UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

FORM 10-Q



(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, 2003

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the transition period from  to

|Commissionfile number | Exact name of Registrant as specified in its charter,State of incorporation, Address and Telephone number                    | IRS Employer Identification No.
|--------------------- | ---------------------------------------------------------------------------------------------------------------------------- | -------------------------------
|1-14766               | Energy East Corporation(A New York Corporation)
P. O. Box 12904
Albany, New York 12212-2904
(518) 434-3049www.energyeast.com | 14-1798693                     
|1-5139                | Central Maine Power Company(A Maine Corporation)
83 Edison Drive
Augusta, Maine 04336
(207) 623-3521                         | 01-0042740                     
|1-3103-2              | New York State Electric & Gas Corporation(A New York Corporation)
P. O. Box 3287
Ithaca, New York 14852-3287
(607) 347-4131  | 15-0398550                     
|1-672                 | Rochester Gas and Electric Corporation(A New York Corporation)
89 East Avenue
Rochester, New York 14649
(585) 546-2700       | 16-0612110                     

Indicate by check mark whether each 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|Registrant                                |       |     
|----------------------------------------- | ----- | ----
|Energy East Corporation                   | Yes X | No  
|Central Maine Power Company               | Yes   | No X
|New York State Electric & Gas Corporation | Yes   | No X
|Rochester Gas and Electric Corporation    | Yes   | No X

As of October 31, 2003, shares of common stock outstanding for each registrant were:

|Registrant                                | Description                   | Shares        
|----------------------------------------- | ----------------------------- | --------------
|Energy East Corporation                   | Par value $.01 per share      | 146,044,151   
|Central Maine Power Company               | Par value $5 per share        | 31,211,471 (1)
|New York State Electric & Gas Corporation | Par value $6.66 2/3 per share | 64,508,477 (2)
|Rochester Gas and Electric Corporation    | Par value $5 per share        | 34,506,513 (2)

(1)

This combined Form 10-Q is separately filed by Energy East Corporation, Central Maine Power Company, New York State Electric & Gas Corporation and Rochester Gas and Electric Corporation. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.





|Item | TABLE OF CONTENTS                                                                                                                                                                                                                                                                                                                                                                                                                   | Page                
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------
|     | PART I - FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                      |                     
|1
2  | Financial Statements 
Management's Discussion and Analysis of Financial Condition 
    and Results of Operations                                                                                                                                                                                                                                                                                                                    |                     
|     | Energy East Corporation
  Condensed Consolidated Statements of IncomeCondensed Consolidated Balance SheetsCondensed Consolidated Statements of Cash FlowsCondensed Consolidated Statements of Retained EarningsCondensed Consolidated Statements of Comprehensive IncomeManagement's Discussion and Analysis of Financial Condition 
    and Results of Operations
  (a)Liquidity and Capital Resources(b)Results of Operations     | 1
2
4
5
5
6
15      
|     | Central Maine Power Company
  Condensed Consolidated Statements of IncomeCondensed Consolidated Balance SheetsCondensed Consolidated Statements of Cash FlowsCondensed Consolidated Statements of Retained EarningsCondensed Consolidated Statements of Comprehensive IncomeManagement's Discussion and Analysis of Financial Condition 
    and Results of Operations
  (a)Liquidity and Capital Resources(b)Results of Operations | 19
20
22
23
23
24
25
|     | New York State Electric & Gas Corporation
  Condensed Balance SheetsCondensed Statements of IncomeCondensed Statements of Cash FlowsCondensed Statements of Retained EarningsCondensed Statements of Comprehensive IncomeManagement's Discussion and Analysis of Financial Condition 
    and Results of Operations
  (a)Liquidity and Capital Resources(b)Results of Operations                                                    | 26
28
29
30
30
31
32
|     | Rochester Gas and Electric Corporation
  Condensed Statements of IncomeCondensed Balance SheetsCondensed Statements of Cash FlowsCondensed Statements of Retained EarningsManagement's Discussion and Analysis of Financial Condition 
    and Results of Operations
  (a)Liquidity and Capital Resources(b)Results of Operations                                                                                                   | 35
36
38
39
40
42   



|Item          | TABLE OF CONTENTS - continued                                        | Page 
|------------- | -------------------------------------------------------------------- | -----
|1             | Notes to Financial StatementsForward-looking Statements              | 44
53
|3             | Quantitative and Qualitative Disclosures About Market Risk           | 53   
|4             | Controls and Procedures                                              | 54   
|              | PART II - OTHER INFORMATION                                          |      
|6             | Exhibits and Reports on Form 8-K(a) Exhibits
(b) Reports on Form 8-K | 54
54
|Signatures    | 55                                                                  
|Exhibit Index | 56                                                                  



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Energy East CorporationCondensed Consolidated Statements of Income - (Unaudited)

|                                                                                                | Three Months | Nine Months
|----------------------------------------------------------------------------------------------- | ------------ | -----------
|                                                                                                |              |            
|Periods ended September 30                                                                      | 2003         | 2002       
|                                                                                                |              |            
|(Thousands, except per share amounts)                                                           |              |            
|Operating Revenues                                                                              |              |            
|Utility                                                                                         | $828,710     | $874,321   
|Nonutility                                                                                      | 74,414       | 65,304     
|                                                                                                |              |            
|Total Operating Revenues                                                                        | 903,124      | 939,625    
|                                                                                                |              |            
|Operating Expenses                                                                              |              |            
|Electricity purchased and fuel used in generation                                               |              |            
|Utility                                                                                         | 317,131      | 348,471    
|Nonutility                                                                                      | 31,255       | 21,942     
|Natural gas purchased                                                                           |              |            
|Utility                                                                                         | 70,428       | 61,512     
|Nonutility                                                                                      | 19,545       | 19,695     
|Other operating expenses                                                                        |              |            
|Utility                                                                                         | 197,945      | 175,354    
|Nonutility                                                                                      | 18,783       | 15,698     
|Maintenance                                                                                     | 38,923       | 42,156     
|Depreciation and amortization                                                                   | 75,330       | 74,627     
|Other taxes                                                                                     | 61,555       | 64,120     
|                                                                                                |              |            
|Total Operating Expenses                                                                        | 830,895      | 823,575    
|                                                                                                |              |            
|Operating Income                                                                                | 72,229       | 116,050    
|Writedown of Investment                                                                         | -            | -          
|Other (Income)                                                                                  | (3,499)      | (9,430)    
|Other Deductions                                                                                | 1,094        | 4,516      
|Interest Charges, Net                                                                           | 76,232       | 72,378     
|Preferred Stock Dividends of Subsidiaries                                                       | 988          | 8,292      
|                                                                                                |              |            
|(Loss) Income From Continuing Operations
  Before Income Taxes                                  | (2,586)      | 40,294     
|Income Taxes (Benefit)                                                                          | (4,670)      | 15,030     
|                                                                                                |              |            
|Income From Continuing Operations                                                               | 2,084        | 25,264     
|                                                                                                |              |            
|Discontinued Operations                                                                         |              |            
|Loss from businesses held for sale (including 
  estimated loss on disposal in 2003 of $13,116) | (15,557)     | (2,988)    
|Income taxes (benefit)                                                                          | (7,494)      | (1,466)    
|                                                                                                |              |            
|Loss from Discontinued Operations                                                               | (8,063)      | (1,522)    
|                                                                                                |              |            
|Net (Loss) Income                                                                               | $(5,979)     | $23,742    
|                                                                                                |              |            
|Earnings Per Share from Continuing Operations,   basic and diluted                              | $.01         | $.17       
|                                                                                                |              |            
|Total (Loss) Earnings Per Share, basic and diluted                                              | $(.04)       | $.16       
|                                                                                                |              |            
|Dividends Paid Per Share                                                                        | $.25         | $.24       
|                                                                                                |              |            
|Average Common Shares Outstanding, basic                                                        | 145,684      | 144,621    
|                                                                                                |              |            
|Average Common Shares Outstanding, diluted                                                      | 145,901      | 144,621    
|                                                                                                |              |            





Energy East CorporationCondensed Consolidated Balance Sheets - (Unaudited)

|                                              | Sept. 30, 2003 | Dec. 31,  
2002
|--------------------------------------------- | -------------- | ---------------
|                                              |                |                
|(Thousands)                                   |                |                
|Assets                                        |                |                
|Current Assets                                |                |                
|Cash and cash equivalents                     | $187,315       | $250,490       
|Special deposits                              | 35,729         | 47,643         
|Accounts receivable, net                      | 568,551        | 737,876        
|Fuel, at average cost                         | 178,514        | 117,678        
|Materials and supplies, at average cost       | 22,770         | 22,953         
|Accumulated deferred income tax benefits, net | 12,178         | 8,697          
|Assets of businesses held for sale            | 116,759        | -              
|Prepayments and other current assets          | 124,615        | 86,167         
|                                              |                |                
|Total Current Assets                          | 1,246,431      | 1,271,504      
|                                              |                |                
|Utility Plant, at Original Cost               |                |                
|Electric                                      | 5,951,406      | 5,803,576      
|Natural gas                                   | 2,380,795      | 2,347,011      
|Common                                        | 360,205        | 360,776        
|                                              |                |                
|                                              | 8,692,406      | 8,511,363      
|Less accumulated depreciation                 | 3,887,023      | 3,877,164      
|                                              |                |                
|Net Utility Plant in Service                  | 4,805,383      | 4,634,199      
|Construction work in progress                 | 224,296        | 179,557        
|                                              |                |                
|Total Utility Plant                           | 5,029,679      | 4,813,756      
|                                              |                |                
|Other Property and Investments, Net           | 407,692        | 452,710        
|                                              |                |                
|Regulatory and Other Assets                   |                |                
|Regulatory assets                             |                |                
|Nuclear plant obligations                     | 420,346        | 524,679        
|Unfunded future income taxes                  | 228,107        | 234,487        
|Unamortized loss on debt reacquisitions       | 48,691         | 45,353         
|Environmental remediation costs               | 128,761        | 106,262        
|Nonutility generator termination agreements   | 109,250        | 116,782        
|Asset retirement obligation                   | 157,550        | -              
|Other                                         | 411,579        | 370,354        
|                                              |                |                
|Total regulatory assets                       | 1,504,284      | 1,397,917      
|                                              |                |                
|Other assets                                  |                |                
|Goodwill, net                                 | 1,534,748      | 1,518,173      
|Prepaid pension benefits                      | 596,963        | 540,426        
|Other                                         | 217,913        | 262,401        
|                                              |                |                
|Total other assets                            | 2,349,624      | 2,321,000      
|                                              |                |                
|Total Regulatory and Other Assets             | 3,853,908      | 3,718,917      
|                                              |                |                
|Total Assets                                  | $10,537,710    | $10,256,887    
|                                              |                |                





Energy East Corporation
Condensed Consolidated Balance Sheets - (Unaudited)

|                                                                                                                                                                                                                                                      | Sept. 30,  
2003       | Dec. 31,  
2002        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | -----------------------
|                                                                                                                                                                                                                                                      |                        |                        
|(Thousands)                                                                                                                                                                                                                                           |                        |                        
|Liabilities                                                                                                                                                                                                                                           |                        |                        
|Current Liabilities                                                                                                                                                                                                                                   |                        |                        
|Current portion of preferred stock of subsidiary subject to 
   mandatory redemption requirements                                                                                                                                                     | $1,250                 | -                      
|Current portion of long-term debt                                                                                                                                                                                                                     | 190,768                | $545,404               
|Notes payable                                                                                                                                                                                                                                         | 171,300                | 322,200                
|Accounts payable and accrued liabilities                                                                                                                                                                                                              | 342,905                | 361,499                
|Interest accrued                                                                                                                                                                                                                                      | 68,162                 | 44,310                 
|Taxes accrued                                                                                                                                                                                                                                         | 18,157                 | 30,036                 
|Liabilities of businesses held for sale                                                                                                                                                                                                               | 32,695                 | -                      
|Other                                                                                                                                                                                                                                                 | 192,643                | 200,927                
|                                                                                                                                                                                                                                                      |                        |                        
|Total Current Liabilities                                                                                                                                                                                                                             | 1,017,880              | 1,504,376              
|                                                                                                                                                                                                                                                      |                        |                        
|Regulatory and Other Liabilities                                                                                                                                                                                                                      |                        |                        
|Regulatory liabilities                                                                                                                                                                                                                                |                        |                        
|Deferred income taxes                                                                                                                                                                                                                                 | 471,709                | 203,926                
|Gain on sale of generation assets                                                                                                                                                                                                                     | 137,326                | 152,648                
|Pension benefits                                                                                                                                                                                                                                      | 55,880                 | 67,205                 
|Other                                                                                                                                                                                                                                                 | 90,512                 | 104,937                
|                                                                                                                                                                                                                                                      |                        |                        
|Total regulatory liabilities                                                                                                                                                                                                                          | 755,427                | 528,716                
|                                                                                                                                                                                                                                                      |                        |                        
|Other liabilities                                                                                                                                                                                                                                     |                        |                        
|Deferred income taxes                                                                                                                                                                                                                                 | 489,104                | 702,426                
|Nuclear plant obligations                                                                                                                                                                                                                             | 277,359                | 314,013                
|Other postretirement benefits                                                                                                                                                                                                                         | 407,822                | 391,049                
|Asset retirement obligation                                                                                                                                                                                                                           | 431,843                | -                      
|Environmental remediation costs                                                                                                                                                                                                                       | 147,482                | 133,933                
|Other                                                                                                                                                                                                                                                 | 389,553                | 408,841                
|                                                                                                                                                                                                                                                      |                        |                        
|Total other liabilities                                                                                                                                                                                                                               | 2,143,163              | 1,950,262              
|                                                                                                                                                                                                                                                      |                        |                        
|Total Regulatory and Other Liabilities                                                                                                                                                                                                                | 2,898,590              | 2,478,978              
|                                                                                                                                                                                                                                                      |                        |                        
|Company-obligated mandatorily redeemable trust preferred 
   securities of subsidiary holding solely parent debentures                                                                                                                                | 345,000                | -                      
|Preferred stock of subsidiary subject to mandatory
   redemption requirements                                                                                                                                                                         | 23,750                 | -                      
|Long-term debt                                                                                                                                                                                                                                        | 3,645,112              | 3,351,959              
|                                                                                                                                                                                                                                                      |                        |                        
|Total Liabilities                                                                                                                                                                                                                                     | 7,930,332              | 7,335,313              
|                                                                                                                                                                                                                                                      |                        |                        
|Commitments                                                                                                                                                                                                                                           | -                      | -                      
|Preferred Stock of Subsidiaries Company-obligated mandatorily redeemable trust preferred 
   securities of subsidiary holding solely parent debentures
 Subject to mandatory redemption requirements
 Redeemable solely at the option of subsidiaries | -      
-      
91,095 | 345,000 
25,000 
90,962
|Common Stock Equity
 Common stock                                                                                                                                                                                                                     | 1,460                  | 1,455                  
|Capital in excess of par value                                                                                                                                                                                                                        | 1,453,465              | 1,447,664              
|Retained earnings                                                                                                                                                                                                                                     | 1,109,670              | 1,061,428              
|Accumulated other comprehensive (loss)                                                                                                                                                                                                                | (44,684)               | (34,167)               
|Deferred compensation                                                                                                                                                                                                                                 | (3,264)                | -                      
|Treasury stock, at cost                                                                                                                                                                                                                               | (364)                  | (15,768)               
|                                                                                                                                                                                                                                                      |                        |                        
|Total Common Stock Equity                                                                                                                                                                                                                             | 2,516,283              | 2,460,612              
|                                                                                                                                                                                                                                                      |                        |                        
|Total Liabilities and Stockholders' Equity                                                                                                                                                                                                            | $10,537,710            | $10,256,887            
|                                                                                                                                                                                                                                                      |                        |                        

The



Energy East CorporationCondensed Consolidated Statements of Cash Flows - (Unaudited)

|Nine months ended September 30                                                     | 2003      | 2002     
|---------------------------------------------------------------------------------- | --------- | ---------
|                                                                                   |           |          
|(Thousands)                                                                        |           |          
|Operating Activities                                                               |           |          
|Net income                                                                         | $157,202  | $134,634 
|Adjustments to reconcile net income to net cash
  provided by operating activities |           |          
|Depreciation and amortization                                                      | 307,710   | 205,644  
|Income taxes and investment tax credits deferred, net                              | 96,338    | 30,453   
|Pension income                                                                     | (33,099)  | (52,385) 
|Writedown of investment                                                            | -         | 12,209   
|Changes in current operating assets and liabilities                                |           |          
|Accounts receivable, net                                                           | 146,936   | 145,495  
|Inventory                                                                          | (70,444)  | (10,629) 
|Prepayments and other current assets                                               | (46,027)  | (24,974) 
|Accounts payable and accrued liabilities                                           | (25,261)  | (23,792) 
|Interest accrued                                                                   | 23,968    | 29,541   
|Taxes accrued                                                                      | (3,662)   | 16,415   
|Other current liabilities                                                          | (2,182)   | 7,141    
|Other assets                                                                       | (134,050) | (16,260) 
|Other liabilities                                                                  | 28,258    | (23,917) 
|                                                                                   |           |          
|Net Cash Provided by Operating Activities                                          | 445,687   | 429,575  
|                                                                                   |           |          
|Investing Activities                                                               |           |          
|Acquisition, net of cash acquired                                                  | -         | (681,397)
|Utility plant additions                                                            | (187,267) | (144,765)
|Sale of generation assets                                                          | -         | 59,442   
|Other property and investments additions                                           | (24,773)  | (20,759) 
|Other property and investments sold                                                | 9,532     | 7,477    
|Special deposits                                                                   | 5,150     | (5,058)  
|Other                                                                              | (3,615)   | 5,430    
|                                                                                   |           |          
|Net Cash Used in Investing Activities                                              | (200,973) | (779,630)
|                                                                                   |           |          
|Financing Activities                                                               |           |          
|Issuance of common stock                                                           | 3,330     | 12,866   
|Repurchase of common stock                                                         | -         | (1,749)  
|Repayments of first mortgage bonds, including net premiums                         | (242,066) | (178,349)
|Long-term note issuances                                                           | 505,596   | 502,500  
|Long-term note repayments                                                          | (247,582) | (68,660) 
|Notes payable three months or less, net                                            | (146,900) | 38,102   
|Notes payable issuances                                                            | 7,000     | 13,009   
|Notes payable repayments                                                           | (91,435)  | (35,607) 
|Dividends on common stock                                                          | (95,832)  | (90,715) 
|                                                                                   |           |          
|Net Cash (Used in) Provided by Financing Activities                                | (307,889) | 191,397  
|                                                                                   |           |          
|Net Decrease in Cash and Cash Equivalents                                          | (63,175)  | (158,658)
|Cash and Cash Equivalents, Beginning of Period                                     | 250,490   | 437,014  
|                                                                                   |           |          
|Cash and Cash Equivalents, End of Period                                           | $187,315  | $278,356 
|                                                                                   |           |          





