabilities..........         85,991          97,872

Accumulated Deferred Income Tax        202,549         205,393

Total Capitalization and
 Liabilities...................     $1,226,168      $1,252,090



















         See Notes to Consolidated Financial Statements.

                                - 7 -<PAGE>
           
          CENTRAL HUDSON GAS & ELECTRIC CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                           (UNAUDITED)
                                          For the 6 Months Ended
                                                June 30,  
                                           1998          1997  
                                         (Thousands of Dollars)
Operating Activities
  Net Income..........................   $ 29,208      $ 31,949

  Adjustments to reconcile net income
   to net cash provided by (used in) 
   operating activities:

    Depreciation, amortization and 
      nuclear fuel amortization.......     24,067        24,133
    Deferred income taxes, net........       (308)        1,404
    Allowance for equity funds used 
      during construction.............       (190)         (183)
    Nine Mile 2 Plant deferred 
      finance charges, net............     (2,428)       (2,428)
    Provision for uncollectibles......      1,300         1,650
    Accrued pension costs.............     (5,850)       (4,459)
    Deferred gas costs................      3,148         7,146 
    Deferred gas refunds..............     (1,410)        2,103
    Other - net.......................       (549)       (3,539)

  Changes in current assets and
   liabilities, net:

    Accounts receivable and unbilled
     revenues.................              8,431           829
    Fuel, materials and supplies......      3,001         4,617 
    Special deposits and prepayments..      1,660         1,058
    Accounts payable..................     (8,435)       (3,401)
    Accrued taxes and interest........      2,026         8,825
    Other current liabilities.........     (1,370)       (1,763)

  Net cash provided by operating
   activities.........................     52,301        67,941



                                   - 8 -<PAGE>
          
         CENTRAL HUDSON GAS & ELECTRIC CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                           (UNAUDITED)
                                          For the 6 Months Ended
                                                 June 30,      
                                            1998         1997 
                                          (Thousands of Dollars)

Investing Activities
  Additions to plant..................    (24,692)      (17,684)
  Allowance for equity funds used
   during construction................        190           183
  Net additions to plant..............    (24,502)      (17,501)
  Nine Mile 2 Plant decommissioning 
   trust fund.........................       (434)         (434) 
  Other - net.........................       (449)         (332)
  Net cash used in investing
   activities.........................    (25,385)      (18,267) 

Financing Activities
   Proceeds from issuance of
     long-term debt...................         -            932
   Repayments of short-term debt......         -        (15,600)
   Retirement and redemption of 
    long-term debt....................        (817)        (859)
   Dividends paid on cumulative  
    preferred and common stock........     (20,017)     (20,193)
   Reacquired capital stock...........     (11,841)      (3,535)
   Net cash used in financing 
    activities........................     (32,675)     (39,255)













                                   - 9 -<PAGE>
           
              CENTRAL HUDSON GAS & ELECTRIC CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                           (UNAUDITED)
                                          For the 6 Months Ended
                                                June 30,      
                                            1998        1997 
                                         (Thousands of Dollars)  
Net Change in Cash and Cash 
 Equivalents..........................      (5,759)      10,419  
Cash and Cash Equivalents - 
 Beginning of Year....................       9,054        4,235  
Cash and Cash Equivalents - 
 End of Period........................   $   3,295     $ 14,654

Supplemental Disclosure of
 Cash Flow Information
   Interest paid (net of amounts 
    capitalized)......................   $ 11,872      $ 12,029  
   Federal income tax paid............     14,700        11,111  














       See Notes to Consolidated Financial Statements.
                                - 10 -<PAGE>
          
        CENTRAL HUDSON GAS & ELECTRIC CORPORATION
            Notes to Consolidated Financial Statements

NOTE 1 - GENERAL 

The accompanying consolidated financial statements of Central Hudson Gas &
 Electric Corporation (herein "the Company") are unaudited but, in the
 opinion of management, reflect adjustments (which include normal recurring
 adjustments) necessary for a fair statement of the results 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 Company's Annual Report, on Form 10-K, for the
 year ended December 31, 1997 (Company's 10-K Report).  

