FORM 10-Q

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

(Mark One)

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

For the quarterly period ended                   September 30, 2001
                               -----------------
                                       OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to
                               ------------    --------------------

Commission file number                                      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 (845) 452-2000
                                                   --------------

          Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES [ X ] NO [ ]

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

          Common stock, par value $5.00 per share; and the number of shares
outstanding of Registrant's Common Stock, as of September 30, 2001, was
16,862,087. All shares are owned by CH Energy Group, Inc.

<PAGE>


                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION

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

                                     INDEX


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

Item 1 -  Consolidated Financial Statements                                   1

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

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

          Consolidated Balance Sheet - September 30, 2001
           and December 31, 2000                                              3

          Consolidated Statement of Cash Flows -
           Nine Months Ended September 30, 2001 and 2000                      5

          Notes to Consolidated Financial Statements                          6

Item 2 -  Management's Discussion and Analysis of
           Financial Condition and Results of Operations                     14

Item 3 -  Quantitative and Qualitative Disclosure
           about Market Risk                                                 19

     PART II - OTHER INFORMATION
     ---------------------------

Item 1 -  Legal Proceedings                                                  19

Item 6 -  Exhibits and Reports on Form 8-K                                   20

Signatures                                                                   20

Exhibit Index

<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM I - CONSOLIDATED FINANCIAL STATEMENTS

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

                                                           For the 3 Months
                                                          Ended September 30,
                                                          2001           2000
                                                       ---------      ---------
                                                        (Thousands of Dollars)
Operating Revenues
  Electric .........................................   $ 118,388      $ 126,982
  Gas ..............................................      11,121         11,971
                                                       ---------      ---------
    Total - own territory ..........................     129,509        138,953
  Electric Sales to other utilities ................         651         13,644
  Gas Sales to other utilities .....................         151          1,769
                                                       ---------      ---------
                                                         130,311        154,366
                                                       ---------      ---------
Operating Expenses
  Operation:
    Fuel used in electric generation ...............       1,108         24,331
    Purchased electricity ..........................      65,438         36,623
    Purchased natural gas ..........................       5,345          8,221
    Other expenses of operation ....................      23,502         31,876
  Depreciation and amortization ....................       6,325         11,991
  Taxes, other than income tax .....................      10,358         14,505
  Federal/State income tax .........................       5,894          7,875
                                                       ---------      ---------
                                                         117,970        135,422
                                                       ---------      ---------

Operating Income ...................................      12,341         18,944
                                                       ---------      ---------

Other Income and (Deductions)
  Allowance for equity funds used
    during construction ............................         104             (4)
  Federal/State income tax .........................         427            (69)
  Other - net ......................................       2,429          2,548
                                                       ---------      ---------
                                                           2,960          2,475
                                                       ---------      ---------

Income before Interest Charges .....................      15,301         21,419
                                                       ---------      ---------

Interest Charges
  Interest on mortgage bonds .......................         670          2,570
  Interest on other long-term debt .................       2,162          3,591
  Other interest ...................................       2,499          1,665
  Allowance for borrowed funds used
    during construction ............................         (82)          (202)
                                                       ---------      ---------
                                                           5,249          7,624
                                                       ---------      ---------

Net Income .........................................      10,052         13,795

Dividends Declared on Cumulative Preferred Stock ...         807            807
                                                       ---------      ---------

Income Available for Common Stock ..................   $   9,245      $  12,988
                                                       =========      =========

                 See Notes to Consolidated Financial Statements.