Energy East CorporationCondensed Consolidated Statements of Retained Earnings - (Unaudited)

|Nine months ended September 30   | 2003       | 2002      
|-------------------------------- | ---------- | ----------
|                                 |            |           
|(Thousands)                      |            |           
|Balance, Beginning of Period     | $1,061,428 | $998,281  
|                                 |            |           
|Add net income                   | 157,202    | 134,634   
|                                 |            |           
|Deduct dividends on common stock | 108,960    | 90,715    
|                                 |            |           
|Balance, End of Period           | $1,109,670 | $1,042,200
|                                 |            |           





Energy East CorporationCondensed Consolidated Statements of Comprehensive Income - (Unaudited)

|                                                                                                                                                                                                                                                               | Three Months | Nine Months
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | -----------
|                                                                                                                                                                                                                                                               |              |            
|Periods ended September 30                                                                                                                                                                                                                                     | 2003         | 2002       
|                                                                                                                                                                                                                                                               |              |            
|(Thousands)                                                                                                                                                                                                                                                    |              |            
|Net (loss) income                                                                                                                                                                                                                                              | $(5,979)     | $23,742    
|Other comprehensive income, net of tax                                                                                                                                                                                                                         |              |            
|Net unrealized gains (losses) on investments, net
   of income tax (expense) benefit for the three
   months of $(87) in 2003 and $953 in 2002 and for
   the nine months of $(730) in 2003 and $6,875
   in 2002                                              | 132          | (1,438)    
|Reclassification adjustment for investment losses
   included in net income, net of income tax
   benefit in 2002 of $4,919 for the nine months                                                                                                                | -            | -          
|Minimum pension liability adjustment, net of income
   tax (expense) for the three and nine months
   in 2003 of $(73)                                                                                                                                         | 111          | -          
|Unrealized (losses) gains on derivatives qualified
   as hedges, net of income tax benefit (expense) for
   the three months of $8,840 in 2003 and (6,529)
   in 2002 and for the nine months of $(5,176) in
   2003 and $(10,875) in 2002                     | (14,046)     | 9,755      
|Reclassification adjustment for derivative (gains)
   losses included in net income, net of income tax 
   expense (benefit) for the three months of $1,345
   in 2003 and $(1,285) in 2002 and for the nine
   months of $12,919 in 2003 and $(6,319) in 2002 | (2,032)      | 1,875      
|                                                                                                                                                                                                                                                               |              |            
|Net unrealized (losses) gains on derivatives 
   qualified as hedges                                                                                                                                                                                           | (16,078)     | 11,630     
|                                                                                                                                                                                                                                                               |              |            
|Total other comprehensive (loss) income                                                                                                                                                                                                                        | (15,835)     | 10,192     
|                                                                                                                                                                                                                                                               |              |            
|Comprehensive (Loss) Income                                                                                                                                                                                                                                    | $(21,814)    | $33,934    
|                                                                                                                                                                                                                                                               |              |            

The



Item 2.

Energy East Corporation

(a) Liquidity and Capital Resources

Restructuring 
In 2002 Energy East Corporation (Energy East or the company) initiated a corporate restructuring designed to achieve optimum organizational efficiency and effectiveness. The savings from that initiative are essential for the company to meet the rate reduction or efficiency targets imputed in utility rates by regulators, as well as to meet the expectations of customers and investors. In the fourth quarter of 2002 Energy East recorded $41 million of restructuring expenses related to its voluntary early retirement and involuntary severance programs at six of its operating companies. (See report on Form 10-K for Energy East, Central Maine Power Company (CMP), New York State Electric & Gas Corporation (NYSEG) and Rochester Gas and Electric Corporation (RG&E) for fiscal year ended December 31, 2002, Item 7 - Liquidity and Capital Resources.) As of September 30, 2003, all of the related involuntary severance liability of $9 million has been paid.

The voluntary early retirement program resulted in a reduction of 486 employees in the first quarter of 2003. Collectively the voluntary early retirement and involuntary severance programs resulted in a reduction in overall employee headcount of 679, or 8%, in 2003, including 79 from CMP, 255 from NYSEG and 254 from RG&E.

Integration savings, previously estimated at over $80 million annually, are now expected to be approximately $100 million annually by 2006. Those savings, which include reductions in operating expenses and capital expenditures, will come from the consolidation of functions such as accounting, finance, information services and supply chain, as well as the implementation of other merger-enabled initiatives across the six operating utilities. The company completed its consolidation of information systems and supply chain during the second quarter of 2003.

On September 30, 2003, Energy East received authorization from the Securities and Exchange Commission (SEC) to form a shared services company that will provide services including accounting, treasury, information services, payroll and supply chain functions.

Electric Delivery Business

Regional Transmission Organization (RTO): In July 2001 the Federal Energy Regulatory Commission (FERC) issued an order requiring the New York Independent System Operator (NYISO) and neighboring New England and Mid-Atlantic independent system operators (ISOs) to negotiate to form a single Northeast RTO. (See report on Form 10-K for Energy East, CMP, NYSEG and RG&E for fiscal year ended December 31, 2002, Item 7 - Electric Delivery Business, Regional Transmission Organization.) The negotiation ended without consensus, and on September 16, 2003, FERC issued an order terminating the proceeding.

On January 16, 2003, ISO New England, Inc. (ISO New England) announced that it would work with New England transmission owners to seek input and the advice of all market participants, regulators and other stakeholders to pursue the creation of a New England-only RTO. ISO New England made an RTO filing with FERC on October 31, 2003. The NYISO is considering filings to improve its markets and is working on better coordination with neighboring systems. CMP, NYSEG and RG&E are participating in these efforts.

Management's discussion and analysis of financial condition and results of operations

Energy East Corporation



FERC Standard Market Design: In October 2001 FERC commenced a proceeding to consider national standard market design (SMD) issues and in July 2002 issued a Notice of Proposed Rulemaking (the SMD NOPR). The SMD NOPR proposed rules that would require, among other things, changes in the wholesale power markets, transmission planning, services and charges, market power monitoring and mitigation, and the organization and structure of ISOs. CMP, NYSEG and RG&E filed comments jointly with other transmission owners in November 2002 and in early 2003. On April 28, 2003, FERC issued a white paper on SMD in which FERC accommodates greater regional flexibility and seeks further comments. The SMD white paper included a preference for energy markets based on locational marginal pricing (LMP), which represented a significant change for some regions of the country. The NYISO and ISO New England already operate markets based on LMP. The companies are unable to predict SMD's ultimate effect, if any, on their results of operations or financial position.

Transmission Planning and Expansion and Generation Interconnection: In June and July 2001 FERC issued orders that address a number of transmission planning and expansion issues that would directly affect CMP, NYSEG and RG&E as transmission owners. The FERC orders discuss giving exclusive responsibility for the transmission planning process to RTOs, rather than the transmission owners, and also discuss redefining the cost-sharing responsibilities of interconnecting generators for transmission expansion costs. NYSEG, RG&E and other parties are in discussion with the NYISO on the establishment of a formal regional planning process. On July 24, 2003, FERC issued orders regarding generation interconnection terms, conditions and cost allocation that would require modifications to the companies' interconnection processes. Additional transmission planning and expansion proposals are included in the SMD NOPR. On July 31, 2003, ISO New England and the New England Power Pool submitted a filing to FERC concerning transmission expansion cost allocation. CMP, among other parties, protested the filing, arguing that it would require customers who would not benefit from new transmission projects to contribute to those project costs. The companies are unable to predict the ultimate effect, if any, of these proceedings on their transmission systems or on future capital expenditures.

In January 2003 FERC issued a proposed policy statement on transmission pricing. FERC proposes a 50 basis point return on equity adder on facilities over which transmission owners turn control to an RTO. The NYISO and ISO New England satisfy most of the requirements of an RTO. In addition, FERC proposes that unaffiliated third parties will receive the equivalent of an additional 150 basis point adder applicable to transmission facilities that transmission owning utilities divest. Finally, FERC proposes a 100 basis point adder for new transmission facilities found appropriate through an RTO planning process. The company filed comments on FERC's policy proposal in the first half of 2003.

NYISO Demand Curve Proposal: On May 20, 2003, FERC accepted a NYISO proposal to amend its services tariff to adopt a demand curve. The NYISO uses the demand curve to establish administratively determined electric capacity prices and the quantity of capacity that each load-serving entity, including NYSEG and RG&E, is required to purchase. NYSEG and RG&E expect that the demand curve will not have a material effect on their results of operations or financial position.



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

NYPSC Collaborative on End State of Energy Competition: In March 2000 the New York State Public Service Commission (NYPSC) instituted a proceeding to address the future of competitive natural gas and electricity markets, including the role of regulated utilities in those markets. Other objectives of the proceeding include identifying and suggesting actions to eliminate obstacles to the development of those competitive markets and providing recommendations concerning Provider of Last Resort and related issues. A recommended decision (RD) addressing these matters is before the NYPSC.

In a separate phase of this proceeding, the NYPSC issued an order in November 2001 directing the development of embedded cost of service studies for use in implementing unbundled rates. A separate RD on the embedded cost of service studies filed by NYSEG and Consolidated Edison was issued on March 24, 2003. That RD discusses the utilities' cost studies and concludes that they generally comply with the NYPSC's directives. The RD recommended adoption of NYSEG's lost revenue recovery mechanisms contained in NYSEG's electric and natural gas joint proposals. Briefs on the recommended decision were filed in April 2003 by NYSEG and RG&E. NYSEG took exception to the RD's treatment of certain costs. RG&E filed its brief on exception, not taking formal exception to any of the RD's proposals, but commenting that given the material differences among utilities, it would be both impossible and improper to impose the conclusions in this RD on the remaining utilities in this proceeding.

CMP Alternative Rate Plan: In September 2000 the Maine Public Utilities Commission (MPUC) approved CMP's Alternative Rate Plan (ARP 2000). ARP 2000 applies only to CMP's state jurisdictional distribution revenue requirement and excludes revenue requirements related to stranded costs and transmission services. ARP 2000 began January 1, 2001, and continues through December 31, 2007, with price changes, if any, occurring on July 1, in the years 2002 through 2007. In March 2003 CMP submitted its annual ARP filing proposing a decrease of 7.82% on the distribution portion of rates, which reflects a decrease in ice storm amortization expense and other items. In June 2003 the MPUC approved the decrease, which became effective July 1, 2003.

CMP Electricity Supply Responsibility: Under Maine Law the MPUC can mandate that CMP be a standard-offer provider for supply service if the MPUC should deem bids by competitive suppliers to be unacceptable. CMP has no standard-offer obligations through February 2004. In July 2003 the MPUC chose suppliers of standard-offer electricity for the six months beginning September 1, 2003: FPL Energy Power Marketing, Inc. for medium class customers and Select Energy, Inc. for larger customers. If in the future CMP should have standard-offer obligations there would be no effect on net income because CMP is ensured cost recovery through Maine Law. CMP's revenues and purchased power costs would fluctuate, however, if its status as a standard-offer provider changes. (See report on Form 10-K for Energy East and CMP for fiscal year ended December 31, 2002, Item 7 - Liquidity and Capital Resources.)

MPUC Stranded Cost Proceeding: In December 2002 the MPUC initiated an investigation to review CMP's current level of recovery of stranded costs, including the costs associated with decommissioning the Yankee Atomic plant. In June 2003 the MPUC approved a stipulation agreeing to a total of $7.4 million reduction in stranded cost rates over the period July 2003 through February 2005. The reduction reflects lower anticipated Maine Yankee costs and higher sales levels. The stipulation also provided for deferral and recovery of Yankee Atomic decommissioning costs not currently in rates.

Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

In response to a request from the Industrial Energy Consumers Group to mitigate high supply prices, the MPUC ordered CMP to lower stranded cost prices for medium and large commercial and industrial customers by $.003 per kWh for the period July 2003 through February 2005. The mitigation is to be funded from CMP's asset sale gain account.



Mandated Contracts with Two NYSEG Customers: (See report on Form 10-K for Energy East and NYSEG for fiscal year ended December 31, 2002, Item 7 - Liquidity and Capital Resources, Electric Delivery Business, NYPSC-mandated Contracts with Two Customers and NYSEG Electric Rate Plan.) On July 24, 2002, NYSEG filed a petition with the New York State Supreme Court, Albany County, asking the court to overturn the NYPSC's orders directing NYSEG to enter into long-term electric service contracts with Nucor Steel Auburn, Inc. and Corning Incorporated. NYSEG believed the rates and the terms of those mandated contracts were unduly preferential and violated the law, NYSEG's tariffs and the NYPSC's guidelines. On December 9, 2002, the State Supreme Court dismissed NYSEG's petition.

NYSEG appealed that dismissal to the Appellate Division, Third Department, of the New York State Supreme Court. On July 17, 2003, the Appellate Division affirmed the New York State Supreme Court's dismissal. NYSEG has not requested permission to appeal the Appellate Division's decision.

RG&E 2002 Electric and Gas Rate Proceeding: In February 2002 RG&E filed a request with the NYPSC for new electric and natural gas rates to go into effect on January 15, 2003. The single year filing, as updated, supported an increase in annual electric rates of $40 million, or 5.7%, and an increase in natural gas rates of $19 million, or 6.6%. In December 2002 the administrative law judge (ALJ) in this proceeding issued a recommended decision that, if approved, would have resulted in a $9 million, or 3.3%, overall increase for natural gas service and no increase for electric service.

On March 7, 2003, the NYPSC issued an order (Order) in the proceeding authorizing a $16 million electric revenue requirement reduction. The Order requires a $16 million increase in the amortization of previously deferred costs, without increasing electric rates. The NYPSC also limited the natural gas rate increase to $6 million, or 1.9%. The rate decision set the cost of equity at 9.96%, with an equity ratio of 41.4% and an overall weighted cost of capital of 8.11%. The NYPSC also credited to customers $55 million of electric earnings that, according to the NYPSC, exceeded a preset level under the five-year rate plan that expired on June 30, 2002, subject to a final audit of the fifth year amount. The NYPSC also ignored the cost of replacement power that was incurred during the required Ginna nuclear plant refueling outage in the fall of 2003.

RG&E is disappointed with the Order because it ignores the record that was developed in the proceeding, reverses many of the recommendations of the ALJ without adequate explanation and does not provide adequate revenue for RG&E to earn its authorized rate of return. In May 2003 RG&E began a proceeding to appeal the most objectionable errors in the Order. That proceeding is now before the Appellate Division, Third Department, of the New York State Supreme Court. A decision on the proceeding is expected early in 2004.



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

RG&E Cost Deferral Petitions: On April 9, 2003, RG&E filed a letter with the NYPSC requesting the deferral of costs, including interest, for restoration work resulting from a severe ice storm in April 2003 and replacement purchased power costs incurred in 2003 due to a scheduled refueling outage for the Ginna nuclear generating station (Ginna). The deferred costs are $31 million for repairs required due to the ice storm and an estimated $15 million for the Ginna replacement purchased power. These costs are included in RG&E's 2003 Electric and Gas Rate Proceeding described below.

On April 29, 2003, RG&E received a response from the NYPSC that described the NYPSC's history of allowing net prudent costs of this nature, which have a material effect on earnings, to be deferred and recovered from customers. The letter acknowledged that those costs are not currently included in RG&E's rates. Based on the NYPSC letter, RG&E believes that recovery is probable and, therefore, is deferring those costs in accordance with generally accepted accounting principles, pending approval from the NYPSC, which is expected in early 2004.

On May 15, 2003, RG&E filed a letter with the NYPSC seeking deferral and true up of an estimated $9 million of pension costs in accordance with the NYPSC's Statement of Policy Concerning the Accounting and Ratemaking Treatment for Pensions and Post Retirement Benefits Other than Pensions. The request covers the 16-month period January 1, 2003, through May 1, 2004, the expected effective date of rates in RG&E's 2003 Electric and Gas Rate Proceeding.