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

NOTE 2 - REGULATORY MATTERS 

Amended Settlement Agreement Order

Reference is made to the Amended and Restated Settlement
 Agreement, as described in Item 7 under the caption
 "Competition/Deregulation" and Note 1 - "Regulatory Matters" to
 the Consolidated Financial Statements of the Company's 10-K
 Report, regarding the Company's plan for transition to a
 competitive generation and energy services market (Amended
 Settlement Agreement).  The Company received the final Order
 dated June 30, 1998, confirming the February 19, 1998 (Order)
 adopting terms of the Settlement subject to modifications and
 conditions therein, from the Public Service Commission of the
 State of New York (PSC) approving the Amended Settlement
 Agreement reflecting action taken by the PSC on February 4,
 1998.  In the Order, the PSC adopted the terms of the Amended
 Settlement Agreement, subject to certain modifications and
 conditions.  These modifications and conditions include the
 following: a) the PSC reserves its authority to require an

                                 -11-             <PAGE>
auction and transfer of the Company's fossil-fueled electric
generating assets prior to June 30, 2001, if such accelerated
auction and transfer is found by the PSC to be in the public
interest (at June 30, 1998, the net book value of the Company's
fossil generating assets represented approximately 19% of net
utility plant); b) the PSC directed the PSC Staff to provide
assurance that the Company does not incur imprudent generation
costs which could be avoided by divestiture of fossil-fueled
electric generating assets prior to June 30, 2001; c) "Strandable
costs" of the Company, as defined in the Amended Settlement
Agreement, have been clarified to be those "production
expenditures of the Company made in fulfilling its obligation to
serve and provide safe, reliable electric service to customers
within its franchise territory which are not expected to be
recoverable in a competitive electricity market";  d) the PSC
added a provision dealing with mergers and acquisitions; namely,
pursuant to a petition filed jointly or individually by the
Company, the Company will have the flexibility to retain, on a
cumulative basis, all savings associated with an acquisition or
merger with another utility for a period of five years from the
date of closing of any merger or acquisition up to the amount of
the acquisition premium paid over the lesser of book value or
fair market value of assets merged or acquired, and savings in
excess of the recovery will be disposed of by order of the PSC.

Impact of Amended Settlement Agreement on Accounting Policies

The Amended Settlement Agreement creates certain changes to the
 Company's accounting policies.  The Company's accounting
 policies conform to generally accepted accounting principles,
 which, for regulated public utilities, include Statement of
 Financial Accounting Standards No. 71, "Accounting for the
 Effects of Certain Types of Regulation" (SFAS 71). Under SFAS
 71, regulated companies defer costs and credits on the balance
 sheet as regulatory assets and liabilities when it is probable
 that those costs and credits will be allowed in the rate-making
 process in a period different from when they otherwise would
 have been reflected in income.  These deferred regulatory assets
 and liabilities are then reflected in the income statement in
 the period in which the same amounts are reflected in rates.  If 
 some portion of an enterprise's operations are regulated and     
 meet the appropriate criteria, SFAS 71 is applied only to the    
 regulated portion of the enterprise's operations.

                                 -12-

Upon approval of the Amended Settlement Agreement by the PSC,
 the Company applied the provisions of Statement of Financial
 Accounting Standards No. 101, "Regulated Enterprises -
 Accounting for the Discontinuation of Application of FASB
 Statement No. 71" (SFAS 101) to the fossil-fueled generating
 portion of its business.  Therefore, on February 4, 1998 the
 Company discontinued application of SFAS 71 to its fossil-fueled
 generating portion of its business.  Because the Amended
 Settlement Agreement includes a provision for future recovery of
 costs, the application of SFAS 101 to the fossil-fueled
 generating portion of the Company's business did not have a
 significant effect on the Company's financial position or
 results of operations as of such discontinuance.