                                       1
<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)
                                                          For the 9 Months
                                                         Ended September 30,
                                                         2001           2000
                                                       ---------      ---------
                                                        (Thousands of Dollars)
Operating Revenues
  Electric .........................................   $ 330,283      $ 341,727
  Gas ..............................................      90,000         72,683
                                                       ---------      ---------
    Total - own territory ..........................     420,283        414,410
  Electric Sales to other utilities ................       8,307         41,222
  Gas Sales to other utilities .....................         203          3,850
                                                       ---------      ---------
                                                         428,793        459,482
                                                       ---------      ---------
Operating Expenses
  Operation:
    Fuel used in electric generation ...............      14,765         64,339
    Purchased electricity ..........................     163,332         90,078
    Purchased natural gas ..........................      52,047         42,171
    Other expenses of operation ....................      84,700        101,743
  Depreciation and amortization ....................      20,771         35,989
  Taxes, other than income tax .....................      37,569         45,424
  Federal/State income tax .........................      15,151         21,870
                                                       ---------      ---------
                                                         388,335        401,614
                                                       ---------      ---------

Operating Income ...................................      40,458         57,868
                                                       ---------      ---------

Other Income and (Deductions)
  Allowance for equity funds used
    during construction ............................         281           --
  Federal/State income tax .........................      (1,387)          (216)
  Other - net ......................................       9,326          7,560
                                                       ---------      ---------
                                                           8,220          7,344
                                                       ---------      ---------

Income before Interest Charges .....................      48,678         65,212
                                                       ---------      ---------

Interest Charges
  Interest on mortgage bonds .......................       4,541          8,772
  Interest on other long-term debt .................       8,648          9,267
  Other interest ...................................      10,118          5,447
  Allowance for borrowed funds used
    during construction ............................        (222)          (527)
                                                       ---------      ---------
                                                          23,085         22,959
                                                       ---------      ---------

Net Income .........................................      25,593         42,253

Dividends Declared on Cumulative Preferred Stock ...       2,422          2,422
                                                       ---------      ---------

Income Available for Common Stock ..................   $  23,171      $  39,831
                                                       =========      =========

                 See Notes to Consolidated Financial Statements.

                                       2
<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


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

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

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

Other Property and Plant ..........................         971             973
                                                     ----------      ----------

Prefunded Pension Costs and Other Investments
    Prefunded Pension Costs .......................      75,194          63,390
    Other Investments .............................      16,199          18,199
                                                     ----------      ----------
Total Prefunded Pension Costs and
  Other Investments ...............................      91,393          81,589
                                                     ----------      ----------

Current Assets
    Cash and cash equivalents .....................      82,035          17,279
    Accounts receivable from customers-net
      of allowance for doubtful accounts ..........      45,120          70,072
    Accrued unbilled utility revenues .............       9,893          19,751
    Other receivables .............................       4,441           4,377
    Fuel, materials and supplies,
      at average cost .............................      14,156          27,460
    Special deposits and prepayments ..............      18,850          14,379
                                                     ----------      ----------
        Total Current Assets ......................     174,495         153,318
                                                     ----------      ----------


Deferred Charges and Other Assets
    Regulatory assets .............................      35,201         155,230
    Unamortized debt expense ......................       3,593           4,869
    Fair value of derivative instruments ..........      55,076              --
    Other Assets ..................................       5,012           5,467
                                                     ----------      ----------
        Total Deferred Charges and Other Assets ...      98,882         165,566
                                                     ----------      ----------

Accumulated Deferred Income Tax (Net) .............      17,503              --
                                                     ----------      ----------

            TOTAL ASSETS ..........................  $  916,074      $1,332,298
                                                     ==========      ==========

                 See Notes to Consolidated Financial Statements.

                                       3
<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


                                                     September 30,  December 31,
                                                          2001           2000
               CAPITALIZATION AND LIABILITIES         (Unaudited)     (Audited)
                                                      ----------     ----------
                                                        (Thousands of Dollars)
Capitalization
    Common Stock Equity:
        Common stock, 30,000,000 shares authorized;
          shares issued ($5 par value):
            2001 - 16,862,087
            2000 - 16,862,087 ....................    $   84,311     $   84,311
    Paid-in capital ..............................       174,980        273,238
    Retained earnings ............................           999        114,546
    Capital stock expense ........................        (5,809)        (5,865)
                                                      ----------     ----------
            Total Common Stock Equity ............       254,481        466,230
                                                      ----------     ----------