RG&E 2003 Electric and Gas Rate Proceeding: On May 16, 2003, RG&E filed a new rate case with the NYPSC to recover costs that RG&E has incurred and will continue to incur in providing safe and reliable electric and natural gas service. The filing proposed an annual increase in electric rates of $105 million, or 16.2%, and an annual increase in natural gas rates of $25.3 million, or 7.6% overall and 19.7% on delivery rates. On August 29, 2003, RG&E submitted rate revisions based on continued review of its filing, requesting instead a $97.7 million annual electric rate increase and a $24.6 million annual increase in natural gas rates. RG&E's filing cites inadequate rate relief from the NYPSC's Order issued March 7, 2003, increased costs (see RG&E Cost Deferral Petitions) and the need for a fair and reasonable return on equity of 11.5%. In order to allow negotiations for a long-term rate plan, the NYPSC issued three orders in October 2003 granting RG&E's requests for extensions of the date for rates to become effective through June 8, 2004, subject to a make whole provision back to April 29, 2004. RG&E expects the NYPSC to issue a rate order in June 2004, with rates to become effective June 9, 2004, subject to the make whole provision to May 1, 2004, unless long-term rate plans are negotiated and approved earlier.

RG&E Electric Rate Unbundling: On June 5, 2003, as required by the NYPSC's Order issued March 7, 2003, RG&E filed documentation with the NYPSC to unbundle commodity charges and to create electric commodity options for all customers. RG&E expects that this filing will be incorporated into its pending 2003 Electric and Gas Rate Proceeding. In that proceeding RG&E proposes to continue to charge customers bundled rates, with an Electric Supply Reconciliation Mechanism, for the period May 1, 2004, through December 31, 2004. RG&E's unbundling filing proposes separate delivery and commodity service options (modeled on NYSEG's commodity service options) to become effective January 1, 2005, for two periods of two years: 2005 through 2006 and 2007 through 2008. This proceeding may be combined with the RG&E 2003 Electric and Gas Rate Proceeding and the two proceedings considered together by the NYPSC.

Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

Sale of Ginna Station and Relicensing: In June 2003 RG&E announced that it intends to seek bids for the sale of its Ginna nuclear generating station (Ginna station), which it owns and operates. RG&E expects to announce the successful bidder in December 2003 and to close the transaction in mid-2004. The completion of the transaction is dependent on the Nuclear Regulatory Commission (NRC), FERC, NYPSC and other regulatory bodies approving the sale on terms acceptable to RG&E and on the renewal of Ginna's operating license.

The Ginna station operating license expires in 2009. In July 2002 RG&E filed a license renewal application with the NRC, which, if approved, would extend the license to September 19, 2029. The NRC has deemed the application complete. The NRC held two sets of public meetings in 2002 and two in 2003. A decision on this matter is expected in the second quarter of 2004.

In October 2003 RG&E completed the 31st refueling of the reactor core at Ginna, which will support operations through the spring of 2005. During this refueling outage RG&E also successfully replaced Ginna's reactor vessel head as previously scheduled. The cost of the replacement is estimated to be $13 million and is expected to be recovered in rates. (See report on Form 10-K for Energy East and RG&E for fiscal year ended December 31, 2002, Item 7 - Liquidity and Capital Resources, Electric Delivery Business, Ginna Station.)

Manufactured Gas Plant Remediation Recovery: RG&E and NYSEG began cost contribution actions against FirstEnergy Corp. (formerly GPU, Inc.) in federal district court; RG&E in the Western District of New York in August 2000 and NYSEG in the Northern District of New York in April 2003. The actions are for both past and future costs incurred for the investigation and remediation of inactive manufactured gas plant (MGP) sites. The RG&E action is being litigated and mediated concurrently and the parties are in the final stages of discovery. RG&E and NYSEG are unable to predict the outcome of these actions at this time.

Midwest and Northeast Power Outage of August 2003: On August 14, 2003, a major electrical power outage affecting approximately 60 million customers at the height of the outage occurred in the Midwest and Northeast United States and parts of Canada. Ultimate responsibility for the outage is yet to be determined. A joint United States/Canada government-appointed Power Outage Task Force was formed to determine the cause of the outage and to seek solutions to prevent further outages. Until the Task Force concludes their findings, the company is unable to predict the amount of capital expenditures that may be required, if any, should modifications to its electrical system be required as a result of the outage.

Natural Gas Delivery Business

RG&E 2002 Electric and Gas Rate Proceeding: See Electric Delivery Business.







Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

Berkshire Gas Union Contract: Effective April 1, 2003, the union contract expired between The Berkshire Gas Company (Berkshire Gas) and the local union of the United Steelworkers of America. Berkshire Gas and the local union have been unable to negotiate a new contract and a work stoppage involving approximately 57% of the workforce is in effect.

CNG Purchased Gas Adjustment Clause: In April 2002 the Connecticut Department of Public Utility Control (DPUC) initiated a semiannual review of Connecticut Natural Gas Corporation's (CNG) Purchased Gas Adjustment Clause (PGA). The DPUC issued its draft decision in December 2002, disallowing approximately $1 million of natural gas costs that would be returned to customers through the PGA. As a result, at December 31, 2002, CNG recognized a liability of $1 million for those costs. On May 28, 2003, the DPUC issued its final decision in this matter, modifying the draft decision and removing the disallowance. The DPUC also notified CNG concerning transactions reviewed in the semiannual review in August 2003, for which a final decision is due in January 2004. CNG is retaining its $1 million reserve contingency to cover the period November 1, 2001, through October 31, 2003, pending completion of the DPUC's review. CNG cannot predict the final outcome of this proceeding.

Connecticut Merger-Enabled Gas Supply Savings and Gas Cost Reduction Plan Filings: In 2001 CNG and The Southern Connecticut Gas Company (SCG) submitted filings to the DPUC regarding merger-enabled gas supply savings (MEGS) and a gas-cost reduction plan, which covered the initial period April 1, 2001, through September 30, 2001. CNG provided calculations for total MEGS of $1.3 million and SCG provided calculations for total MEGS of $2.2 million. On February 26, 2003, based on their understanding of the components of MEGS, the DPUC issued a draft decision on CNG's and SCG's filed MEGS and gas-cost reduction plan results, modifying the MEGS amounts to $134,000 for CNG and $9,000 for SCG. CNG and SCG filed comments and additional detail with regard to the draft decision on April 28, 2003, the DPUC's extended due date. Hearings are currently ongoing and a final decision is expected in January 2004. CNG and SCG cannot predict the final outcome of these proceedings.

Other BusinessesSale of Other Businesses: The company continues to rationalize its nonutility businesses to ensure they fit its strategic focus. In May 2003 Berkshire Propane Inc., a subsidiary of Berkshire Energy Resources, sold about one-fourth of its assets and customers for approximately book value. In November 2003 Berkshire Propane sold its remaining assets and in October 2003 Energetix sold its Griffith Oil subsidiary. Energetix is a subsidiary of RGS Energy Group, Inc. The estimated after tax loss on disposal recognized in the third quarter was $2 million for Berkshire Propane and $5 million for Griffith Oil. (See Item 1 - Note 2 to Energy East's Condensed Consolidated Financial Statements.)

Critical Accounting Policies(See Energy East's report on Form 10-K for fiscal year ended December 31, 2002, Item 7, Critical Accounting Policies.)

Asset Retirement Obligation: As required by Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, the company recorded a liability for the fair value of its asset retirement obligation on January 1, 2003. The company will adjust the liability to its present value periodically over time, and the capitalized cost will be depreciated over the

Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

useful life of the related asset. The determination of the liability includes various assumptions, the primary assumptions being the discount rate and forecasted cash flows. Changes in those assumptions could have a significant effect on the amount of the company's asset retirement obligation. The company's asset retirement obligation is recovered through rates collected from customers; therefore, the depreciation of the capitalized costs and adjustments to the liability are deferred until those amounts are included in rates. (See Item 1 - Note 8 to Energy East's Condensed Consolidated Financial Statements.)

Investing and Financing ActivitiesInvesting Activities: Capital spending for the nine months ended September 30, 2003, was $187 million, including nuclear fuel. Capital spending is projected to be $338 million for 2003, including nuclear fuel, and is expected to be paid for with internally generated funds. Capital spending will be primarily for the extension of energy delivery service, necessary improvements to existing facilities, compliance with environmental requirements and governmental mandates and merger integration.

Financing Activities: During the nine months ended September 30, 2003, the company issued 833,078 shares of common stock at an average price of $19.83 per share, substantially all through its Dividend Reinvestment and Stock Purchase Plan. The shares issued included 331,797 treasury shares and 501,281 newly issued shares.

The company filed a shelf registration statement with the SEC in June 2003 to sell up to $1 billion in an unspecified combination of debt, preferred stock, common stock and trust preferred securities. The company plans to use the net proceeds from the sale of securities under this shelf registration for general corporate purposes, such as the repurchase or refinancing of securities. The company had $5 million available under a previous shelf registration statement. The company currently has $805 million available under the shelf registration statement filed in June 2003.

In September 2003 Energy East issued $200 million of 6.75% unsecured notes due in September 2033 under the shelf registration statements described above. The notes were issued as part of an exchange of securities for $156.36 million aggregate principal amount of the company's 7.75% Putable Asset Term Securities (PATS), putable/callable November 15, 2003 from the holders thereof. The remaining cash proceeds were used to finance the cancellation of the related call option with respect to the exchange of the PATS, to finance expenses associated with the offering and for general corporate purposes. Energy East plans to call the remaining PATS in mid-November and expects to fund the transaction with proceeds from the sale of certain nonutility businesses and short-term debt.

In August 2003 Energy East entered into a fixed-to-floating interest rate swap on a portion of the company's 8 1/4% junior subordinated debt securities. The company receives a fixed rate of 8 1/4% and will pay a rate based on the three-month London Interbank Offered Rate (LIBOR) plus 2.00% on a notional amount of $250 million through July 2031.

In August 2003 Energy East terminated a fixed-to-floating interest rate swap on it 5.75% notes due November 2006. The company received $4.2 million, the value of the swap on the date of termination, that it will amortize over the remaining life of the notes.

Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

In August 2003 CMP issued $35.7 million of Series E Medium Term Notes at a fixed rate of 5.1%, due August 2013. Through financial instruments issued in March 2003 CMP locked in the 10-year treasury rate component of that financing at a fixed rate of 4.105%, which reduced the effective rate on the notes by 10 basis points. The proceeds from the notes were used to help repay $50 million of medium term notes that matured in August 2003.

In March 2003 NYSEG filed a shelf registration statement with the SEC to sell up to $300 million in an unspecified combination of debt and preferred stock. NYSEG plans to use the net proceeds from the sale of securities under this shelf registration primarily for the retirement or repurchase of certain of its indebtedness or preferred stock, the reduction of short-term debt and other general corporate purposes. NYSEG had $50 million available under a previous shelf registration statement. NYSEG currently has $150 million available under the shelf registration statement filed in March 2003.

In April 2003 NYSEG redeemed, at a premium, $50 million of 7.55% Series first mortgage bonds callable on April 1, 2003, using commercial paper. In 2003 NYSEG redeemed $100 million of 7.45% Series first mortgage bonds: $23 million was redeemed at par on June 30, 2003, pursuant to a sinking fund provision in NYSEG's mortgage indenture and $77 million was redeemed at a premium on July 15, 2003. As of September 30, 2003, NYSEG had redeemed all of its outstanding first mortgage bonds. NYSEG intends to discharge its first mortgage indenture in the fourth quarter of 2003.

In May 2003 NYSEG issued $200 million of 5 3/4% unsecured notes due in May 2023 under the shelf registration statements described above. The proceeds of this unsecured issuance were used to refund commercial paper that was used in April 2003 to redeem the $50 million of 7.55% Series first mortgage bonds, and to redeem in June and July 2003 the $100 million of 7.45% Series first mortgage bonds.

NYSEG will amortize, over the term of the 5 3/4% unsecured notes, a $1.4 million premium on the redemption of its 7.55% Series first mortgage bonds, a $2.7 million premium on the redemption of its 7.45% Series first mortgage bonds and related unamortized debt expenses and debt issuance costs for both redemptions.



In January 2003 RG&E used an equity contribution from its parent, RGS Energy, along with internally generated funds, to pay off the remaining $80 million balance of a 7% promissory note that was due in 2014.

During the first quarter of 2003 RG&E paid at maturity $40 million of first mortgage bonds using temporary cash investments and internally generated funds. RG&E filed a shelf registration statement with the SEC in May 2003 to sell up to $300 million in debt. RG&E plans to use the net proceeds from the sale of securities under that shelf registration for general corporate purposes, such as retirement or repurchase of certain of its indebtedness or preferred stock, reduction of short-term debt and additions to working capital. RG&E had $75 million available under a previous shelf registration statement. RG&E currently has $300 million available under the shelf registration statement filed in May 2003.

In July 2003 RG&E paid at maturity $40 million of first mortgage bonds using primarily temporary cash investments and short-term debt.



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

In September 2003 RG&E issued $75 million of 6 3/8% first mortgage bonds due September 2033 under the shelf registration statements mentioned above. A portion of the net proceeds was used to repay short-term debt, including short-term debt that was issued to pay $40 million of first mortgage bonds that matured in July 2003. RG&E used the remainder of the net proceeds for general corporate purposes.

(b) Results of Operations

|Three months ended September 30(Thousands, except per share amounts) | 2003     | 2002     | Change
|-------------------------------------------------------------------- | -------- | -------- | ------
|Operating Revenues                                                   | $903,124 | $939,625 | (4%)  
|Operating Income                                                     | $72,229  | $116,050 | (38%) 
|Income from Continuing Operations                                    | $2,084   | $25,264  | (92%) 
|Net (Loss) Income                                                    | $(5,979) | $23,742  | (125%)
|Average Common Shares Outstanding, basic                             | 145,684  | 144,621  | 1%    
|Earnings Per Share From Continuing Operations, basic                 | $.01     | $.17     | (94%) 
|(Loss) Earnings Per Share, basic and diluted                         | $(.04)   | $.16     | (125%)
|Dividends Paid Per Share                                             | $.25     | $.24     | 4%    

Earnings for the quarter in 2003 decreased 20 cents per share compared to earnings for the quarter in 2002. Earnings from continuing operations for the quarter in 2003 were 1 cent per share compared to 17 cents per share for the prior year quarter. In keeping with its focus on regulated electric and natural gas delivery businesses, during the past few years the company has been systematically exiting certain noncore businesses. In the third quarter of 2003 the company recognized a loss from discontinued operations of 5 cents per share for two businesses classified as held for sale. The loss from discontinued operations included an estimated after tax loss on disposal of $7 million for the two businesses. In October 2003 Energetix sold its Griffith Oil subsidiary at an estimated after tax loss of $5 million and in November 2003 Berkshire Propane sold its remaining assets at an estimated after tax loss of $2 million. The proceeds from the sales of approximately $80 million will be used to pay down debt.

In addition to the effect of the businesses held for sale, earnings from continuing operations for the 2003 quarter were 7 cents per share lower due to a decrease in electric deliveries resulting from normal summer weather in the third quarter of 2003 compared to an abnormally warm summer last year. Earnings also decreased due to higher noncash stock-based compensation expense of 7 cents per share due to an increase in the price of the company's common stock and lower noncash pension income of 4 cents per share.



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

|Nine months ended September 30(Thousands, except per share amounts) | 2003       | 2002       | Change
|------------------------------------------------------------------- | ---------- | ---------- | ------
|Operating Revenues                                                  | $3,397,501 | $2,679,784 | 27%   
|Operating Income                                                    | $489,104   | $436,144   | 12%   
|Income From Continuing Operations                                   | $161,445   | $136,065   | 19%   
|Net Income                                                          | $157,202   | $134,634   | 17%   
|Average Common Shares Outstanding, basic                            | 145,400    | 126,489    | 15%   
|Earnings Per Share From Continuing Operations, basic                | $1.11      | $1.07      | 4%    
|Earnings Per Share, basic and diluted                               | $1.08      | $1.06      | 2%    
|Dividends Paid Per Share                                            | $.75       | $.72       | 4%    

Due to the merger completed in June 2002, the company's results of operations include RGS Energy beginning with July 2002.

Earnings per share for the nine months in 2003 increased 2 cents compared to the prior year period. Earnings from continuing operations for the nine months in 2003 were $1.11 per share compared to $1.07 per share for the nine months of the prior year. In the third quarter of 2003 the company recognized a loss from discontinued operations of 5 cents per share for two businesses classified as held for sale.

The increase in earnings from continuing operations was primarily the result of 9 cents per share for higher electric and natural gas deliveries due to colder winter weather in the first quarter of 2003. A decrease in the cost of natural gas, which includes NYSEG's natural gas supply charge that went into effect October 1, 2002, added 6 cents per share to earnings. Integration savings and other cost control efforts added 6 cents per share to earnings. The increase in earnings also includes 7 cents per share for a loss from the early retirement of debt in 2002 and 6 cents per share from the writedown of an investment in NEON Communications in 2002. The earnings increase was reduced 11 cents per share due to electric rate decreases, substantially all from an annualized reduction of $205 million ordered by the NYPSC for NYSEG, the company's largest utility. Earnings were further reduced 12 cents per share due to lower noncash pension income and 5 cents per share due to lower transmission revenues.