Certain regulatory assets and liabilities have been created as a
 result of transactions relating to the Company's fossil-fueled
 generating assets.  At June 30, 1998, net regulatory assets
 associated with the fossil-fueled generating assets totaled $7.0
 million.  The Company did not charge against income any of these
 net regulatory assets because recovery of such assets is
 considered probable under the Amended Settlement Agreement.

Statement of Financial Accounting Standards No. 121, "Accounting
 for the Impairment of Long-Lived Assets and for Long-Lived
 Assets to be Disposed Of" (SFAS 121), requires that long-lived
 assets be reviewed for impairment if the carrying value of the
 asset may not be recoverable.  SFAS 121 also requires that long-lived assets
 to be disposed of be carried at the lower of net
 book value or fair value, and amends SFAS 71 to require that
 regulatory assets be charged against earnings if recovery of
 such assets is no longer probable.  The Company will not
 recognize an impairment of its fossil-fueled generating assets
 because the estimated cash flows from operations, the sale of
 such generating assets, and stranded cost recovery provisions of
 the Amended Settlement Agreement are not expected to be less
 than the net carrying amount of such generating assets.

Formation of Holding Company

Reference is made to the caption "Amended Settlement Agreement"
 of Note 1, "Regulatory Matters," to the Consolidated Financial
 Statements of the Company's 10-K Report and to the Company's
 Current Report, on Form 8-K, dated January 7, 1998, in which a

                                 -13-<PAGE>
proposed new holding company structure for the Company was
disclosed in the context of the PSC's Competitive Opportunities
Proceeding.  Pursuant to the Amended Settlement Agreement, the
Company has begun efforts to form a holding company.  Effective
April 24, 1998, the Company formed a wholly-owned subsidiary
named CH Energy Group, Inc., which, upon shareholder and certain
regulatory approvals, will become the holding company owner of
Central Hudson Gas & Electric Corporation.  The Company has
received regulatory approval from the Federal Energy Regulatory
Commission, the Securities and Exchange Commission and the
Nuclear Regulatory Commission.  Initially, the holding company
will be comprised of Central Hudson Gas & Electric Corporation
and its existing subsidiaries as described under the caption
"Other Matters" of Item 1 of the Company's 10-K Report, with the
exception of Phoenix Development Company, Inc. which will remain
a wholly owned subsidiary of Central Hudson Gas & Electric
Corporation.  The holding company may also establish other
subsidiaries over time.

NOTE 3 - NEW ACCOUNTING STANDARDS - SEGMENT DISCLOSURES

In June 1997, the FASB issued Statement of Financial Accounting
 Standards No. 131, "Disclosures about Segments of an Enterprise
 and Related Information" (SFAS 131).  This Statement establishes
 standards for reporting information about operating segments in
 annual and interim financial statements.  It also establishes
 standards for related disclosures about products and services,
 geographic areas and major customers.  In compliance with the
 requirements of this Statement, the Company will adopt SFAS 131
 in its financial statements for the year ended December 31,
 1998.  The Company does not expect that the adoption of SFAS 131
 will have a significant impact on the reporting requirements of
 the Company.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

The Company faces a number of contingencies which arise during  
  the normal course of business and which have been discussed in
  Note 9,"Commitments and Contingencies", to the Consolidated
  Financial Statements of the Company'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, 1998, and all
  documents previously filed with the Securities and Exchange

                                 -14-<PAGE>
Commission in 1998, there have been no material changes in the
subject matters discussed in said Note 9.

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 1998 
  contributed to the increase in the book value of common stock
  from $27.61 at December 31, 1997 to $27.92 at June 30, 1998;
  however, the common equity ratio decreased from 53.2% at
  December 31, 1997 to 53.1% at June 30, 1998 due to the    
  repurchase of common stock which exceeded the increase in
  retained earnings.

For the six months ended June 30, 1998, the Company repurchased
 280,400 shares of its common stock for $11.8 million under its
 stock repurchase program (See Note 6, "Capitalization-Capital
 Stock", to the Consolidated Financial Statements of the
 Company's 10-K Report).