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

    Long-term Debt ...............................       235,873        320,370
                                                      ----------     ----------
            Total Capitalization .................       546,384        842,630
                                                      ----------     ----------

Current Liabilities
    Current maturities of long-term debt .........            --         62,610
    Notes payable ................................         8,000         25,000
    Accounts payable .............................        24,642         36,719
    Accrued interest .............................         3,142          6,315
    Dividends payable ............................           807            807
    Accrued vacation .............................         3,900          4,472
    Customer deposits ............................         4,912          4,637
    Other ........................................        (3,116)        12,695
                                                      ----------     ----------
            Total Current Liabilities ............        42,287        153,255
                                                      ----------     ----------
Deferred Credits and Other Liabilities
    Regulatory liabilities .......................       271,192        118,574
    Operating reserves ...........................         5,744          4,755
    Other ........................................        50,467         18,636
                                                      ----------     ----------
            Total Deferred Credits and
              Other Liabilities ..................       327,403        141,965
                                                      ----------     ----------

Accumulated Deferred Income Tax (Net) ............            --        194,448
                                                      ----------     ----------


            TOTAL CAPITALIZATION
              AND LIABILITIES ....................    $  916,074     $1,332,298
                                                      ==========     ==========

                 See Notes to Consolidated Financial Statements.

                                       4
<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                          For the 9 Months Ended
                                                              September 30,
                                                            2001         2000
                                                          ---------    --------
OPERATING ACTIVITIES:                                     (Thousands of Dollars)

  Net Income ..........................................   $  25,593    $ 42,253

    Adjustments to reconcile net income to net
      cash provided by operating activities:
        Depreciation, amortization & nuclear
          fuel amortization ...........................      23,737      38,770
        Deferred income taxes, net ....................       2,485       4,457
        Nine Mile 2 Plant deferred finance
          charges, net ................................       1,311      (3,572)
        Provision for uncollectibles ..................       1,875       1,725
        Net accrued/deferred pension costs ............     (11,498)    (10,302)
        Net deferred gas costs/gas refunds ............         237      (1,434)
        Other, net ....................................      16,567      (2,289)

      Changes in operating assets and
        liabilities, net:
        Accounts receivable and unbilled revenues .....      32,873       1,695
        Fuel, materials and supplies ..................      (1,017)      1,787
        Special deposits and prepayments ..............      (4,471)     (8,882)
        Accounts payable ..............................     (12,080)      3,780
        Accrued taxes and interest ....................     (43,613)      5,750
        Deferred taxes related to sale of plants
          and NMP2 write-off ..........................    (233,876)         --
        Other, net ....................................      (3,135)     (1,861)
                                                          ---------    --------

    NET CASH (USED IN) PROVIDED BY
      OPERATING ACTIVITIES .............................   (205,012)     71,877
                                                          ---------    --------

INVESTING ACTIVITIES:

    Proceeds from sale of fossil generation plants ....     713,202          --
    Additions to plant ................................     (40,829)    (41,198)
    Net return of equity from affiliate ...............          --      23,500
    Payments to Nine Mile 2 Plant decommissioning
      trust fund ......................................        (651)       (651)
    Other, net ........................................       3,339        (551)
                                                          ---------    --------

    NET CASH PROVIDED BY (USED IN)
      INVESTING ACTIVITIES ............................     675,061     (18,900)
                                                          ---------    --------

FINANCING ACTIVITIES:

    Proceeds from issuance of long-term debt ..........          --      47,500
    Repayments of short-term debt .....................     (17,000)    (45,000)
    Retirement and redemption of long-term debt .......    (147,630)    (35,100)
    Dividends paid on cumulative preferred
      and common stock ................................     (25,322)    (27,822)
    Special dividend to parent ........................    (212,000)         --
    Issuance and redemption costs of long-term debt ...      (3,341)       (313)
                                                          ---------    --------

    NET CASH USED IN FINANCING ACTIVITIES .............    (405,293)    (60,735)
                                                          ---------    --------