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

Operating Results for the Electric Delivery Business

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours         | 7,841    | 8,049    | (3%)  
|Operating Revenues                         | $680,206 | $741,338 | (8%)  
|Operating Expenses                         | $589,619 | $612,188 | (4%)  
|Operating Income                           | $90,587  | $129,150 | (30%) 

Operating revenues were $61 million lower for the quarter as a result of reductions of $16 million due to lower deliveries because of cooler summer weather, $11 million due to lower retail rates, $14 million caused by the elimination in 2002 of the partial amortization of NYSEG's asset sale gain account, which was used to fund a portion of NYSEG's price reduction effective March 1, 2002, and $5 million as a result of the net effect of customers choosing alternate suppliers and customers choosing the bundled rate option.

The $23 million decrease in operating expenses for the quarter was primarily due to decreases in purchased power of $31 million due to customers choosing alternate suppliers. Higher prices that increased purchased power expense were offset by decreased purchases due to lower deliveries. Lower noncash pension income of $6 million increased operating expenses for the quarter.

|Nine months ended September 30(Thousands) | 2003       | 2002       | Change
|----------------------------------------- | ---------- | ---------- | ------
|Retail Deliveries - Megawatt-hours        | 23,072     | 19,345     | 19%   
|Operating Revenues                        | $2,078,953 | $1,876,742 | 11%   
|Operating Expenses                        | $1,728,856 | $1,517,477 | 14%   
|Operating Income                          | $350,097   | $359,265   | (3%)  

Operating revenues were $202 million higher for the nine months as a result of the addition of RG&E delivery revenues of $343 million. That increase was partially offset by decreases of $17 million because CMP is no longer the standard-offer provider for the supply of electricity effective March 2002, $59 million due to the combined effects of NYSEG's price reduction, effective March 1, 2002, and customers choosing alternate suppliers, $32 million due to the elimination in 2002 of the partial amortization of an asset sale gain account that was used to fund a portion of NYSEG's price reduction effective in March 2002 and $13 million due to lower transmission revenues.

The $211 million increase in operating expenses for the nine months was primarily due to the addition of RG&E operating expenses of $282 million and lower noncash pension income of $28 million. Those amounts were partially offset by decreases in purchased power of $17 million because CMP is no longer the standard-offer provider for the supply of electricity effective March 2002 and $29 million due to the effect of customers choosing alternate suppliers partially offset by increases caused by both higher market prices and higher retail deliveries because of colder winter weather. Operating expenses also decreased $17 million due to integration savings and cost control efforts, $6 million because of a decrease in wholesale nonutility generator purchases and $4 million due to reduced transmission congestion costs. RG&E deferred expenditures of $23 million during the second quarter and $8 million during the third quarter for



Management's discussion and analysis of financial condition and results of operations

Energy East Corporation

restoration work resulting from a severe ice storm in April 2003. Also during the third quarter this year RG&E deferred $8 million of purchased power costs in connection with a scheduled refueling outage for Ginna that began in September 2003 and was completed in October 2003.

Operating Results for the Natural Gas Delivery Business

|Three months ended September 30(Thousands) | 2003      | 2002      | Change
|------------------------------------------ | --------- | --------- | ------
|Retail Deliveries - Dekatherms             | 26,550    | 29,859    | (11%) 
|Operating Revenues                         | $148,504  | $132,983  | 12%   
|Operating Expenses                         | $166,355  | $148,606  | 12%   
|Operating (Loss)                           | $(17,851) | $(15,623) | 14%   

Operating revenues were $16 million higher for the quarter because of increases of $18 million primarily due to gas cost recovery provisions.

Operating expenses increased $18 million for the quarter primarily due to higher natural gas costs of $13 million because of market conditions and the effect of various rate case deferrals.

|Nine months ended September 30(Thousands) | 2003       | 2002     | Change
|----------------------------------------- | ---------- | -------- | ------
|Retail Deliveries - Dekatherms            | 154,792    | 116,318  | 33%   
|Operating Revenues                        | $1,052,672 | $643,038 | 64%   
|Operating Expenses                        | $917,924   | $562,007 | 63%   
|Operating Income                          | $134,748   | $81,031  | 66%   

Operating revenues were $410 million higher for the nine months primarily due to the addition of RG&E delivery revenues of $213 million and increases of $72 million due to higher retail deliveries because of colder weather, $112 million primarily due to gas cost recovery provisions and $8 million due to an increase in prices for wholesale sales because of market conditions.

Operating expenses increased $356 million for the nine months primarily due to the addition of RG&E operating expenses of $178 million, higher natural gas costs of $114 million due to market conditions net of the effect of various rate case deferrals and $43 million due to higher retail deliveries because of colder winter weather.



Item 1.  Financial Statements

Central Maine Power CompanyCondensed Consolidated Statements of Income - (Unaudited)

|                                    | Three Months | Nine Months
|----------------------------------- | ------------ | -----------
|                                    |              |            
|Periods ended September 30          | 2003         | 2002       
|                                    |              |            
|(Thousands)                         |              |            
|Operating Revenues                  |              |            
|Sales and services                  | $145,715     | $153,663   
|Operating Expenses                  |              |            
|Electricity purchased               | 59,104       | 61,745     
|Other operating expenses            | 44,238       | 44,006     
|Maintenance                         | 6,249        | 8,828      
|Depreciation and amortization       | 10,282       | 10,168     
|Other taxes                         | 4,869        | 5,816      
|                                    |              |            
|Total Operating Expenses            | 124,742      | 130,563    
|                                    |              |            
|Operating Income                    | 20,973       | 23,100     
|Other (Income)                      | (1,195)      | (1,322)    
|Other Deductions                    | 331          | 301        
|Interest Charges, Net               | 6,531        | 6,794      
|                                    |              |            
|Income Before Income Taxes          | 15,306       | 17,327     
|Income Taxes                        | 5,737        | 5,955      
|                                    |              |            
|Net Income                          | 9,569        | 11,372     
|Preferred Stock Dividends           | 361          | 361        
|                                    |              |            
|Earnings Available for Common Stock | $9,208       | $11,011    
|                                    |              |            





Central Maine Power CompanyCondensed Consolidated Balance Sheets - (Unaudited)

|                                              | Sept. 30,  
2003 | Dec. 31,  
2002
|--------------------------------------------- | ---------------- | ---------------
|                                              |                  |                
|(Thousands)                                   |                  |                
|Assets                                        |                  |                
|Current Assets                                |                  |                
|Cash and cash equivalents                     | $14,700          | $20,415        
|Accounts receivable, net                      | 95,295           | 124,711        
|Materials and supplies, at average cost       | 7,064            | 7,096          
|Accumulated deferred income tax benefits, net | 702              | 1,902          
|Prepayments and other current assets          | 6,022            | 6,411          
|                                              |                  |                
|Total Current Assets                          | 123,783          | 160,535        
|                                              |                  |                
|Utility Plant, at Original Cost               |                  |                
|Electric                                      | 1,330,550        | 1,316,023      
|Less accumulated depreciation                 | 523,648          | 499,381        
|                                              |                  |                
|Net Utility Plant in Service                  | 806,902          | 816,642        
|Construction work in progress                 | 6,628            | 2,952          
|                                              |                  |                
|Total Utility Plant                           | 813,530          | 819,594        
|                                              |                  |                
|Other Property                                | 5,874            | 5,880          
|                                              |                  |                
|Investment in Associated Companies, at Equity | 23,878           | 27,137         
|                                              |                  |                
|Regulatory and Other Assets                   |                  |                
|Regulatory assets                             |                  |                
|Nuclear plant obligations                     | 173,668          | 211,268        
|Unfunded future income taxes                  | 105,612          | 101,791        
|Unamortized loss on debt reacquisitions       | 8,894            | 9,722          
|Demand-side management program costs          | 5,634            | 8,394          
|Environmental remediation costs               | 3,306            | 4,440          
|Nonutility generator termination agreement    | 6,257            | 7,195          
|Other                                         | 60,454           | 58,259         
|                                              |                  |                
|Total regulatory assets                       | 363,825          | 401,069        
|                                              |                  |                
|Other assets                                  |                  |                
|Goodwill, net                                 | 325,580          | 325,580        
|Prepaid pension benefits                      | 31,854           | 23,124         
|Other                                         | 28,595           | 23,404         
|                                              |                  |                
|Total other assets                            | 386,029          | 372,108        
|                                              |                  |                
|Total Regulatory and Other Assets             | 749,854          | 773,177        
|                                              |                  |                
|Total Assets                                  | $1,716,919       | $1,786,323     
|                                              |                  |                





Central Maine Power Company
Condensed Consolidated Balance Sheets - (Unaudited)

|                                           | Sept. 30, 2003 | Dec. 31,  
2002
|------------------------------------------ | -------------- | ---------------
|                                           |                |                
|(Thousands)                                |                |                
|Liabilities                                |                |                
|Current Liabilities                        |                |                
|Current portion of long-term debt          | $22,912        | $52,975        
|Accounts payable and accrued liabilities   | 42,349         | 45,551         
|Interest accrued                           | 2,056          | 6,056          
|Taxes accrued                              | 1,369          | 6,118          
|Other                                      | 46,976         | 48,575         
|                                           |                |                
|Total Current Liabilities                  | 115,662        | 159,275        
|                                           |                |                
|Regulatory and Other Liabilities           |                |                
|Regulatory liabilities                     |                |                
|Deferred income taxes                      | 106,775        | 112,119        
|Gain on sale of generation assets          | 85,935         | 112,009        
|Other                                      | 15,239         | 11,926         
|                                           |                |                
|Total regulatory liabilities               | 207,949        | 236,054        
|                                           |                |                
|Other liabilities                          |                |                
|Deferred income taxes                      | 27,744         | 4,605          
|Nuclear plant obligations                  | 173,668        | 211,268        
|Other postretirement benefits              | 74,872         | 71,236         
|Environmental remediation costs            | 2,867          | 2,987          
|Other                                      | 127,053        | 127,986        
|                                           |                |                
|Total other liabilities                    | 406,204        | 418,082        
|                                           |                |                
|Total Regulatory and Other Liabilities     | 614,153        | 654,136        
|                                           |                |                
|Long-term debt                             | 315,381        | 291,796        
|                                           |                |                
|Total Liabilities                          | 1,045,196      | 1,105,207      
|                                           |                |                
|Commitments                                | -              | -              
|Preferred Stock
 Preferred stock           | 35,571         | 35,571         
|Capital in excess of par value             | (2,582)        | (2,723)        
|Common Stock Equity
 Common stock          | 156,057        | 156,057        
|Capital in excess of par value             | 485,353        | 485,297        
|Retained earnings                          | 22,092         | 31,682         
|Accumulated other comprehensive (loss)     | (24,768)       | (24,768)       
|                                           |                |                
|Total Common Stock Equity                  | 638,734        | 648,268        
|                                           |                |                
|Total Liabilities and Stockholder's Equity | $1,716,919     | $1,786,323     
|                                           |                |                





Central Maine Power CompanyCondensed Consolidated Statements of Cash Flows - (Unaudited)

|Nine months ended September 30                                                     | 2003     | 2002    
|---------------------------------------------------------------------------------- | -------- | --------
|                                                                                   |          |         
|(Thousands)                                                                        |          |         
|Operating Activities                                                               |          |         
|Net income                                                                         | $36,492  | $39,947 
|Adjustments to reconcile net income to net cash
  provided by operating activities |          |         
|Depreciation and amortization                                                      | 46,106   | 50,122  
|Income taxes and investment tax credits deferred, net                              | 15,172   | 10,635  
|Pension expense                                                                    | 6,270    | 1,849   
|Changes in current operating assets and liabilities                                |          |         
|Accounts receivable, net                                                           | 29,416   | 24,662  
|Inventory                                                                          | 32       | 384     
|Prepayments and other current assets                                               | 389      | (523)   
|Accounts payable and accrued liabilities                                           | (13,014) | (22,190)
|Interest accrued                                                                   | (4,000)  | (2,790) 
|Taxes accrued                                                                      | (4,749)  | 10,796  
|Other current liabilities                                                          | (1,591)  | 6,965   
|Asset sale gain amortization                                                       | (26,074) | (32,148)
|Prepaid pension benefits                                                           | (15,000) | -       
|Other assets                                                                       | (8,133)  | (6,699) 
|Other liabilities                                                                  | 3,853    | (15,127)
|                                                                                   |          |         
|Net Cash Provided by Operating Activities                                          | 65,169   | 65,883  
|                                                                                   |          |         
|Investing Activities                                                               |          |         
|Utility plant additions                                                            | (18,489) | (28,390)
|Other                                                                              | 222      | 128     
|                                                                                   |          |         
|Net Cash Used in Investing Activities                                              | (18,267) | (28,262)
|                                                                                   |          |         
|Financing Activities                                                               |          |         
|Long-term note issuances                                                           | 35,700   | 105,000 
|Long-term note repayments                                                          | (52,235) | (50,887)
|Notes payable three months or less, net                                            | 10,000   | (13,000)
|Notes payable issuances                                                            | -        | 5,000   
|Notes payable repayments                                                           | -        | (23,500)
|Dividends on common and preferred stock                                            | (46,082) | (54,195)
|                                                                                   |          |         
|Net Cash Used in Financing Activities                                              | (52,617) | (31,582)
|                                                                                   |          |         
|Net (Decrease) Increase in Cash and Cash Equivalents                               | (5,715)  | 6,039   
|Cash and Cash Equivalents, Beginning of Period                                     | 20,415   | 20,777  
|                                                                                   |          |         
|Cash and Cash Equivalents, End of Period                                           | $14,700  | $26,816 
|                                                                                   |          |         





Central Maine Power CompanyCondensed Consolidated Statements of Retained Earnings - (Unaudited)

|Nine months ended September 30    | 2003    | 2002   
|--------------------------------- | ------- | -------
|                                  |         |        
|(Thousands)                       |         |        
|Balance, Beginning of Period      | $31,682 | $31,304
|Add net income                    | 36,492  | 39,947 
|                                  |         |        
|                                  | 68,174  | 71,251 
|Deduct Dividends on Capital Stock |         |        
|Preferred                         | 1,082   | 1,082  
|Common                            | 45,000  | 53,113 
|                                  |         |        
|                                  | 46,082  | 54,195 
|                                  |         |        
|Balance, End of Period            | $22,092 | $17,056
|                                  |         |        





Central Maine Power CompanyCondensed Consolidated Statements of Comprehensive Income - (Unaudited)



|                                                                                                                       | Three Months | Nine Months
|---------------------------------------------------------------------------------------------------------------------- | ------------ | -----------
|                                                                                                                       |              |            
|Periods ended September 30                                                                                             | 2003         | 2002       
|                                                                                                                       |              |            
|(Thousands)                                                                                                            |              |            
|Net income                                                                                                             | $9,569       | $11,372    
|Other comprehensive income, net of tax                                                                                 |              |            
|Net unrealized gain on derivatives qualified as
   hedges, net of income tax in 2003 of $(631)
   for the three months | 915          | -          
|                                                                                                                       |              |            
|Total other comprehensive income                                                                                       | 915          | -          
|                                                                                                                       |              |            
|Comprehensive Income                                                                                                   | $10,484      | $11,372    
|                                                                                                                       |              |            





Item 2.

Central Maine Power Company

(a) Liquidity and Capital Resources

Restructuring
See Energy East Corporation's Item 2(a), Restructuring, for this discussion.



Electric Delivery BusinessRegional Transmission Organization: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.



FERC Standard Market Design: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.



Transmission Planning and Expansion and Generation Interconnection: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.











Investing and Financing ActivitiesInvesting Activities: Capital spending for the nine months ended September 30, 2003, was $18 million. Capital spending is projected to be $42 million for 2003, and is expected to be paid for with internally generated funds. Capital spending will be primarily for the extension of energy delivery service, necessary improvements to existing facilities, compliance with environmental requirements and governmental mandates and merger integration.

Financing Activities: In August 2003 CMP issued $35.7 million of Series E Medium Term Notes at a fixed rate of 5.1%, due August 2013. Through financial instruments issued in March 2003 CMP locked in the 10-year treasury rate component of that financing at a fixed rate of 4.105%, which reduced the effective rate on the notes by 10 basis points. The proceeds from the notes were used to help repay $50 million of medium term notes that matured in August 2003.



Management's discussion and analysis of financial condition and results of operations

Central Maine Power Company

(b) Results of Operations

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours         | 2,310    | 2,267    | 2%    
|Operating Revenues                         | $145,715 | $153,663 | (5%)  
|Operating Expenses                         | $124,742 | $130,563 | (4%)  
|Operating Income                           | $20,973  | $23,100  | (9%)  
|Earnings Available for Common Stock        | $9,208   | $11,011  | (16%) 

Earnings for the quarter decreased approximately $2 million primarily as a result of lower operating revenues.

The $8 million reduction in operating revenues was primarily the result of a $4 million decrease due to lower retail rates pursuant to the Alternative Rate Plan, a $2 million decrease in accrued transmission congestion revenues and demand-side management (DSM) revenues because of lower costs and a $1 million decrease from lower sales of nonutility generator (NUG) entitlement power.

The $6 million decrease in operating expenses for the quarter was primarily the result of lower amortization of storm and DSM costs of $4 million and a reduction in purchased power costs of $2 million.

|Nine months ended September 30(Thousands) | 2003     | 2002     | Change
|----------------------------------------- | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours        | 6,684    | 6,502    | 3%    
|Operating Revenues                        | $457,391 | $493,485 | (7%)  
|Operating Expenses                        | $380,637 | $415,392 | (8%)  
|Operating Income                          | $76,754  | $78,093  | (2%)  
|Earnings Available for Common Stock       | $35,410  | $38,865  | (9%)  

Earnings for the nine months decreased $3 million as a result of lower revenues and prior year income tax adjustments.