For the six months ended June 30, 1998, cash expenditures 
 related to the construction program of the Company amounted to 
 $24.3 million.  The amount shown on the Consolidated Statement
 of Cash Flows for "Net additions to Plant" of $24.5 million
 includes the debt portion of $231,000 of the Allowance for Funds
 Used During Construction ("AFDC", as such term is described in
 Note 1, "Regulatory Matters", to the Consolidated Financial
 Statements of the Company's 10-K Report).  The cash requirements
 for such expenditures were funded from internal sources.

The Company has $52 million of committed short-term credit
 facilities available.  In order to diversify its sources of
 short-term financing, the Company has also entered into short-term credit
 facilities with several commercial banks.  At
 June 30, 1998, the Company had no short-term debt outstanding
 and had investments in short-term securities in the amount of
 $3.2 million at the end of June 1998.  Authorization from the
 PSC limits the short-term borrowing amount the Company may have
 outstanding, at any time, to $52 million in the aggregate.  

                                 -15-<PAGE>
Pursuant to Article XXI of the Company's First Mortgage Bond
 Indenture, the Company deposited $722,226 on March 24, 1998 with
 the Indenture Trustee.  Such Article requires the deposit of the
 amount by which depreciation exceeds property additions in each
 calendar year, less property additions made in the subsequent
 calendar year, up to the date of deposit which must be made no
 later than March 31 of each year.  Such deposit may be withdrawn
 at a subsequent date to fund redemptions of outstanding mortgage
 bonds.

As described in Note 7,"Capitalization-Long-Term Debt", to the
 Consolidated Financial Statements of the Company's 10-K Report,
 the Company's interest rate cap agreement expired in April 1998. 
 On April 1, 1998 the Company entered into an interest rate cap
 agreement with a bank, which agreement expires March 31, 2000. 
 Under this agreement, in the event a nationally recognized tax-exempt
 bond interest rate index exceeds 5%, the Company will
 receive a payment from such bank equal to the amount by which
 the actual interest costs on its variable rate 1985 and 1987 New
 York State Energy Research and Development Authority Bonds
 exceeds 5% per annum.  This agreement has the effect of limiting
 the interest the Company must pay on such bonds (on a $115.9
 million notional amount) to the lesser of their actual rate or
 5% per annum.

On May 5, 1998, Moody's Investor Service, Inc. upgraded the
 Company's senior secured debt rating from "A3" to "A2".  The
 Company's other service debt ratings are "A" from Standard and
 Poor's Corporation, Duff & Phelps Credit Rating Co. and
 Fitch/IBCA.

EARNINGS PER SHARE

Earnings per share of common stock were $.54 for the second quarter of
 1998, as compared to $.55 for the second quarter of   
 1997, a decrease of 2%.  Earnings per share of common stock were
 $1.61 for the six months ended June 30, 1998, as compared to
 $1.73 for the six months ended June 30, 1997, a decrease of 7%.

The decrease in earnings per share for the quarter ended
       June 30, 1998, as compared to the same period in 1997,  
       resulted from the combined effect of decreased electric and gas
       net operating revenues.  Electric net operating revenues

                                   -16-<PAGE>
decreased primarily from a reduction in revenues related to fixed
term rentals of certain electric facilities which were concluded
in 1997.  Gas net operating revenues decreased from the same
period last year largely due to a decrease in usage by
residential, commercial and industrial customers.  A 14% decrease
in billing degree days contributed to the reduction in gas net
operating revenues.  This decrease was largely offset by the
favorable impact on earnings of a decrease in the Company's
operation and maintenance costs in 1998 resulting primarily from
a decrease in maintenance costs of the Company's electric
generating plants.  Also, partially offsetting this decrease was
the net effect of various other items, including the positive
earnings effect of a decrease in the number of outstanding shares
of common stock, decreased federal income tax and increased
depreciation expense on the Company's plant and equipment.