NET CHANGE IN CASH AND CASH EQUIVALENTS ...............      64,756      (7,758)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR .........      17,279      11,756
                                                          ---------    --------

CASH AND CASH EQUIVALENTS - END OF PERIOD .............   $  82,035    $  3,998
                                                          =========    ========


Supplemental Disclosure of Cash Flow Information

    Interest paid .....................................   $  16,712    $ 15,656

    Federal & State income tax paid ...................   $ 266,876    $ 17,800

                 See Notes to Consolidated Financial Statements

                                       5
<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 of operations for the interim
periods presented. These condensed unaudited quarterly consolidated financial
statements do not contain the detail or footnote disclosures concerning
accounting policies and other matters which would be included in annual
consolidated financial statements and, accordingly, should be read in
conjunction with the audited Consolidated Financial Statements (including the
Notes thereto) included in the Company's Annual Report, on Form 10-K, for the
year ended December 31, 2000 (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

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

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

                                       6
<PAGE>


COMPETITIVE OPPORTUNITIES PROCEEDING SETTLEMENT AGREEMENT

     As reported under the caption "Competitive Opportunities Proceeding
Settlement Agreement" in Note 2 to the Consolidated Financial Statements
included in the Company's 10-K Report, the Company had received approval from
its shareholders and regulators to form a holding company. The holding company
restructuring took place on December 15, 1999, at which time the Company became
the wholly-owned subsidiary of CH Energy Group, Inc. (Energy Group). The
competitive business subsidiaries of Energy Group are described in Item 1 of the
Company's 10-K Report under the caption "Other Affiliates of Central Hudson."

PSC PROCEEDINGS

     NINE MILE 2 PLANT: Reference is made to Note 3 - Nine Mile 2 Plant under
the caption "General" to the Consolidated Financial Statements included in the
Company's 10-K Report for a discussion of the proposed sale of the interests of
certain cotenant owners, including the Company, in the Nine Mile 2 Plant.

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

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

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

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

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

                                       7
<PAGE>


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

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

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

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

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

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

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

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

     OTHER MATTERS RELATED TO THE RATE ORDER AND THE NINE MILE 2 ORDER: Also
included in these Orders were approval of the Company to recognize $19.8 million
of tax benefits related to its 2001 power plant sales, offset by $11.4 million
of after tax contributions by the Company to the customer benefit fund, or a net
benefit to shareholders of $8.4 million. The Company will additionally recognize
net income for shareholders under a prior regulatory settlement, as follows:
$3.2 million in 2001, $2.9

                                       8
<PAGE>


million in 2001, $2.0 million in 2002, $5.9 million in 2003 and $5.9 million in
2004. These tax benefits and prior settlement-related amounts are excluded from
the ROE sharing calculation described above.

NOTE 3 - SEGMENTS AND RELATED INFORMATION

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

     The Company's reportable operating segments are its electric and gas
operations. All of the segments operate in New York State.

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

     A material change occurred with the Company's total assets at March 31,
2001 as compared to total assets at December 31, 2000. The net reduction of
$207.4 million related primarily to a decrease in net utility plant for the
electric segment, including the Company's investment in the Nine Mile 2 Plant,
due to the sale of the Company's interests in the Danskammer and Roseton
Generating Plants as follows:

                   ELECTRIC           GAS         SUBSIDIARY            TOTAL
                 -----------        --------      ----------        -----------

3/31/01          $   914,799        $210,015       $      89        $ 1,124,903

12/31/00           1,135,484         196,725              89          1,332,298
                 -----------        --------       ---------        -----------
                 $  (220,685)         13,290       $      --        $  (207,395)
                 ===========        ========       =========        ===========

     The gas segment increased by $13.3 million because the gas regulator
station at these Plants remained the Company's property and was reclassified
from electric to gas.