The $36 million decrease in operating revenues was primarily the result of CMP no longer being the standard-offer provider for the supply of electricity for residential and small commercial class customers effective March 2002, which reduced revenues $17 million; lower revenues from NUG entitlement sales of $6 million; lower rates pursuant to the Alternative Rate Plan of $8 million; a decrease in accrued DSM revenues of $4 million due to lower costs; and a decrease in transmission congestion costs of $3 million.

The $35 million decrease in operating expenses is primarily the result of CMP no longer being the standard-offer provider for the supply of electricity effective March 2002, which reduced operating expenses $17 million; a decrease in NUG power purchases of $6 million; lower amortization of ice storm expenses of $4 million; reduced transmission congestion costs of $4 million; and lower payroll-related expenses of $3 million.



Item 1.  Financial Statements

New York State Electric & Gas CorporationCondensed Balance Sheets - (Unaudited)

|                                              | Sept. 30,  
2003 | Dec. 31,  
2002
|--------------------------------------------- | ---------------- | ---------------
|                                              |                  |                
|(Thousands)                                   |                  |                
|Assets                                        |                  |                
|Current Assets                                |                  |                
|Cash and cash equivalents                     | $17,409          | $11,490        
|Special deposits                              | 31,786           | 44,205         
|Accounts receivable, net                      | 238,774          | 260,189        
|Fuel, at average cost                         | 49,252           | 29,000         
|Materials and supplies, at average cost       | 5,970            | 5,573          
|Accumulated deferred income tax benefits, net | 4,493            | 4,232          
|Prepayments                                   | 39,602           | 26,571         
|                                              |                  |                
|Total Current Assets                          | 387,286          | 381,260        
|                                              |                  |                
|Utility Plant, at Original Cost               |                  |                
|Electric                                      | 2,578,110        | 2,551,775      
|Natural gas                                   | 681,170          | 671,321        
|Common                                        | 119,525          | 121,661        
|                                              |                  |                
|                                              | 3,378,805        | 3,344,757      
|Less accumulated depreciation                 | 1,428,370        | 1,371,892      
|                                              |                  |                
|Net Utility Plant in Service                  | 1,950,435        | 1,972,865      
|Construction work in progress                 | 48,108           | 40,166         
|                                              |                  |                
|Total Utility Plant                           | 1,998,543        | 2,013,031      
|                                              |                  |                
|Other Property and Investments, Net           | 42,430           | 41,365         
|                                              |                  |                
|Regulatory and Other Assets                   |                  |                
|Regulatory assets                             |                  |                
|Unfunded future income taxes                  | 15,327           | 20,467         
|Unamortized loss on debt reacquisitions       | 39,797           | 35,631         
|Environmental remediation costs               | 75,334           | 52,434         
|Other                                         | 67,090           | 23,563         
|                                              |                  |                
|Total regulatory assets                       | 197,548          | 132,095        
|                                              |                  |                
|Other assets                                  |                  |                
|Goodwill, net                                 | 11,199           | 11,199         
|Prepaid pension benefits                      | 437,010          | 395,586        
|Other                                         | 55,687           | 78,890         
|                                              |                  |                
|Total other assets                            | 503,896          | 485,675        
|                                              |                  |                
|Total Regulatory and Other Assets             | 701,444          | 617,770        
|                                              |                  |                
|Total Assets                                  | $3,129,703       | $3,053,426     
|                                              |                  |                





New York State Electric & Gas Corporation
Condensed Balance Sheets - (Unaudited)

|                                                     | Sept. 30,  
2003 | Dec. 31,  
2002
|---------------------------------------------------- | ---------------- | ---------------
|                                                     |                  |                
|(Thousands)                                          |                  |                
|Liabilities                                          |                  |                
|Current Liabilities                                  |                  |                
|Current portion of long-term debt                    | $209             | $702           
|Notes payable                                        | 9,000            | 64,000         
|Accounts payable and accrued liabilities             | 153,941          | 169,884        
|Interest accrued                                     | 18,371           | 12,289         
|Taxes accrued                                        | 6,854            | 11,091         
|Other                                                | 73,969           | 58,577         
|                                                     |                  |                
|Total Current Liabilities                            | 262,344          | 316,543        
|                                                     |                  |                
|Regulatory and Other Liabilities                     |                  |                
|Regulatory liabilities                               |                  |                
|Deferred income taxes                                | 50,944           | 26,199         
|Gain on sale of generation assets                    | 51,390           | 40,638         
|Other                                                | 15,673           | 25,036         
|                                                     |                  |                
|Total regulatory liabilities                         | 118,007          | 91,873         
|                                                     |                  |                
|Other liabilities                                    |                  |                
|Deferred income taxes                                | 356,922          | 347,355        
|Other postretirement benefits                        | 205,788          | 197,193        
|Environmental remediation costs                      | 98,000           | 75,100         
|Other                                                | 59,716           | 56,683         
|                                                     |                  |                
|Total other liabilities                              | 720,426          | 676,331        
|                                                     |                  |                
|Total Regulatory and Other Liabilities               | 838,433          | 768,204        
|                                                     |                  |                
|Long-term debt                                       | 1,066,181        | 1,017,902      
|                                                     |                  |                
|Total Liabilities                                    | 2,166,958        | 2,102,649      
|                                                     |                  |                
|Commitments                                          | -                | -              
|Preferred Stock
 Redeemable solely at NYSEG's option | 10,159           | 10,159         
|Common Stock Equity
 Common stock                    | 430,057          | 430,057        
|Capital in excess of par value                       | 277,447          | 277,297        
|Retained earnings                                    | 227,014          | 206,519        
|Accumulated other comprehensive income               | 18,068           | 26,745         
|                                                     |                  |                
|Total Common Stock Equity                            | 952,586          | 940,618        
|                                                     |                  |                
|Total Liabilities and Stockholder's Equity           | $3,129,703       | $3,053,426     
|                                                     |                  |                





New York State Electric & Gas CorporationCondensed Statements of Income - (Unaudited)



|                                    | Three Months | Nine Months
|----------------------------------- | ------------ | -----------
|                                    |              |            
|Periods ended September 30          | 2003         | 2002       
|                                    |              |            
|(Thousands)                         |              |            
|Operating Revenues                  |              |            
|Electric                            | $367,457     | $389,216   
|Natural gas                         | 39,170       | 35,675     
|                                    |              |            
|Total Operating Revenues            | 406,627      | 424,891    
|                                    |              |            
|Operating Expenses                  |              |            
|Electricity purchased               | 214,811      | 229,019    
|Natural gas purchased               | 21,772       | 19,854     
|Other operating expenses            | 57,855       | 42,259     
|Maintenance                         | 14,489       | 19,799     
|Depreciation and amortization       | 25,136       | 24,624     
|Other taxes                         | 29,297       | 28,996     
|                                    |              |            
|Total Operating Expenses            | 363,360      | 364,551    
|                                    |              |            
|Operating Income                    | 43,267       | 60,340     
|Other (Income)                      | 836          | (1,804)    
|Other Deductions                    | 224          | 3,142      
|Interest Charges, Net               | 19,546       | 20,879     
|                                    |              |            
|Income Before Income Taxes          | 22,661       | 38,123     
|Income Taxes                        | 2,408        | 14,827     
|                                    |              |            
|Net Income                          | 20,253       | 23,296     
|Preferred Stock Dividends           | 99           | 99         
|                                    |              |            
|Earnings Available for Common Stock | $20,154      | $23,197    
|                                    |              |            





New York State Electric & Gas CorporationCondensed Statements of Cash Flows - (Unaudited

|Nine months ended September 30                                                     | 2003      | 2002     
|---------------------------------------------------------------------------------- | --------- | ---------
|                                                                                   |           |          
|(Thousands)                                                                        |           |          
|Operating Activities                                                               |           |          
|Net income                                                                         | $110,792  | $106,061 
|Adjustments to reconcile net income to net cash
  provided by operating activities |           |          
|Depreciation and amortization                                                      | 98,591    | 90,245   
|Income taxes and investment tax credits deferred, net                              | 47,072    | 24,201   
|Pension income                                                                     | (33,047)  | (53,116) 
|Changes in current operating assets and liabilities                                |           |          
|Accounts receivable, net                                                           | 21,415    | 77,155   
|Inventory                                                                          | (20,649)  | 2,778    
|Prepayments                                                                        | (13,031)  | (10,406) 
|Accounts payable and accrued liabilities                                           | (15,943)  | 5,982    
|Interest accrued                                                                   | 6,082     | 3,694    
|Taxes accrued                                                                      | (4,237)   | 12,426   
|Other current liabilities                                                          | 15,392    | 7,616    
|Other assets                                                                       | (57,177)  | (7,967)  
|Other liabilities                                                                  | 10,823    | (5,343)  
|                                                                                   |           |          
|Net Cash Provided by Operating Activities                                          | 166,083   | 253,326  
|                                                                                   |           |          
|Investing Activities                                                               |           |          
|Utility plant additions                                                            | (63,574)  | (62,480) 
|Sale of generation assets                                                          | -         | 59,442   
|Proceeds from sale of utility plant                                                | 379       | 6,348    
|Special deposits                                                                   | 5,156     | (5,058)  
|Other                                                                              | 271       | 2,798    
|                                                                                   |           |          
|Net Cash (Used in) Provided by Investing Activities                                | (57,768)  | 1,050    
|                                                                                   |           |          
|Financing Activities                                                               |           |          
|Notes payable three months or less, net                                            | (55,000)  | -        
|Repayments of first mortgage bonds, including net premiums                         | (154,085) | (177,025)
|Long-term note issuances                                                           | 196,986   | -        
|Dividends on common and preferred stock                                            | (90,297)  | (60,297) 
|                                                                                   |           |          
|Net Cash Used in Financing Activities                                              | (102,396) | (237,322)
|                                                                                   |           |          
|Net Increase in Cash and Cash Equivalents                                          | 5,919     | 17,054   
|Cash and Cash Equivalents, Beginning of Period                                     | 11,490    | 21,617   
|                                                                                   |           |          
|Cash and Cash Equivalents, End of Period                                           | $17,409   | $38,671  
|                                                                                   |           |          





New York State Electric & Gas CorporationCondensed Statements of Retained Earnings - (Unaudited)

|Nine months ended September 30    | 2003     | 2002    
|--------------------------------- | -------- | --------
|                                  |          |         
|(Thousands)                       |          |         
|Balance, Beginning of Period      | $206,519 | $164,197
|Add net income                    | 110,792  | 106,061 
|                                  |          |         
|                                  | 317,311  | 270,258 
|Deduct Dividends on Capital Stock |          |         
|Preferred                         | 297      | 297     
|Common                            | 90,000   | 90,000  
|                                  |          |         
|                                  | 90,297   | 90,297  
|Balance, End of Period            | $227,014 | $179,961
|                                  |          |         





New York State Electric & Gas CorporationCondensed Statements of Comprehensive Income - (Unaudited)

|                                                                                                                                                                                                                                                                 | Three Months | Nine Months
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------ | -----------
|                                                                                                                                                                                                                                                                 |              |            
|Periods ended September 30                                                                                                                                                                                                                                       | 2003         | 2002       
|                                                                                                                                                                                                                                                                 |              |            
|(Thousands)                                                                                                                                                                                                                                                      |              |            
|Net income                                                                                                                                                                                                                                                       | $20,253      | $23,296    
|Other comprehensive income, net of tax                                                                                                                                                                                                                           |              |            
|Net unrealized gains (losses) on investments, net of
    income tax (expense) benefit for the three months
    of $(180) in 2003 and $433 in 2002 and for the
    nine months of $(345) in 2003 and $790 in 2002                                                 | 271          | (653)      
|Minimum pension liability adjustment, net of income
    tax (expense) for the three and nine months
    in 2003 of $(73)                                                                                                                                         | 111          | -          
|Unrealized (losses) gains on derivatives qualified
   as hedges, net of income tax benefit (expense) for
   the three months of $9,390 in 2003 and $(5,001)
   in 2002 and for the nine months of $(6,793) in 
   2003 and $(7,820) in 2002                      | (14,159)     | 7,541      
|Reclassification adjustment for derivative (gains)
   losses included in net income, net of income
   tax expense (benefit) for the three months of
   $1,377 in 2003 and $(1,447) in 2002 and for
   the nine months of $12,966 in 2003 and $(6,220)
   in 2002 | (2,076)      | 2,181      
|                                                                                                                                                                                                                                                                 |              |            
|Net unrealized (losses) gains on derivatives
   qualified as hedges                                                                                                                                                                                              | (16,235)     | 9,722      
|                                                                                                                                                                                                                                                                 |              |            
|Total other comprehensive (loss) income                                                                                                                                                                                                                          | (15,853)     | 9,069      
|                                                                                                                                                                                                                                                                 |              |            
|Comprehensive Income                                                                                                                                                                                                                                             | $4,400       | $32,365    
|                                                                                                                                                                                                                                                                 |              |            





Item 2.

New York State Electric & Gas Corporation

(a) Liquidity and Capital Resources

Restructuring
See Energy East Corporation's Item 2(a), Restructuring, for this discussion.



Electric Delivery BusinessRegional Transmission Organization: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.

















Manufactured Gas Plant Remediation Recovery: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.



Natural Gas Delivery Business

Critical Accounting Policies(See NYSEG's report on Form 10-K for fiscal year ended December 31, 2002, Item 7, Critical Accounting Policies.)





Management's discussion and analysis of financial condition and results of operations

New York State Electric & Gas Corporation



Investing ActivitiesInvesting Activities: Capital spending for the first nine months of 2003 was $64 million. Capital spending is projected to be $95 million for 2003 and is expected to be paid for with internally generated funds. Capital spending will be primarily for necessary improvements to existing facilities, the extension of energy delivery service, compliance with environmental requirements and governmental mandates and merger integration.

Financing Activities: In March 2003 NYSEG filed a shelf registration statement with the SEC to sell up to $300 million in an unspecified combination of debt and preferred stock. NYSEG plans to use the net proceeds from the sale of securities under this shelf registration primarily for the retirement or repurchase of certain of its indebtedness or preferred stock, the reduction of short-term debt and other general corporate purposes. NYSEG had $50 million available under a previous shelf registration statement. NYSEG currently has $150 million available under the shelf registration statement filed in March 2003.

In April 2003 NYSEG redeemed, at a premium, $50 million of 7.55% Series first mortgage bonds callable on April 1, 2003, using commercial paper. In 2003 NYSEG redeemed $100 million of 7.45% Series first mortgage bonds: $23 million was redeemed at par on June 30, 2003, pursuant to a sinking fund provision in NYSEG's mortgage indenture and $77 million was redeemed at a premium on July 15, 2003. As of September 30, 2003, NYSEG had redeemed all of its outstanding first mortgage bonds. NYSEG intends to discharge its first mortgage indenture in the fourth quarter of 2003.

In May 2003 NYSEG issued $200 million of 5 3/4% unsecured notes due in May 2023 under the shelf registration statements described above. The proceeds of this unsecured issuance were used to refund commercial paper that was used in April 2003 to redeem the $50 million of 7.55% Series first mortgage bonds, and to redeem in June and July 2003 the $100 million of 7.45% Series first mortgage bonds.

NYSEG will amortize, over the term of the 5 3/4% unsecured notes, a $1.4 million premium on the redemption of its 7.55% Series first mortgage bonds, a $2.7 million premium on the redemption of its 7.45% Series first mortgage bonds and related unamortized debt expenses and debt issuance costs for both redemptions.

(b) Results of Operations

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Operating Revenues                         | $406,627 | $424,891 | (4%)  
|Operating Income                           | $43,267  | $60,340  | (28%) 
|Earnings Available for Common Stock        | $20,154  | $23,197  | (13%) 

Third quarter 2003 earnings were $3 million lower than for the prior year quarter primarily due to $3 million for lower noncash pension income and $2 million for the net effect of higher purchased power costs and customers choosing alternate suppliers. Those earnings reductions were partially offset by a $3 million increase as a result of a change in estimate of prior year income taxes to reflect actual 2002 taxes as filed and revisions to the estimated effective tax rate for 2003.



Management's discussion and analysis of financial condition and results of operations

New York State Electric & Gas Corporation

|Nine months ended September 30(Thousands) | 2003       | 2002       | Change
|----------------------------------------- | ---------- | ---------- | ------
|Operating Revenues                        | $1,395,722 | $1,407,589 | (1%)  
|Operating Income                          | $234,034   | $264,790   | (12%) 
|Earnings Available for Common Stock       | $110,495   | $105,764   | 4%    

Earnings increased $5 million for the nine months primarily due to increases of $14 million due to higher electric and natural gas retail deliveries primarily because of colder winter weather, $10 million due to the effect of a loss from the early retirement of debt in 2002, $9 million for integration savings and cost control efforts, $4 million for the recovery of natural gas prices through the gas supply charge and $6 million due to lower interest charges as a result of refinancings and repayments of first mortgage bonds. Those increases were partially offset by earnings reductions of $23 million caused by an electric price reduction effective March 1, 2002, $7 million for lower transmission revenues, and $10 million for lower noncash pension income.