The decrease in per share earnings for the six months ended 
 June 30, 1998, as compared to the same period in 1997, resulted
 largely from a decrease in electric net operating revenues due
 primarily to a decrease in sales resulting primarily from milder
 winter weather conditions experienced in the first quarter of
 1998 compared to the same period in 1997.  Also impacting this
 decrease was the net effect of various other items, including
 increased depreciation expense on the Company's plant and
 equipment and decreased operation and maintenance costs in 1998
 resulting primarily from a decrease in maintenance costs of the
 Company's electric generating plants and its electric
 transmission and distribution systems.















                                   -17-<PAGE>
RESULTS OF OPERATIONS

The following table reports the variation in the results of       
 operations for the three months and the six months ended
 June 30, 1998 compared to the same periods for 1997:

                                      3 MONTHS ENDED JUNE 30,   
                                                       INCREASE
                                    1998       1997   (DECREASE)
                                       (Thousands of Dollars)
Operating Revenues............... $112,106   $118,604  $ (6,498)
Operating Expenses...............   97,702    103,762    (6,060)
Operating Income.................   14,404     14,842      (438)
Other Income.....................    2,470      2,265       205 
Income before Interest Charges...   16,874     17,107      (233)
Interest Charges.................    6,833      6,643       190 
Net Income.......................   10,041     10,464      (423)
Dividends Declared on Cumulative
 Preferred Stock.................      807        807      -    
Income Available for Common Stock $  9,234   $  9,657  $   (423)

                                    6 MONTHS ENDED JUNE 30,                    
                                    INCREASE
                                    1998       1997   (DECREASE)
                                       (Thousands of Dollars)

Operating Revenues............... $255,987   $270,479  $(14,492)
Operating Expenses...............  217,580    229,836   (12,256)
Operating Income.................   38,407     40,643    (2,236)
Other Income.....................    4,263      4,423      (160)
Income before Interest Charges...   42,670     45,066    (2,396)
Interest Charges.................   13,462     13,117       345 
Net Income.......................   29,208     31,949    (2,741)
Dividends Declared on Cumulative
 Preferred Stock.................    1,614      1,614      -    
Income Available for Common Stock $ 27,594   $ 30,335  $ (2,741)


OPERATING REVENUES

Operating revenues decreased $6.5 million (6%) for the second
       quarter of 1998 as compared to the second quarter of 1997 and
       decreased $14.5 million (5%) for the six months ended June 30,

                                   -18-<PAGE>
1998.  Details of these revenue changes by electric and gas
departments are as follows:


                           INCREASE (DECREASE) FROM PRIOR PERIOD
                            SECOND QUARTER        SIX MONTHS    
                           Electric     Gas    Electric    Gas  
                                   (Thousands of Dollars)  

Customer Sales....... $ 1,009  $ (5,866)*   $(1,643)   $ (7,566)*
Sales to Other
 Utilities...........   1,215       356       3,707         516
Fuel and Gas Cost     
 Adjustment..........     971    (2,407)      1,109      (8,352)
Deferred Revenues....  (1,978)      746      (2,725)      1,391
Miscellaneous**......    (537)       (7)       (882)        (47)
                      $   680  $ (7,178)    $  (434)   $(14,058)

 *Both firm and interruptible revenues.
**Includes revenues from delivery service of electric for retail  
  access customers and transportation of customer-owned gas.

SALES

The Company's sales vary seasonally in response to weather.
       Generally electric revenues peak in the summer and gas revenues
       peak in the winter.

Total kilowatt-hour sales of electricity within the Company's service
 territory increased 2%, while firm sales of natural gas
 decreased 18%, for the second quarter of 1998 as compared to the
 second quarter of 1997.  For the six months ended June 30, 1998,
 electric sales decreased 1% and firm gas sales decreased 11%
 compared to the same period last year.  Changes in sales from
 last year by major customer classifications, including
 interruptible gas sales, are set forth below.  Also indicated
 are changes related to transportation of customer-owned gas: 







                               -19-

                      INCREASE (DECREASE) FROM PRIOR PERIOD 
                       SECOND QUARTER          SIX MONTHS      
                      Electric    Gas        Electric   Gas 
 Residential........     -       (14)%          (2)%  (10)%
 Commercial.........     5       (14)            2     (9)
 Industrial.........     2       (32)           (2)   (21)
 Interruptible......    N/A      (73)           N/A   (42)
 Transportation of 
  Customer-owned
  Gas...............    N/A       17            N/A     7
 
Delivery service of electric retail access customers first began in the
 quarter ended March 31, 1998.  The related volume was
 .2% of total own territory sales for both the quarter ended
 June 30, 1998, and the six months ended June 30, 1998.