                                       9
<PAGE>


     Central Hudson Gas & Electric Segment Disclosure - FAS 131

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                     Quarter Ended September 30, 2001         Nine Months Ended September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
                                                  Electric         Gas          Total         Electric         Gas          Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>           <C>            <C>            <C>           <C>
Revenues from external customers                  $119,020       $11,182       $130,202       $338,534       $89,868       $428,402
------------------------------------------------------------------------------------------------------------------------------------
INTERSEGMENT REVENUES                                   19            90            109             56           335            391
------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES                                    $119,039       $11,272       $130,311       $338,590       $90,203       $428,793
------------------------------------------------------------------------------------------------------------------------------------
Income Available for Common Stock                 $  9,067       $   178       $  9,245       $  9,346       $13,825       $ 23,171
------------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                     Quarter Ended September 30, 2000         Nine Months Ended September 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                  Electric         Gas          Total         Electric         Gas          Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>           <C>            <C>            <C>           <C>
Revenues from external customers                  $140,612       $13,294       $153,906       $382,884       $75,160       $458,044
------------------------------------------------------------------------------------------------------------------------------------
INTERSEGMENT REVENUES                                   14           446            460             65         1,374          1,439
------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES                                    $140,626       $13,740       $154,366       $382,949       $76,534       $459,483
------------------------------------------------------------------------------------------------------------------------------------
Income Available for Common Stock                 $ 14,284       $(1,296)      $ 12,988       $ 33,498       $ 6,333       $ 39,831
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       10
<PAGE>


NOTE 4 - NEW ACCOUNTING STANDARDS

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - SFAS 133

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

     The Company uses derivative instruments to hedge the exposure to the
variability in cash flows associated with forecasted sales of gas and forecasted
sales and purchases of electricity. These derivatives are not formally
designated as hedges under the provisions of SFAS 133 because the related gains
and losses are included as part of the Company's commodity cost and/or price
reconciled in its natural gas and electric service charge clauses. The earnings
offset to these derivatives are, therefore, deferred for pass-back to or
recovery from customers under these adjustment mechanisms. The total fair value
of the Company derivatives at September 30, 2001 is $55.1 million due largely to
the conversion, effective July 1, 2001, of a multi-year transition purchase
power agreement (TPA) (see Item 2 of the Company's 10-K Report under the caption
"Load and Capacity") from a physical to a financial agreement. Under the terms
of the modified agreement, the Company will purchase electric energy volumes
covered by the TPA at market and financially net settle with the TPA
counter-party for differences between market prices and the fixed prices
stipulated in the TPA. The total net gain (realized and unrealized) year-to-date
associated with settled and open derivatives is $71.0 million, comprised largely
of unrealized gains associated with the TPA derivative, through October 2004.

                                       11
<PAGE>


PLANT DECOMMISSIONING

     Reference is made to the caption "New Accounting Standards, Other FASB
Projects and NRC Policy Statement" of Note 1 - "Summary of Significant
Accounting Policies," to the Consolidated Financial Statements of the Company's
10-K Report. On July 5, 2001, the Financial Accounting Standards Board (FASB)
issued Statement No. 143, ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS. Initially
started in 1994 as a project to account for the costs of nuclear
decommissioning, the FASB expanded the scope to include similar closure or
removal-type costs in other industries that are incurred at any time during the
life of an asset. That standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged. The Company is reviewing this new accounting standard
and cannot make any prediction at this time as to its ultimate effect(s) on its
financial condition, results of operations and cash flows.

PROPERTY, PLANT AND EQUIPMENT

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

     AcSEC drafted the proposed SOP to address diversity in accounting for
expenditures related to property, plant and equipment (PP&E), including
improvements, replacements, betterments, additions, repairs and maintenance. The
proposed

                                       12
<PAGE>


SOP addresses accounting and disclosure issues related to determining which PP&E
costs should be capitalized versus those that should be charged to expense as
incurred. The proposed SOP also addresses capitalization of indirect and
overhead costs and component accounting for PP&E.

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

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

LONG-LIVED ASSETS

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

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

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

NOTE 5 - 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 included in 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 September 30,
2001, and all documents previously filed with the

                                       13
<PAGE>


Securities and Exchange Commission in 2001, there have been no material changes
in the subject matters discussed in Note 9.