Operating Results for the Electric Delivery Business

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours         | 3,672    | 3,752    | (2%)  
|Operating Revenues                         | $367,457 | $389,216 | (6%)  
|Operating Expenses                         | $317,559 | $323,493 | (2%)  
|Operating Income                           | $49,898  | $65,723  | (24%) 

The $22 million decrease in operating revenues for the quarter is primarily due to a decrease of $14 million caused by the elimination in 2002 of the partial amortization of an asset sale gain account, which was used to fund a portion of a price reduction effective March 1, 2002, and a decrease of $5 million as a result of the net effect of customers choosing alternate suppliers and customers choosing the bundled rate option.

Operating expenses decreased $6 million for the quarter primarily as a result of decreases in purchased power of $31 million due to customers choosing alternate suppliers. That decrease was partially offset by higher electricity prices that increased purchased power $17 million and an increase of $6 million due to lower noncash pension income.

|Nine months ended September 30(Thousands) | 2003       | 2002       | Change
|----------------------------------------- | ---------- | ---------- | ------
|Retail Deliveries - Megawatt-hours        | 11,079     | 10,813     | 2%    
|Operating Revenues                        | $1,111,777 | $1,184,687 | (6%)  
|Operating Expenses                        | $918,310   | $943,825   | (3%)  
|Operating Income                          | $193,467   | $240,862   | (20%) 

Operating revenues for the nine months decreased $73 million primarily due to a $59 million decrease because of the combined effects of a price reduction, effective March 1, 2002, and the net effect of customers choosing alternate suppliers and customers choosing the bundled rate option, a $32 million decrease due to the elimination in 2002 of the partial amortization of an asset sale gain account that was used to fund a portion of the price reduction effective in March 2002 and a $12 million reduction in transmission revenues. Those decreases were partially offset by higher retail deliveries of $26 million because of colder winter weather.

Management's discussion and analysis of financial condition and results of operations

New York State Electric & Gas Corporation

The $26 million decrease in operating expenses for the nine months was primarily the result of a $29 million decrease in purchased power resulting from customers choosing alternate suppliers partially offset by increases due to both higher market prices and higher retail deliveries because of colder winter weather, a $12 million decrease due to integration savings and cost control efforts and a $4 million decrease due to the elimination of a regulatory amortization of DSM program costs. Those decreases were partially offset by an $18 million increase because of lower noncash pension income.

Operating Results for the Natural Gas Delivery Business

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Dekatherms             | 6,620    | 6,653    | -     
|Operating Revenues                         | $39,170  | $35,675  | 10%   
|Operating Expenses                         | $45,801  | $41,058  | 12%   
|Operating (Loss)                           | $(6,631) | $(5,383) | 23%   

The $3 million increase in operating revenues for the quarter is primarily due to an increase of $5 million due to gas cost recovery resulting from a natural gas supply charge partially offset by a $2 million decrease because of lower wholesale sales.

Operating expenses increased $5 million for the quarter primarily due to a $4 million increase in the cost of natural gas purchased, after various deferrals of gas costs for future recovery, partially offset by a $2 million decrease in the cost of wholesale natural gas purchased due to decreased sales.

|Nine months ended September 30(Thousands) | 2003     | 2002     | Change
|----------------------------------------- | -------- | -------- | ------
|Retail Deliveries - Dekatherms            | 44,429   | 39,435   | 13%   
|Operating Revenues                        | $283,945 | $222,902 | 27%   
|Operating Expenses                        | $243,378 | $198,974 | 22%   
|Operating Income                          | $40,567  | $23,928  | 70%   

Operating revenues increased $61 million for the nine months primarily due to higher retail deliveries of $32 million because of colder winter weather, gas cost recovery of $27 million resulting from a natural gas supply charge and $9 million due to an increase in prices for wholesale sales because of market conditions.

Operating expenses for the nine months increased $44 million primarily due to a $21 million increase in natural gas purchased for higher retail deliveries because of colder winter weather this year and a $22 million increase in the cost of natural gas, after various deferrals of gas costs for future recovery.



Item 1.

Rochester Gas and Electric CorporationCondensed Statements of Income - (Unaudited)

|                                                  | Three Months | Nine Months
|------------------------------------------------- | ------------ | -----------
|                                                  |              |            
|Periods ended September 30                        | 2003         | 2002       
|                                                  |              |            
|(Thousands)                                       |              |            
|Operating Revenues                                |              |            
|Electric                                          | $167,016     | $198,429   
|Natural gas                                       | 36,622       | 32,939     
|                                                  |              |            
|Total Operating Revenues                          | 203,638      | 231,368    
|                                                  |              |            
|Operating Expenses                                |              |            
|Electricity purchased and fuel used in generation | 43,215       | 57,707     
|Natural gas purchased                             | 17,687       | 15,692     
|Other operating expenses                          | 67,387       | 65,155     
|Maintenance                                       | 15,141       | 10,368     
|Depreciation and amortization                     | 26,464       | 25,990     
|Other taxes                                       | 18,572       | 21,034     
|                                                  |              |            
|Total Operating Expenses                          | 188,466      | 195,946    
|                                                  |              |            
|Operating Income                                  | 15,172       | 35,422     
|Other (Income)                                    | (1,274)      | (5,590)    
|Other Deductions                                  | 423          | 318        
|Interest Charges, Net                             | 15,307       | 15,319     
|                                                  |              |            
|Income Before Income Taxes                        | 716          | 25,375     
|Income Taxes                                      | 3,577        | 8,088      
|                                                  |              |            
|Net (Loss) Income                                 | (2,861)      | 17,287     
|Preferred Stock Dividends                         | 513          | 925        
|                                                  |              |            
|(Loss) Earnings Available for Common Stock        | $(3,374)     | $16,362    
|                                                  |              |            





Rochester Gas and Electric CorporationCondensed Balance Sheets - (Unaudited)

|                                           | Sept. 30, 2003 | Dec. 31,  
2002
|------------------------------------------ | -------------- | ---------------
|                                           |                |                
|(Thousands)                                |                |                
|Assets                                     |                |                
|Current Assets                             |                |                
|Cash and cash equivalents                  | $32,072        | $86,385        
|Special deposits                           | 3,333          | 2,841          
|Accounts receivable, net                   | 88,350         | 126,227        
|Affiliate receivable                       | 38,224         | 20,330         
|Fuel, at average cost                      | 37,350         | 20,555         
|Materials and supplies, at average cost    | 6,393          | 6,467          
|Prepayments and other current assets       | 53,279         | 35,324         
|                                           |                |                
|Total Current Assets                       | 259,001        | 298,129        
|                                           |                |                
|Utility Plant, at Original Cost            |                |                
|Electric                                   | 2,042,746      | 1,935,778      
|Natural gas                                | 520,468        | 515,829        
|Common                                     | 158,651        | 157,416        
|                                           |                |                
|                                           | 2,721,865      | 2,609,023      
|Less accumulated depreciation              | 1,429,668      | 1,530,729      
|                                           |                |                
|Net Utility Plant in Service               | 1,292,197      | 1,078,294      
|Construction work in progress              | 163,143        | 133,195        
|                                           |                |                
|Total Utility Plant                        | 1,455,340      | 1,211,489      
|                                           |                |                
|Other Property and Investments, Net        | 259,678        | 226,373        
|                                           |                |                
|Regulatory and Other Assets                |                |                
|Regulatory assets                          |                |                
|Nuclear plant obligations                  | 246,679        | 313,412        
|Unfunded future income taxes               | 49,144         | 52,058         
|Environmental remediation costs            | 11,559         | 11,290         
|Nonutility generator termination agreement | 102,993        | 109,587        
|Asset retirement obligation                | 157,550        | -              
|Other                                      | 174,757        | 163,655        
|                                           |                |                
|Total regulatory assets                    | 742,682        | 650,002        
|                                           |                |                
|Other assets                               |                |                
|Prepaid pension benefits                   | 11,662         | -              
|Other                                      | 61,423         | 66,104         
|                                           |                |                
|Total other assets                         | 73,085         | 66,104         
|                                           |                |                
|Total Regulatory and Other Assets          | 815,767        | 716,106        
|                                           |                |                
|Total Assets                               | $2,789,786     | $2,452,097     
|                                           |                |                





Rochester Gas and Electric Corporation
Condensed Balance Sheets - (Unaudited)

|                                                                                                  | Sept. 30,  
2003 | Dec. 31,  
2002
|------------------------------------------------------------------------------------------------- | ---------------- | ---------------
|                                                                                                  |                  |                
|(Thousands)                                                                                       |                  |                
|Liabilities                                                                                       |                  |                
|Current Liabilities                                                                               |                  |                
|Current portion of preferred stock subject to mandatory redemption   requirements                 | $1,250           | -              
|Current portion of long-term debt                                                                 | -                | $159,935       
|Accounts payable and accrued liabilities                                                          | 94,085           | 67,787         
|Affiliate payable                                                                                 | 9,959            | 7,365          
|Interest accrued                                                                                  | 13,528           | 10,509         
|Taxes accrued                                                                                     | 1,733            | 3,451          
|Other                                                                                             | 29,102           | 40,523         
|                                                                                                  |                  |                
|Total Current Liabilities                                                                         | 149,657          | 289,570        
|                                                                                                  |                  |                
|Regulatory and Other Liabilities                                                                  |                  |                
|Regulatory liabilities                                                                            |                  |                
|Deferred income taxes                                                                             | 260,253          | 18,179         
|Other                                                                                             | 47,334           | 56,617         
|                                                                                                  |                  |                
|Total regulatory liabilities                                                                      | 307,587          | 74,796         
|                                                                                                  |                  |                
|Other liabilities                                                                                 |                  |                
|Deferred income taxes                                                                             | -                | 225,325        
|Nuclear waste disposal                                                                            | 103,692          | 102,745        
|Other postretirement benefits                                                                     | 70,671           | 65,983         
|Environmental remediation costs                                                                   | 22,356           | 22,356         
|Asset retirement obligation                                                                       | 430,569          | -              
|Other                                                                                             | 44,521           | 59,721         
|                                                                                                  |                  |                
|Total other liabilities                                                                           | 671,809          | 476,130        
|                                                                                                  |                  |                
|Total Regulatory and Other Liabilities                                                            | 979,396          | 550,926        
|                                                                                                  |                  |                
|Preferred stock subject to mandatory redemption requirements                                      | 23,750           | -              
|Long-term debt                                                                                    | 826,485          | 752,254        
|                                                                                                  |                  |                
|Total Liabilities                                                                                 | 1,979,288        | 1,592,750      
|                                                                                                  |                  |                
|Commitments                                                                                       | -                | -              
|Preferred Stock
 Redeemable solely at RG&E's option
 Subject to mandatory redemption requirements | 47,000 
-        | 47,000 
25,000 
|Common Stock Equity
 Common stock                                                                 | 194,429          | 194,429        
|Capital in excess of par value                                                                    | 556,101          | 555,889        
|Retained earnings                                                                                 | 130,206          | 154,267        
|Treasury stock, at cost                                                                           | (117,238)        | (117,238)      
|                                                                                                  |                  |                
|Total Common Stock Equity                                                                         | 763,498          | 787,347        
|                                                                                                  |                  |                
|Total Liabilities and Stockholder's Equity                                                        | $2,789,786       | $2,452,097     
|                                                                                                  |                  |                





Rochester Gas and Electric CorporationCondensed Statements of Cash Flows - (Unaudited)

|Nine months ended September 30                                                     | 2003      | 2002     
|---------------------------------------------------------------------------------- | --------- | ---------
|                                                                                   |           |          
|(Thousands)                                                                        |           |          
|Operating Activities                                                               |           |          
|Net income                                                                         | $13,302   | $21,006  
|Adjustments to reconcile net income to net cash
  provided by operating activities |           |          
|Depreciation and amortization                                                      | 133,852   | 124,035  
|Writedown of investments                                                           | -         | 13,718   
|Income taxes and investment tax credits deferred, net                              | 13,918    | (4,877)  
|Pension income                                                                     | (13,326)  | (15,652) 
|Excess earnings                                                                    | 44,051    | -        
|Changes in current operating assets and liabilities                                |           |          
|Accounts receivable, net                                                           | 23,974    | 34,564   
|Inventory                                                                          | (16,721)  | (2,458)  
|Prepayments                                                                        | (26,935)  | (28,175) 
|Accounts payable and accrued liabilities                                           | 28,413    | 2,273    
|Interest accrued                                                                   | 3,019     | 4,571    
|Taxes accrued                                                                      | (1,718)   | (2,685)  
|Other current liabilities                                                          | (12,487)  | (6,413)  
|Other assets                                                                       | (54,158)  | (36,305) 
|Other liabilities                                                                  | 23,121    | 9,108    
|                                                                                   |           |          
|Net Cash Provided by Operating Activities                                          | 158,305   | 112,710  
|                                                                                   |           |          
|Investing Activities                                                               |           |          
|Utility plant additions                                                            | (74,115)  | (97,140) 
|Sale of generation assets                                                          | -         | 50,484   
|Nuclear generating plant decommissioning fund                                      | (13,012)  | (13,012) 
|Other                                                                              | (2,781)   | (4,875)  
|                                                                                   |           |          
|Net Cash Used in Investing Activities                                              | (89,908)  | (64,543) 
|                                                                                   |           |          
|Financing Activities                                                               |           |          
|Repayments of first mortgage bonds, including net premiums                         | (80,000)  | (100,000)
|Long-term note issuances                                                           | 75,000    | 125,000  
|Repayment of promissory notes                                                      | (79,935)  | (3,260)  
|Dividends on common and preferred stock                                            | (37,775)  | (57,829) 
|                                                                                   |           |          
|Net Cash Used in Financing Activities                                              | (122,710) | (36,089) 
|                                                                                   |           |          
|Net (Decrease) Increase in Cash and Cash Equivalents                               | (54,313)  | 12,078   
|Cash and Cash Equivalents, Beginning of Period                                     | 86,385    | 19,462   
|                                                                                   |           |          
|Cash and Cash Equivalents, End of Period                                           | $32,072   | $31,540  
|                                                                                   |           |          





Rochester Gas and Electric CorporationCondensed Statements of Retained Earnings - (Unaudited)



|Nine months ended September 30    | 2003     | 2002    
|--------------------------------- | -------- | --------
|                                  |          |         
|(Thousands)                       |          |         
|Balance, Beginning of Period      | $154,267 | $174,054
|Add net income                    | 13,302   | 21,006  
|                                  |          |         
|                                  | 167,569  | 195,060 
|Deduct Dividends on Capital Stock |          |         
|Preferred                         | 2,363    | 2,775   
|Common                            | 35,000   | 66,154  
|                                  |          |         
|                                  | 37,363   | 68,929  
|Balance, End of Period            | $130,206 | $126,131
|                                  |          |         





Item 2.

Rochester Gas and Electric Corporation

(a) Liquidity and Capital Resources

Restructuring
See Energy East Corporation's Item 2(a), Restructuring, for this discussion.



Electric Delivery BusinessRegional Transmission Organization: See Energy East Corporation's Item 2(a), Electric Delivery Business, for this discussion.



























Management's discussion and analysis of financial condition and results of operations

Rochester Gas and Electric Corporation

Natural Gas Delivery Business





Critical Accounting Policies(See RG&E's report on Form 10-K for fiscal year ended December 31, 2002, Item 7, Critical Accounting Policies.)



Investing and Financing ActivitiesInvesting Activities: Capital spending for the first nine months of 2003 was $74 million, including nuclear fuel. Capital spending is projected to be $146 million for 2003, including nuclear fuel, and is expected to be paid for primarily with internally generated funds. Capital spending will be primarily for the extension of energy delivery service, necessary improvements to existing facilities, compliance with environmental requirements and governmental mandates and merger integration.

Financing Activities: In January 2003 RG&E used an equity contribution from its parent, RGS Energy, along with internally generated funds, to pay off the remaining $80 million balance of a 7% promissory note that was due in 2014.

During the first quarter of 2003 RG&E paid at maturity $40 million of first mortgage bonds using temporary cash investments and internally generated funds. RG&E filed a shelf registration statement with the SEC in May 2003 to sell up to $300 million in debt. RG&E plans to use the net proceeds from the sale of securities under that shelf registration for general corporate purposes, such as retirement or repurchase of certain of its indebtedness or preferred stock, reduction of short-term debt and additions to working capital. RG&E had $75 million available under a previous shelf registration statement. RG&E currently has $300 million available under the shelf registration statement filed in May 2003.

In July 2003 RG&E paid at maturity $40 million of first mortgage bonds using primarily temporary cash investments and short-term debt.

In September 2003 RG&E issued $75 million of 6 3/8% first mortgage bonds due September 2033 under the shelf registration statements mentioned above. A portion of the net proceeds was used to repay short-term debt, including short-term debt that was issued to pay $40 million of first mortgage bonds that matured in July 2003. RG&E used the remainder of the net proceeds for general corporate purposes.