Billing heating degree days were 14% lower for the quarter ended
 June 30, 1998 and 8% lower for the six months ended June 30,
 1998 when compared to the same periods in 1997.

Sales of electricity to residential customers in the second quarter of
 1998 remained flat from the comparable prior year
 period due to the net effect of a 1% decrease in usage per
 customer and a 1% increase in the number of customers. 
 Commercial sales in the second quarter of 1998 increased 5% as
 compared to last year due to the combined effect of a 3%
 increase in usage per customer and a 2% increase in the number
 of customers.  Electric sales to industrial customers increased
 2% in the second quarter of 1998.
  
For the six months ended June 30, 1998, sales of electricity to residential
 customers decreased 2% due to the net effect of a
 3% decrease in usage per customer and a 1% increase in the
 number of customers.  Sales to commercial customers increased
 2% due to the net effect of a 3% increase in the number of
 customers and a 1% decrease in the usage per customer. 
 Electric sales to industrial customers decreased 2% for such
 six-month period.

Sales of gas to residential customers for the second quarter of
 1998 decreased 14% due to the net effect of a 15% decrease in
 usage per customer and a 1% increase in the number of
 customers.  Sales of gas to commercial customers for the second

                               -20-<PAGE>
quarter of 1998 decreased 14% due to the net effect of a 17%
decrease in usage per customer and a 3% increase in the number of
customers.  Firm gas sales to industrial customers decreased 32%
for the second quarter of 1998 when compared to the same period
in 1997, due primarily to decreased usage by a large industrial
customer and the conversion of another large customer to gas
transportation service.

For the six months ended June 30, 1998, residential gas sales decreased
 10% due to a decrease in usage per customer. 
 Commercial gas sales decreased 9% due to the net effect of a
 12% decrease in usage per customer and a 3% increase in the
 number of customers.  Firm gas sales to industrial customers
 for the six months ended June 30, 1998 decreased 21% due
 largely to a decrease in usage by a large industrial customer
 and the conversion of another large customer to gas
 transportation service.

Interruptible gas sales decreased 73% in the second quarter of 1998
 and 42% for the six months ended June 30, 1998, due
 largely  to a decrease in boiler gas usage for electric
 generation.

Transportation gas volumes increased 17% for the second quarter and
 increased 7% for the six months ended June 30, 1998, due
 primarily to the conversion of a large industrial customer to
 gas transportation service.

OPERATING EXPENSES

The following table reports the variation in the operating expenses
 for the three months and six months ended June 30,
 1998 compared to the same periods for the prior year:

                               -21-<PAGE>
 
                          INCREASE (DECREASE) FROM PRIOR PERIOD
                            SECOND QUARTER        SIX MONTHS    
                           Amount    Percent   Amount   Percent 
                                   (Dollars in Thousands)  
Operating Expenses
 Fuel and Purchased
  Electricity............. $ 2,145      8 %    $  3,851     7 %
 Purchased Natural Gas....  (6,132)   (47)      (12,351)  (32)
 Other Expenses of
  Operation...............  (1,542)    (6)       (1,501)   (3)
 Maintenance..............    (288)    (4)         (541)   (4)
 Depreciation and
  Amortization............     509      5           854     4
 Taxes, Other than
  Federal Income Tax......    (411)    (3)         (902)   (3)
 Federal Income Tax.......    (341)    (6)       (1,666)   (9) 
      Total............... $(6,060)    (6)%    $(12,256)   (5)%

Fuel and purchased electricity costs increased $2.1 million (8%) for
 the second quarter of 1998 and $3.9 million (7%) for the
 six months ended June 30, 1998, resulting primarily from
 increased sales of electricity to other utilities for both
 periods.  Purchased natural gas costs decreased $6.1 million
 (47%) for the second quarter of 1998 resulting primarily from
 lower interruptible gas sales for usage as boiler fuel. 
 Purchased natural gas costs decreased $12.4 million (32%) for
 the six months ended June 30, 1998 resulting primarily from the
 combined effect of a decrease in the restoration of deferred
 gas costs related to the Company's gas cost adjustment and a
 reduction in the base cost of gas resulting from decreased own
 territory firm sales.