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

CAPITAL RESOURCES AND LIQUIDITY

     For the nine months ended September 30, 2001, cash expenditures related to
the construction program of the Company amounted to $40.8 million. Construction
expenditures during the nine months ended September 30, 2001 were primarily for
normal extensions and improvements of the Company's electric and natural gas
systems, as well as the transfer of substation and gas regulator station
facilities from the Roseton Generating Plant cotenants to the Company as part of
the sale of that Plant on January 30, 2001. The cash requirements for the
expenditures were funded from internal sources.

     During the second quarter, a portion of the proceeds from the January 30,
2001 divestiture of the Roseton and Danskammer fossil generating Plants was used
to call the entire $70 million issue of 9.25% First Mortgage Bonds due May 1,
2021. During the second quarter, the Company made open market purchases and
retired additional debt of $4.1 million of 6.25% First Mortgage Bonds due June
1, 2007, and 7.32% Medium Term Notes came due on their normal maturity date of
June 13, 2001 in the amount of $40 million. In the third quarter, the following
Medium Term Notes came due on their normal maturity dates: On June 30, 2001, the
7.05% for $7.5 million and on September 10, 2001 the 5.93% for $15 million. In
the future, the Company may repurchase debt in the open market.

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

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

                                       14
<PAGE>


     The Company's PSC authorization to issue medium-term notes (Series C)
expired on June 30, 2001. The PSC, by Order issued and effective September 27,
2001, authorized the Company to issue up to $100 million in aggregate Principal
amount of a new series of medium-term notes through June 30, 2004.

     At September 30, 2001, the Company had short-term debt outstanding of $8.0
million. Investments in short-term securities, including cash and cash
equivalents, were $82.0 million at September 30, 2001.

RESULTS OF OPERATIONS

     The following financial review identifies the causes of significant changes
in the amounts of revenues and expenses for the Company comparing the
three-month and nine-month periods between September 30, 2001 to the three-month
and nine-month periods ended September 30, 2000.

OPERATING REVENUES

     Operating revenues decreased $24.1 million (16%) for the third quarter of
2001 as compared to the third quarter of 2000 and decreased $30.7 million (7%)
for the nine months ended September 30, 2001. Details of these revenue changes
by electric and gas departments are as follows:

                                           INCREASE (DECREASE) FROM PRIOR PERIOD
                                                       THIRD QUARTER
                                             ELECTRIC                  GAS
                                             --------                -------
                                                 (Thousands of Dollars)

Customer Sales(a) ......................   $(62,193)(c)              $(2,193)(b)
Sales to Other
  Utilities ............................    (12,993)                  (1,618)
Fuel and Gas Cost
  Adjustment ...........................     52,206(d)                 1,042
Deferred Revenues ......................        869(e)                   295
Miscellaneous ..........................        524                        6
                                           --------                  -------
                                           $(21,587)                 $(2,468)
                                           ========                  =======

                                       15
<PAGE>


                                           INCREASE (DECREASE) FROM PRIOR PERIOD
                                           NINE MONTHS ENDED SEPTEMBER 30, 2001
                                             ELECTRIC                 GAS
                                             --------               -------
                                                 (Thousands of Dollars)

Customer Sales(a) ......................   $(140,998)(c)            $ (4,415)(b)
Sales to Other
  Utilities ............................     (32,917)                 (3,647)
Fuel and Gas Cost
  Adjustment ...........................     133,972 (d)              19,975
Deferred Revenues ......................      (4,871)(e)               1,917
Miscellaneous ..........................         455                    (160)
                                           ---------                --------
                                           $ (44,359)               $ 13,669
                                           =========                ========

(a)  Includes delivery of electricity and gas supplied by others.

(b)  Both firm and interruptible revenues.

(c)  Reduction in revenues is due primarily to change in rates due to sale of
     fossil plants, including elimination of recovery of fuel and purchased
     electricity costs in base rates.