Management's discussion and analysis of financial condition and results of operations

Rochester Gas and Electric Corporation

(b) Results of Operations

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Operating Revenues                         | $203,638 | $231,368 | (12%) 
|Operating Income                           | $15,172  | $35,422  | (57%) 
|(Loss) Earnings Available for Common Stock | $(3,374) | $16,362  | (121%)

Earnings decreased $20 million for the quarter primarily due to lower electric deliveries because of cooler summer weather in 2003, which reduced earnings $10 million, higher operating expenses that lowered earnings $3 million and a change in estimate of prior year income taxes to reflect actual 2002 taxes as filed that decreased earnings $3 million.

|Nine months ended September 30(Thousands) | 2003     | 2002     | Change
|----------------------------------------- | -------- | -------- | ------
|Operating Revenues                        | $758,944 | $728,466 | 4%    
|Operating Income                          | $83,287  | $77,799  | 7%    
|Earnings Available for Common Stock       | $10,939  | $18,231  | (40%) 

Earnings for the nine months decreased $7 million. The recognition of the terms and conditions of the NYPSC rate order for RG&E, which became effective January 15, 2003, reduced earnings $30 million. That amount includes $26 million for excess electric earnings and related interest. (See RG&E 2002 Electric and Gas Rate Proceeding.) That decrease was partially offset by an increase of $14 million primarily for higher natural gas deliveries because of colder winter weather in 2003. Earnings for the nine months also increased $9 million due to a writedown of software development costs that reduced earnings in 2002.

Operating Results for the Electric Delivery Business

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours         | 1,859    | 2,031    | (8%)  
|Operating Revenues                         | $167,016 | $198,429 | (16%) 
|Operating Expenses                         | $147,279 | $158,095 | (7%)  
|Operating Income                           | $19,737  | $40,334  | (51%) 

The $31 million decrease in operating revenues for the quarter is primarily due to a $26 million reduction in deliveries because of cooler summer weather in 2003.

Operating expenses decreased $11 million for the quarter primarily due to lower fuel costs of $14 million due to decreased purchases, partially offset by a $3 million increase associated with the establishment of a regulatory asset related to RG&E's property tax sharing mechanisms that reduced operating expenses in 2002. During the third quarter this year RG&E deferred $8 million for continued restoration work resulting from a severe ice storm in April 2003 and $8 million of purchased power costs in connection with a scheduled refueling outage for Ginna that began in September 2003 and was completed in October 2003.



Management's discussion and analysis of financial condition and results of operations

Rochester Gas and Electric Corporation

|Nine months ended September 30(Thousands) | 2003     | 2002     | Change
|----------------------------------------- | -------- | -------- | ------
|Retail Deliveries - Megawatt-hours        | 5,309    | 5,468    | (3%)  
|Operating Revenues                        | $509,694 | $534,986 | (5%)  
|Operating Expenses                        | $456,476 | $471,598 | (3%)  
|Operating Income                          | $53,218  | $63,388  | (16%) 

Operating revenues for the nine months decreased $25 million primarily due to lower deliveries because of cooler summer weather in 2003.

The $15 million decrease in operating expenses for the nine months was primarily due to lower fuel costs as a result of decreased purchases of $28 million and a scheduled refueling at the Ginna nuclear plant that added $10 million to operating costs in 2002 and $10 million due to a writedown of software development costs that also increased operating costs in 2002. Those decreases were partially offset by the recognition of terms and conditions of the NYPSC rate order for RG&E, which became effective January 15, 2003, and increased operating expenses $30 million, primarily for excess electric earnings. (See RG&E 2002 Electric and Gas Rate Proceeding.) RG&E deferred expenditures of $23 million during the second quarter and $8 million during the third quarter for restoration work resulting from a severe ice storm in April 2003. Also during the third quarter this year RG&E deferred $8 million of purchased power costs in connection with a scheduled refueling outage for Ginna that began in September 2003 and was completed in October 2003.

Operating Results for the Natural Gas Delivery Business

|Three months ended September 30(Thousands) | 2003     | 2002     | Change
|------------------------------------------ | -------- | -------- | ------
|Retail Deliveries - Dekatherms             | 4,845    | 5,067    | (4%)  
|Operating Revenues                         | $36,622  | $32,939  | 11%   
|Operating Expenses                         | $41,187  | $37,851  | 9%    
|Operating (Loss)                           | $(4,565) | $(4,912) | (7%)  

The $4 million increase in operating revenues for the quarter is primarily due to gas cost recovery of $2 million associated with higher commodity market prices and a $1 million increase due to higher delivery prices collected from customers effective in March 2003.

Operating expenses increased $3 million for the quarter primarily due to higher natural gas costs of $2 million mainly due to market conditions.



Management's discussion and analysis of financial condition and results of operations

Rochester Gas and Electric Corporation

|Nine months ended September 30(Thousands) | 2003     | 2002     | Change
|----------------------------------------- | -------- | -------- | ------
|Retail Deliveries - Dekatherms            | 39,192   | 34,957   | 12%   
|Operating Revenues                        | $249,250 | $193,480 | 29%   
|Operating Expenses                        | $219,181 | $179,069 | 22%   
|Operating Income                          | $30,069  | $14,411  | 109%  

Operating revenues increased $56 million for the nine months primarily due to higher retail deliveries of $26 million because of colder winter weather in 2003, gas cost recovery of $28 million associated with higher commodity market prices and a $4 million increase due to higher delivery prices collected from customers effective in March 2003.

Operating expenses for the nine months increased $40 million primarily due to higher natural gas purchases including $14 million for higher retail deliveries because of colder weather this year and a $26 million increase in the cost of natural gas due to market conditions.



Item 1.  Financial Statements

Notes to Condensed Financial Statements
for
Energy East Corporation
Central Maine Power Company
New York State Electric & Gas Corporation
Rochester Gas and Electric Corporation

Notes to Condensed Financial Statements of Registrants:

|Registrant  | Applicable Notes                         
|----------- | -----------------------------------------
|Energy East | 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13
|CMP         | 1, 3, 4, 5, 7, 8, 9, 10, 12, 13          
|NYSEG       | 1, 3, 4, 5, 7, 8, 9, 10 11, 12, 13       
|RG&E        | 1, 3, 4, 5, 7, 8, 9, 10, 12, 13          

Note 1. Unaudited Condensed Financial Statements

The accompanying unaudited condensed financial statements reflect all adjustments necessary, in the opinion of the management of the registrants, for a fair presentation of the interim results. All such adjustments are of a normal, recurring nature. The year-end condensed balance sheet data presented in this quarterly report was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

Energy East's financial statements and CMP's financial statements consolidate their majority-owned subsidiaries after eliminating all intercompany transactions.

The accompanying unaudited financial statements for each registrant should be read in conjunction with the financial statements and notes contained in the report on Form 10-K filed by each registrant for the year ended December 31, 2002. Due to the seasonal nature of the registrants' operations, financial results for interim periods are not necessarily indicative of trends for a 12-month period.

Note 2. Businesses Held for Sale

In keeping with its focus on regulated electric and natural gas delivery businesses, during the past few years the company has been systematically exiting certain noncore businesses. In the third quarter of 2003 the company recognized a loss from discontinued operations of 5 cents per share for two businesses classified as held for sale. The loss from discontinued operations included an estimated after tax loss on disposal of $7 million for the two businesses. In October 2003 Energetix sold its Griffith Oil subsidiary at an estimated after tax loss of $5 million and in November 2003 Berkshire Propane sold its remaining assets at an estimated after tax loss of $2 million. Both businesses and their assets were previously reported in the company's Other business segment.

|                                                                                                                                                                                                                   | Three Months       | Nine Months    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | ---------------
|                                                                                                                                                                                                                   |                    |                
|Periods ended September 30                                                                                                                                                                                         | 2003               | 2002           
|                                                                                                                                                                                                                   |                    |                
|(Thousands, except per share amounts)                                                                                                                                                                              |                    |                
|Revenue
  Griffith Oil
  Berkshire Propane                                                                                                                                                                         | $85,142 
$630      | $75,829 
$736  
|Expenses
  Griffith Oil
  Berkshire Propane                                                                                                                                                                        | $98,278 
$3,076    | $78,132 
$982  
|Other (income) and deductions and Interest charges, net
  Griffith Oil
  Berkshire Propane                                                                                                                         | $(95)
$70          | $407 
$32      
|Pretax income (loss) from businesses held for sale 
  Griffith Oil (including estimated loss on disposal 
    in 2003 of $11,041)
  Berkshire Propane (including estimated loss on disposal
    in 2003 of $2,075) | $(13,041)
$(2,516) | $(2,711)
$(277)
|Income Taxes
  Griffith Oil
  Berkshire Propane                                                                                                                                                                    | $(7,313)
$(181)    | $(1,352)
$(114)
|Losses from business held for sale
  Griffith Oil
  Berkshire Propane                                                                                                                                              | $(5,728)
$(2,335)  | $(1,359)
$(163)
|(Loss) Per Share from Discontinued Operations,
  basic and diluted                                                                                                                                                 | $(.05)             | $(.01)         

The major classes of assets and liabilities of the businesses held for sale included in the company's Condensed Consolidated Balance Sheet, as of September 30, 2003, are as follows:

|                                                                                  | Griffith
Oil     | Berkshire
Propane
|--------------------------------------------------------------------------------- | ---------------- | -----------------
|                                                                                  |                 
|Assets
  Other Property and Investments, net
  
Liabilities
  Current liabilities | $111,950
$32,248 | $4,809
$447      

Note 3. Restructuring

In the fourth quarter of 2002 the company recorded $41 million of restructuring expenses, including $5 million for CMP, $26 million for NYSEG and a total of $10 million for Berkshire Gas, CNG and SCG. The restructuring expenses would have been $36 million higher, however RG&E was required by an NYPSC order approving RGS Energy's merger with the company to defer its portion of the restructuring charge for future recovery in rates. As of September 30, 2003, all of the related involuntary severance liability of $9 million has been paid. The employee positions affected by the restructuring were identified in the fourth quarter of 2002. The restructuring expenses reduced the company's 2002 net income by $24 million. Included in those amounts are $20 million for a voluntary early retirement program that will be paid from the companies' pension plans and $3 million for an involuntary severance program, primarily for salaried employees of the company's six operating utilities, and $1 million for other associated costs.

The voluntary early retirement program resulted in a reduction of 486 employees in the first quarter of 2003. Collectively the voluntary early retirement and involuntary severance programs resulted in a reduction in overall employee headcount of 679, or 8%, in 2003, including 79 from CMP, 255 from NYSEG and 254 from RG&E.

Note 4. Other (Income) and Other Deductions

|                                             | Three Months | Nine Months
|-------------------------------------------- | ------------ | -----------
|                                             |              |            
|Periods ended September 30                   | 2003         | 2002       
|                                             |              |            
|(Thousands)                                  |              |            
|Energy East                                  |              |            
|Interest income                              | $(1,637)     | $(3,815)   
|Noncash returns                              | (520)        | (2,316)    
|Allowance for funds used during construction | (531)        | (1,083)    
|Gains from the sale of nonutility property   | (121)        | (7)        
|Earnings from equity investments             | (1,006)      | (980)      
|Miscellaneous                                | 316          | (1,229)    
|                                             |              |            
|Total other (income)                         | $(3,499)     | $(9,430)   
|                                             |              |            
|NYSEG early retirement of debt               | -            | -          
|Miscellaneous                                | $1,094       | $4,516     
|                                             |              |            
|Total other deductions                       | $1,094       | $4,516     
|                                             |              |            
|CMP                                          |              |            
|Interest income                              | $(142)       | $(461)     
|Noncash returns                              | (467)        | (131)      
|Earnings from equity investments             | (475)        | (702)      
|Miscellaneous                                | (111)        | (28)       
|                                             |              |            
|Total other (income)                         | $(1,195)     | $(1,322)   
|                                             |              |            
|Miscellaneous                                | $331         | $301       
|                                             |              |            
|Total other deductions                       | $331         | $301       
|                                             |              |            
|NYSEG                                        |              |            
|Interest income                              | $(276)       | $(765)     
|Noncash returns                              | (314)        | (26)       
|Miscellaneous                                | 1,426        | (1,013)    
|                                             |              |            
|Total other (income)                         | $836         | $(1,804)   
|                                             |              |            
|Early retirement of debt                     | -            | -          
|Miscellaneous                                | $224         | $3,142     
|                                             |              |            
|Total other deductions                       | $224         | $3,142     
|                                             |              |            



|                           | Three Months | Nine Months
|-------------------------- | ------------ | -----------
|                           |              |            
|Periods ended September 30 | 2003         | 2002       
|                           |              |            
|RG&E                       |              |            
|Interest income            | $(852)       | $(1,192)   
|Noncash returns            | -            | (2,159)    
|Miscellaneous              | (422)        | (2,239)    
|                           |              |            
|Total other (income)       | $(1,274)     | $(5,590)   
|                           |              |            
|Merger costs               | -            | $221       
|Miscellaneous              | $423         | 97         
|                           |              |            
|Total other deductions     | $423         | $318       
|                           |              |            

Note 5. Income Taxes

The company's effective tax rate for the quarter differed from the expected annual effective tax rate as a result of a change in estimate of prior year income taxes to reflect actual 2002 taxes as filed and revisions to the estimated effective tax rate for 2003, a pretax loss for the quarter and the tax effect related to businesses held for sale. The company has provided for taxes for the nine months at the expected annual effective tax rate of 39%.

CMP has provided for taxes for the quarter and nine months at the expected annual effective tax rate.

NYSEG's effective tax rate for the quarter differed from the expected annual effective tax rate primarily as a result of a change in estimate of prior year income taxes to reflect actual 2002 taxes as filed and revisions to the estimated effective tax rate for 2003. NYSEG has provided for taxes for the nine months at the expected annual effective tax rate.

RG&E's effective tax rate for the quarter differed from the expected annual effective tax rate primarily as a result of a change in estimate of prior year income taxes to reflect actual 2002 taxes as filed and a low level of pretax income for the quarter. RG&E has provided for taxes for the nine months at the expected annual effective tax rate.

Note 6. Basic and Diluted Earnings per Share

Basic earnings per share (EPS) is determined by dividing net income by the weighted-average number of shares of common stock outstanding during the period. The weighted-average common shares outstanding for diluted EPS include restricted stock awards and the incremental effect of stock options issued and exclude stock options issued in tandem with stock appreciation rights (SARs). However, all stock options are issued in tandem with SARs and, historically, substantially all stock option plan participants have exercised the SARs instead of the stock options. The numerator used in calculating basic and diluted EPS for each period is the reported net income. The reconciliation of basic and dilutive average common shares for each period follows:

|                                        | Three Months | Nine Months
|--------------------------------------- | ------------ | -----------
|                                        |              |            
|Periods ended September 30              | 2003         | 2002       
|                                        |              |            
|(Thousands)                             |              |            
|Basic average common shares outstanding | 145,684      | 144,621    
|Restricted stock awards                 | 217          | -          
|Potentially dilutive common shares      | 275          | 391        
|Options issued with SARs                | (275)        | (391)      
|                                        |              |            
|Dilutive average common shares          | 145,901      | 144,621    
|                                        |              |            

On February 13, 2003, the company issued 229,230 shares of its common stock to certain employees under its Restricted Stock Plan and recorded deferred compensation of $4.4 million based on the market price of $19.20 per share of common stock on the date of the award. An aggregate number of two million shares may be granted under the Restricted Stock Plan, subject to adjustment. Shares of restricted stock are awarded in the name of the employee, who has all the rights of a shareholder, subject to certain restrictions on transferability and a risk of forfeiture. The shares vest based on the conditions outlined in the restricted stock award grants, including the achievement of targeted shareholder returns, but no later than January 1, 2009.

Options to purchase shares of common stock are excluded from the determination of EPS when the exercise price of an option is greater than the average market price of a common share during the period. Shares excluded from the EPS calculation for the three months ended September 30 were: 2.4 million in 2003 and 2.1 million in 2002, and for the nine months ended September 30 were: 4.5 million in 2003 and 2.1 million in 2002.

Note 7. Accounts Receivable

Accounts receivable for the companies include unbilled revenues as follows: Energy East - consolidated unbilled revenues of $129 million at September 30, 2003, and $237 million at December 31, 2002; CMP - consolidated unbilled revenues of $20 million at September 30, 2003, and $33 million at December 31, 2002; NYSEG - unbilled revenues of $47 million at September 30, 2003, and $79 million at December 31, 2002; RG&E - unbilled revenues of $33 million at September 30, 2003, and $59 million at December 31, 2002.

Note 8. New Accounting Pronouncements

Statement 143: In June 2001 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations. Statement 143 requires an entity to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and to capitalize the cost by increasing the carrying amount of the related long-lived asset. The liability is adjusted to its present value periodically over time, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement the entity either settles the obligation at its recorded amount or incurs a gain or a loss.

The companies' adoption of Statement 143 as of January 1, 2003, did not have a material effect on their respective financial positions or results of operations. There was no effect on net income. The companies recognized various amounts on their balance sheets. Changes in the assumptions underlying the items shown in the following table could affect the balance sheet amounts and future costs related to the obligations.

|                                     | NYSEG    | RG&E       | Other  | Consolidated
Energy East
|------------------------------------ | -------- | ---------- | ------ | ------------------------
|                                     |          |            |        |                         
|(Thousands)                          |          |            |        |                         
|Asset retirement obligation          | $(539)   | $(413,988) | $(942) | $(415,469)              
|Regulatory asset                     | $350     | $139,611   | $942   | $140,903                
|Regulatory liability                 | $(3,689) | $(635)     | -      | $(4,324)                
|Increase in utility plant            | $30      | $74,064    | -      | $74,094                 
|Decrease in accumulated depreciation | $3,848   | $200,948   | -      | $204,796                

In addition to the asset retirement obligations, Energy East's utilities have and will continue to have cost of removal liabilities ($79 million for CMP, $298 million for NYSEG, $186 million for RG&E and $158 million for Other, as of September 30, 2003) embedded within accumulated depreciation pursuant to Statement of Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of Regulation.