Other expenses of operation decreased $1.5 million (6%) for the second
 quarter of 1998 from the combined effect of decreased
 pension costs, decreased provisions for uncollectible customer
 accounts and decreased costs associated with injuries and
 damages.

Federal income taxes decreased $1.7 million (9%) for the six
 months ended June 30, 1998, resulting primarily from decreased
 pre-tax operating income when compared to the same period of
 1997.

                               -22-<PAGE>
COMMON STOCK DIVIDENDS

Reference is made to the caption "Common Stock Dividends and Price
 Ranges" on Page 37 of Item 7 to the Company's 10-K
 Report, and which is incorporated by reference in Part II, Item
 5 of said Report, for a discussion of the Company's dividend
 policies.  On June 26, 1998, the Board of Directors of the
 Company declared a quarterly dividend of $.54 per share,
 payable August 1, 1998 to shareholders of record as of July 10,
 1998, representing an increase of $.005, or 1%, over the $.535
 per share level established one year ago.

































                               -23-

                  PART II   OTHER INFORMATION
                                
Item 1.  Legal Proceedings

     Asbestos Litigation.  For a discussion of lawsuits against
the Company involving asbestos, see Note 9   "Commitments and
Contingencies", to the Consolidated Financial Statements of the
Company's 10-K Report under the caption "Asbestos Litigation".

     Since 1987, the Company has been involved as a defendant in
the "mass tort" asbestos litigation in the United States District
Courts for the Southern and Eastern Districts of New York and the
New York State Supreme Court, County of New York.  This
litigation involves thousands of plaintiffs who seek large
amounts of compensatory and punitive damages from numerous
defendants for deaths and injuries allegedly caused by exposure
to asbestos.  As of July 31, 1998, the Company has been a
defendant in approximately 1,400 such individual lawsuits.  Many
of these lawsuits have been disposed of without any payment by
the Company, or for immaterial amounts.  While the amounts
demanded in all the remaining lawsuits total several billions of
dollars, it is the Company's opinion, based on its experience in
such litigation and on information and relevant circumstances
known to it at this time, that these lawsuits will not have a
material adverse effect on the Company's financial position. 
However, if the Company were ultimately held liable under these
lawsuits and insurance coverage were not available, the cost
thereof could have a material adverse effect (a reasonable
estimate of which cannot be made at this time) on the financial
condition of the Company if the Company could not recover all or
a substantial portion thereof in rates.  The Company's insurance
does not extend to punitive damages.

     Former Manufactured Gas Plant Facilities. Reference is made
to Note 9,"Commitments and Contingencies", to the Consolidated
Financial Statements of the Company's 10-K Report, under the
caption "Former Manufactured Gas Plant Facilities", for a
description of a lawsuit filed by the City of Newburgh, New York
(City) against the Company involving one of the Company's former
manufactured gas plant facilities.
     The Company has entered into an agreement ("Agreement") with
the City that will allow the City to re-commence construction at
its sewage treatment plant, which construction was halted in 1994

                               -24-<PAGE>
when the City found contaminants more than 15 feet beneath the
ground surface.  The Agreement provides for the City to construct
a clarifier at the sewage treatment plant and to deal
appropriately with any contaminants that may be encountered
during the construction activities.  The Company will fund these
construction and related activities.  The Agreement also requires
the City to withdraw its damage claims in the litigation that
relate to past and future costs of constructing the clarifier. 
The Company's preliminary estimate of the construction cost,
including all of the related activities required by the
Agreement, is approximately $2,000,000.  A trial date for the
issues remaining in the litigation has been set by the Court for
November 2, 1998.
     The Company is conducting additional studies as part of the
remedial investigation required by its Order on Consent with the
New York State Department of Environmental Conservation (NYSDEC). 
The results of these studies are currently expected to be
provided to the NYSDEC in the Fall of 1998.
     The Company is unable to predict the outcome of the
litigation, nor can it make reasonable estimates of the costs of
remedial actions that may be required by NYSDEC.