(d)  Increase in revenues is due primarily to addition of fuel and purchased
     electricity costs previously recovered in base rates.

(e)  Includes the deferral and restoration of revenues related to Central
     Hudson's Retail Access Program and earnings in excess of the rate of return
     cap under the Settlement Agreement.


     The reduction in revenues from electric sales for both periods was due
largely to the interim electric rates reflecting the reduction of rate base
effective February 1, 2001 following the sale of the Company's interests in the
Danskammer and Roseton generating Plants on January 30, 2001 and the recovery of
its share of investment in the Nine Mile 2 Plant.

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

SALES

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

                                       16
<PAGE>


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

                                INCREASE (DECREASE)          FROM PRIOR PERIOD
                                   THIRD QUARTER            9 MOS. ENDED 9/30/01
                                --------------------        --------------------
                                ELECTRIC         GAS        ELECTRIC        GAS
                                --------         ---        --------        ---

Residential ..................     11%           (8)%          7%            8%
Commercial ...................      8            (1)           6            10
Industrial ...................     --            (1)           -            (1)
Interruptible ................     N/A           43            N/A         (18)

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

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

OPERATING EXPENSES

     Total operating expenses decreased $17.4 million (13%), from $135.4 million
in 2000 to $118.0 in the third quarter of 2001. Total operating expenses
decreased $13.3 million (3%) from $401.6 million in 2000 to $388.3 million in
the first nine months of 2001.

     In both periods, the reductions in other expenses, depreciation and
amortization, and taxes result from the elimination of all operating costs
associated with the fossil generating plants that were sold and a reduction in
depreciation expense for the Company's share of the Nine Mile 2 Plant, the
remaining cost of which was recovered using sale proceeds. Partially offsetting
the reductions is a net increase of $5.6 million in the third quarter and $23.9
million in the nine months ended September 30, 2001 as compared to the same
periods in the year 2000 in purchased electricity and fuel used in electric

                                       17
<PAGE>


generation. Purchased natural gas costs decreased $2.9 million in the third
quarter reflecting a reduction in the volume purchased and lower natural gas
prices. Purchased natural gas costs increased $9.9 million in the nine months
ended September 30, 2001 as compared to the same period in the year 2000. The
net increase in energy costs reflects increased fossil fuel prices, an increase
in electric and gas own territory sales and also, the impact of changing market
conditions brought about by the restructuring of the New York State wholesale
electricity market.

DIVIDENDS TO CH ENERGY GROUP

     Reference is made to the caption "Dividends to Energy Group" of Part II,
Item 7 of the Company's 10-K Report, for a discussion of the Company's dividend
payments. On October 15, 2001, the Board of Directors of the Company declared a
dividend of $9.0 million, payable November 1, 2001 to Energy Group. This raises
the total year-to-date dividends paid to $244 million.

OTHER MATTERS

NINE MILE 2 PLANT SALE

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

FORWARD-LOOKING STATEMENTS

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

                                       18
<PAGE>


protections provided by such Section 21E. A number of important factors
affecting the Company's business and financial results could cause actual
results to differ materially from those stated in the forward-looking
statements. Those factors include weather, energy supply and demand,
developments in the legislative, regulatory and competitive environment,
electric and gas industry restructuring and cost recovery, future market prices
for energy, capacity and ancillary services, nuclear industry regulation, the
outcome of pending litigation, and certain environmental matters, particularly
ongoing development of air quality regulations and industrial waste remediation
requirements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.

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

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

                           PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

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

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

                                       19
<PAGE>


Item 6.   Exhibits and Reports on Form 8-K

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

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

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

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

     None.


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


Dated: November 9, 2001

                                       20
<PAGE>


                                  EXHIBIT INDEX

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

    Exhibit No.
  Regulation S-K
      Item 601
    Designation                             Exhibit Description
------------------                          -------------------
(12)   --    Statement Showing Computation of the Ratio of Earnings to Fixed
             Charges and the Ratio of Earnings to Combined Fixed Charges and
             Preferred Stock Dividends.