Item 5.   Other Information
     Nine Mile 2 Nuclear Generating Station (Nine Mile 2 Plant). 
Reference is made to the caption "Results of Operations   Nuclear
Operations" in Item 7, Part I of the Company's 10-K Report for a
discussion of the proposed plans of Niagara Mohawk Power
Corporation (Niagara Mohawk) and Rochester Gas and Electric
Corporation (both of which are tenants-in-common owners, together
with the Company and others, of the Nine Mile 2 Plant) to
establish a joint nuclear operation company to be known as New
York Nuclear Operating Company (NYNOC).  NYNOC is envisioned to
assume full responsibility for operation of all nuclear plants in
New York State, including the Nine Mile 2 Plant.  On or about
June 15, 1998, New York State Electric & Gas Corporation
(NYSE&G), one of the other owners of the Nine Mile 2 Plant,
commenced an action against Niagara Mohawk (which is the operator
of the Nine Mile 2 Plant) in Supreme Court of the State of New
York, Tompkins County, demanding, among others, judgment to (i)
enjoin Niagara Mohawk from transferring operating responsibility
of the Nine Mile 2 Plant to NYNOC; and (ii) declare that Niagara
Mohawk may not transfer its operational responsibility for the
Nine Mile 2 Plant to NYNOC without NYSE&G's consent.  The Company

                               -25-<PAGE>
can make no prediction as to the outcome of this litigation and
the effect thereof of the NYNOC proposal on the Company.
     Labor Relations.  Reference is made to the Company's 10-K
Report, and to the discussion in Part I, Item 1 thereof under the
subcaption "Labor Relations", of the Company's agreements with
the International Brotherhood of Electrical Workers for its
unionized employees, representing production and maintenance
employees, customer relations representatives, service workers
and clerical employees, excluding persons in managerial,
professional or supervisory positions.  Such Agreements were
renegotiated effective July 1, 1998 and extend five years.  These
Agreements included a separate Labor Agreement for Fossil
Production employees, general wage increases of 3.0 percent in
each of the five years of the Agreements, improvements in the
Company's pension and saving incentive plans; and increased
flexibility for the Company to redeploy employees to other work
activities as necessary.

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.

       (27)                    Financial Data Schedule, pursuant
                               to Item 601(c) of Regulation S-K.

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

     (i)  A Report, dated July 24, 1998, describing (i) the Order
          of the PSC issued and effective June 30, 1998,

                               -26-<PAGE>
          explaining in greater detail the Abbreviated Order of
          the PSC, issued and effective February 19, 1998, which
          February 19, 1998 Order modified and, as modified,
          approved the Amended and Restated Settlement Agreement,
          dated January 2, 1998, entered into among the Company,
          the PSC Staff and others as part of the PSC's
          "Competitive Opportunities" proceeding (ii) the Order,
          dated June 24, 1998, of the Federal Energy Regulatory
          Commission conditionally authorizing the establishment
          of an Independent System Operator by the member systems
          of the New York Power Pool and (iii) effective
          August 1, 1998, Mr. Paul J. Ganci's appointment by the
          Company's Board of Directors as President and Chief
          Executive Officer.  Mr. John E. Mack, III, formerly
          Chairman of the Board and Chief Executive Officer,
          continues as Chairman of the Board. 



















                               -27-<PAGE>
  
                          SIGNATURES

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

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                (Registrant)


                    By:      (SGD.) DONNA S. DOYLE              
                                  Donna S. Doyle
                                   Controller 
                          Authorized Officer and Chief
                               Accounting Officer

Dated: August 5, 1998

























                                 -28-

</PAGE>