Statement 150: In May 2003 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. Statement 150 requires that certain financial instruments be classified as liabilities in statements of financial position. Under previous guidance such instruments were classified as equity. In accordance with Statement 150, Energy East and RG&E are required to classify their mandatorily redeemable preferred stock as a liability on their statements of financial position, which they had previously classified as equity, and to recognize as interest expense distributions that they had previously recognized as dividends. Energy East has a consolidated $370 million of mandatorily redeemable preferred stock, including RG&E's $25 million of mandatorily redeemable preferred stock. Statement 150 was effective at the beginning of the first interim period beginning after June 15, 2003, for instruments existing when the Statement was issued. The companies' adoption of Statement 150 on July 1, 2003, did not have a material effect on their respective financial positions or results of operations.

Note 9. Supplemental Disclosure of Cash Flows Information

|                                                                                  | 2003                                | 2002                               
|--------------------------------------------------------------------------------- | ----------------------------------- | -----------------------------------
|                                                                                  |                                     |                                    
|(Thousands)                                                                       |                                     |                                    
|Cash paid during the nine months ended September 30:                              |                                     |                                    
|Interest, net of amounts capitalized
    Energy East
    CMP
    NYSEG
    RG&E   | $175,009 
$22,003 
$35,733 
$32,901 | $138,577 
$21,523 
$46,009 
$35,793
|Income taxes, net of benefits received
    Energy East
    CMP
    NYSEG
    RG&E | $18,526 
$11,834 
$21,935 
$(894)   | $20,744 
$(6,405)
$44,113 
$39,947 
|                                                                                  |                                     |                                    
|Energy East's Acquisition of RGS Energy                                           |                                     |                                    
|Fair value of assets acquired                                                     | -                                   | $3,264,093                         
|Liabilities assumed                                                               | -                                   | (1,826,528)                        
|Preferred stock of subsidiary                                                     | -                                   | (72,000)                           
|Common stock issued                                                               | -                                   | (612,082)                          
|Cash acquired                                                                     | -                                   | (72,086)                           
|                                                                                  |                                     |                                    
|Net cash paid for acquisition                                                     | -                                   | $681,397                           
|                                                                                  |                                     |                                    



Note 10. Goodwill and Other Intangible Assets

As required by Statement 142 both goodwill and intangible assets with indefinite lives (unamortized intangible assets) are tested at least annually for impairment. Intangible assets with finite lives are amortized (amortized intangible assets) and are reviewed for impairment. Annual impairment testing of goodwill was completed for Energy East, CMP and NYSEG and it was determined that there was no impairment of goodwill for the three companies at September 30, 2003. RG&E has no goodwill. The $17 million increase in the company's goodwill since December 31, 2002, was substantially due to the recognition of additional excess earnings in the electric segment, a preacquisition contingency for RG&E, partially offset by goodwill reclassified as assets held for sale.

|                                                  | ElectricDelivery      | Natural GasDelivery       | Other            | Total                        
|------------------------------------------------- | --------------------- | ------------------------- | ---------------- | -----------------------------
|Goodwill                                          |                       |                           |                  |                              
|September 30, 2003
   Energy East
   CMP
   NYSEG | $845,174 
$324,725 
- | $677,118 
-      
$11,199 | $12,456 
$855 
- | $1,534,748 
$325,580 
$11,199
|December 31, 2002
   Energy East
   CMP
   NYSEG  | $819,992 
$324,725 
- | $677,952 
-      
$11,199 | $20,229 
$855 
- | $1,518,173 
$325,580 
$11,199

Annual impairment testing of unamortized intangible assets was completed for Energy East, CMP, NYSEG and RG&E and it was determined that there was no impairment of unamortized intangible assets for the four companies at September 30, 2003.

The company's unamortized intangible assets had a carrying amount of $11 million at September 30, 2003, and primarily consisted of pension assets, and $17 million at December 31, 2002, and primarily consisted of trade names and pension assets. The company's amortized intangible assets had a gross carrying amount of $31 million at September 30, 2003, and $47 million at December 31, 2002, and primarily consisted of investments in pipelines and customer lists. The decreases in the carrying amounts of intangible assets since December 2003 relate to assets held for sale. Accumulated amortization was $12 million at September 30, 2003, and $15 million at December 31, 2002. Estimated amortization expense for intangible assets for the next five years is approximately $3 million for 2004, $2 million each year for 2005 through 2007 and $1 million for 2008.

CMP's unamortized intangible assets had a carrying amount of $2 million at September 30, 2003, and December 31, 2002, and consisted of pension assets. CMP's amortized intangible assets had a gross carrying amount and accumulated amortization of less than $0.3 million at September 30, 2003, and December 31, 2002, and primarily consist of technology rights. Estimated amortization expense for intangible assets is $9 thousand for each of the next five years, 2004 through 2008.

NYSEG's unamortized intangible assets had a carrying amount of $1.4 million at September 30, 2003, and $1.6 million at December 31, 2002, and primarily consisted of pension assets, franchises and consents. NYSEG's amortized intangible assets had a gross carrying amount of $1.5 million and accumulated amortization of $1 million at September 30, 2003, and December 31, 2002, and consisted of hydroelectric licenses. Estimated amortization expense for intangible assets for the next five years is $64 thousand each year for 2004 and 2005, $57 thousand for 2006 and $55 thousand each year for 2007 and 2008.

RG&E's amortized intangible assets had a gross carrying amount of $3 million and accumulated amortization of $2 million at September 30, 2003, and December 31, 2002, and consisted of water rights. Estimated amortization expense for intangible assets is $78 thousand for each of the next five years, 2004 through 2008.

Note 11. Environmental Liability

In the second quarter of 2003 NYSEG increased by approximately $23 million the liability to investigate and perform remediation, as necessary, at its known inactive gas manufacturing sites. NYSEG recorded a corresponding increase in its regulatory asset, net of insurance recoveries, since it expects to recover the net costs in rates. The increase is primarily based on a Proposed Remedial Action Plan issued by the New York State Department of Environmental Conservation (NYSDEC) for one of NYSEG's sites and a revised Feasibility Study NYSEG submitted to the NYSDEC for another of NYSEG's sites.

Note 12. Segment Information

Energy East's electric delivery business consists of its regulated transmission, distribution and generation operations in Maine and New York State; and its natural gas delivery business consists of its regulated transportation, storage and distribution operations in New York State, Connecticut, Maine and Massachusetts. Other includes: the company's corporate assets, interest income, interest expense and operating expenses; intersegment eliminations; and nonutility businesses.

CMP's electric delivery business, which it conducts in Maine, consists of its regulated transmission and distribution operations. Other consists of CMP's corporate assets.

NYSEG's electric delivery business consists of its regulated transmission, distribution and generation operations. Its natural gas delivery business consists of its regulated transportation, storage and distribution operations. NYSEG operates in New York State. Other consists of NYSEG's corporate assets.

RG&E's electric delivery business consists of its regulated transmission, distribution and generation operations. Its natural gas delivery business consists of its regulated transportation, storage and distribution operations. RG&E operates in New York State. Other consists of RG&E's corporate assets.

Selected information for Energy East's, CMP's, NYSEG's and RG&E's business segments is:

|                                                          | ElectricDelivery                       | Natural GasDelivery                 | Other                       | Total                                 
|--------------------------------------------------------- | -------------------------------------- | ----------------------------------- | --------------------------- | --------------------------------------
|(Thousands)                                               |                                        |                                     |                             |                                       
|Three Months Ended                                        |                                        |                                     |                             |                                       
|September 30, 2003                                        |                                        |                                     |                             |                                       
|Operating Revenues
   Energy East
   CMP
   NYSEG
   RG&E | $680,206 
$145,715 
$367,457 
$167,016 | $148,504 
-      
$39,170 
$36,622  | $74,414 
-      
-      
-  | $903,124 
$145,715 
$406,627 
$203,638
|Net Income (Loss)
   Energy East
   CMP
   NYSEG
   RG&E  | $27,693 
$9,569 
$25,592 
$5,172       | $(23,366)
-      
$(5,339)
$(8,033) | $(10,306)
-      
-      
- | $(5,979)
$9,569 
$20,253 
$(2,861)    



|                                                          | ElectricDelivery                               | Natural GasDelivery                    | Other                               | Total                                          
|--------------------------------------------------------- | ---------------------------------------------- | -------------------------------------- | ----------------------------------- | -----------------------------------------------
|(Thousands)                                               |                                                |                                        |                                     |                                                
|Three Months Ended (cont'd)                               |                                                |                                        |                                     |                                                
|September 30, 2002                                        |                                                |                                        |                                     |                                                
|Operating Revenues
   Energy East
   CMP
   NYSEG
   RG&E | $741,338 
$153,663 
$389,216 
$198,429         | $132,983 
-      
$35,675 
$32,939     | $65,304 
-      
-      
-          | $939,625 
$153,663 
$424,891 
$231,368         
|Net Income (Loss)
   Energy East
   CMP
   NYSEG
   RG&E  | $50,136 
$11,372 
$29,401 
$21,605             | $(20,544)
-      
$(6,105)
$(4,318)    | $(5,850)
-      
-      
-          | $23,742 
$11,372 
$23,296 
$17,287             
|Nine Months Ended                                         |                                                |                                        |                                     |                                                
|September 30, 2003                                        |                                                |                                        |                                     |                                                
|Operating Revenues
   Energy East
   CMP
   NYSEG
   RG&E | $2,078,953 
$457,391 
$1,111,777 
$509,694     | $1,052,672 
-      
$283,945 
$249,250 | $265,876 
-      
-      
-         | $3,397,501 
$457,391 
$1,395,722 
$758,944     
|Net Income (Loss)
   Energy East
   CMP
   NYSEG
   RG&E  | $120,268 
$36,492 
$93,315 
$2,852             | $42,257 
-      
$17,477 
$10,450      | $(5,323)
-      
-      
-          | $157,202 
$36,492 
$110,792 
$13,302           
|September 30, 2002                                        |                                                |                                        |                                     |                                                
|Operating Revenues
   Energy East
   CMP
   NYSEG
   RG&E | $1,876,742 
$493,485 
$1,184,687 
$534,986     | $643,038 
-      
$222,902 
$193,480   | $160,004 
-      
-      
-         | $2,679,784 
$493,485 
$1,407,589 
$728,466     
|Net Income (Loss)
   Energy East
   CMP
   NYSEG
   RG&E  | $144,732 
$39,947 
$104,211 
$18,218           | $18,601 
-      
$1,850 
$2,788        | $(28,699)
-      
-      
-         | $134,634 
$39,947 
$106,061 
$21,006           
|Total Assets                                              |                                                |                                        |                                     |                                                
|September 30, 2003
   Energy East
   CMP
   NYSEG
   RG&E | $6,876,217 
$1,708,274 
$2,261,483 
$2,175,283 | $3,221,134 
-      
$808,034 
$509,246 | $440,359 
$8,645 
$60,186 
$105,257 | $10,537,710 
$1,716,919 
$3,129,703 
$2,789,786
|December 31, 2002
   Energy East
   CMP
   NYSEG
   RG&E  | $6,582,234 
$1,777,727 
$2,256,343 
$1,811,146 | $3,201,235 
-      
$737,629 
$502,305 | $473,418 
$8,596 
$59,454 
$138,646 | $10,256,887 
$1,786,323 
$3,053,426 
$2,452,097

Note 13. Reclassifications

Certain amounts have been reclassified in the unaudited financial statements to conform with the 2003 presentation.



Forward-looking Statements

This Form 10-Q contains certain forward-looking statements that are based upon management's current expectations and information that is currently available. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements in certain circumstances. Whenever used in this report, the words "estimate," "expect," "believe," or similar expressions are intended to identify such forward-looking statements.

In addition to the assumptions and other factors referred to specifically in connection with such statements, factors that involve risks and uncertainties and that could cause actual results to differ materially from those contemplated in any forward-looking statements include, among others: the deregulation and continued regulatory unbundling of a vertically integrated industry; the companies' ability to compete in the rapidly changing and increasingly competitive electricity and/or natural gas utility markets; regulatory uncertainty in a politically-charged environment of changing energy prices; the operation of the New York Independent System Operator and ISO New England, Inc.; the operation of a regional transmission organization; the ability to recover nonutility generator and other costs; changes in fuel supply or cost and the success of strategies to satisfy power requirements now that most generation assets have been sold; the company's ability to expand its products and services, including its energy infrastructure in the Northeast; the company's ability to integrate the operations of Berkshire Energy Resources, CMP Group, Connecticut Energy Corporation, CTG Resources and RGS Energy; the company's ability to achieve enterprise-wide integration synergies; market risk; the ability to obtain adequate and timely rate relief; nuclear or environmental incidents; legal or administrative proceedings; changes in the cost or availability of capital; growth in the areas in which the companies are doing business; weather variations affecting customer energy usage; authoritative accounting guidance; acts of terrorists; and other considerations, such as the effect of the volatility in the equity markets on pension benefit cost, that may be disclosed from time to time in the companies' publicly disseminated documents and filings. The companies undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk (See report on Form 10-K for Energy East, CMP, NYSEG and RG&E for fiscal year ended December 31, 2002, Item 7A - Quantitative and Qualitative Disclosures About Market Risk.)

Commodity Price Risk: NYSEG's current electric rate plan offers retail customers choice in their electricity supply including a variable rate option, an option to purchase electricity supply from an alternative energy company, and a bundled rate option. Based on the results from the enrollment period that ended December 31, 2002, approximately 30% of NYSEG's total electric load is now provided by an alternative energy company or at the market price. NYSEG's exposure to fluctuations in the market price of electricity is limited to the load required to serve those customers who select the bundled rate option, which combines delivery and supply service at a fixed price. For calendar years 2003 and 2004 the supply component is based on average electricity forward prices for 2003 and 2004 during September 2002, plus a 35% margin to cover the costs and risk that NYSEG is assuming by providing a bundled rate option to retail customers. NYSEG has actively hedged the load required to serve customers who select the bundled rate option. As of November 1, 2003, NYSEG's load was 98% hedged for on-peak periods and 86% hedged for off-peak periods in 2003 and 94% hedged for on-peak periods and 83% hedged for off-peak periods in 2004. A fluctuation of $1.00 per megawatt-hour in the price of electricity would change earnings by $0.1 million in 2003 and $0.8 million in 2004. The percent of NYSEG's hedged load is based on NYSEG's load forecasts, which include certain assumptions such as historical weather patterns. Actual results could differ as a result of changes in the load compared to the load forecast.

RG&E faces commodity price risk that relates to market fluctuations in the price of electricity. Owned electric generation and long-term supply contracts significantly reduce RG&E's exposure to market fluctuations for procurement of its electric supply. As of November 1, 2003, RG&E's load was 96% hedged for on-peak periods and fully hedged for off-peak periods in 2003 and fully hedged for both on-peak and off-peak periods in 2004. A fluctuation of $1.00 per megawatt-hour in the price of on-peak electricity would change earnings by less than $0.1 million in 2003. The percent of RG&E's hedged load is based on RG&E's load forecasts, which include certain assumptions such as historical weather patterns. Actual results could differ as a result of changes in the load compared to the load forecast.

NYSEG and RG&E use natural gas futures and forwards to manage fluctuations in natural gas commodity prices and provide price stability to customers. The cost or benefit of natural gas futures and forwards is included in the commodity cost when the related sales commitments are fulfilled.

Item 4.  Controls and Procedures

The principal executive officers and principal financial officers of Energy East, CMP, NYSEG and RG&E evaluated the effectiveness of their respective company's disclosure controls and procedures as of the end of the period covered by this report. "Disclosure controls and procedures" are controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934, within the time periods specified in the Securities and Exchange Commission's rules and forms, is recorded, processed, summarized and reported, and is accumulated and communicated to the company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, they concluded that their respective company's disclosure controls and procedures are effective.

Energy East, CMP, NYSEG and RG&E each maintain a system of internal control over financial reporting designed to provide reasonable assurance to its management and board of directors regarding the preparation of reliable published financial statements and the safeguarding of assets against loss or unauthorized use. Each company's system of internal control over financial reporting contains self-monitoring mechanisms and actions are taken to correct deficiencies as they are identified. There were no changes in the companies' internal control over financial reporting that occurred during each company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the respective company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K(a)  Exhibits - See

(b)  The following reports on Form 8-K were filed during the quarter:

Energy East filed a Form 8-K dated July 25, 2003, to report certain information under Item 9, "Regulation FD Disclosure," and Item 12, "Disclosure of Results of Operations and Financial Condition."



Signatures

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

|Date:  November 12, 2003 | ENERGY EAST CORPORATION
                  (Registrant)
By /s/Robert E. Rude           Robert E. Rude
           Vice President and Controller
           (Principal Accounting Officer)            
|------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date:  November 12, 2003 | CENTRAL MAINE POWER COMPANY
                  (Registrant)
By /s/Curtis I. Call           Curtis I. Call
           Vice President, Controller & Treasurer
           (Principal Financial Officer)
|Date:  November 12, 2003 | NEW YORK STATE ELECTRIC & GAS CORPORATION
                  (Registrant)
By /s/Joseph J. Syta           Joseph J. Syta
           Controller and Treasurer
           (Principal Financial Officer)
|Date:  November 12, 2003 | ROCHESTER GAS AND ELECTRIC CORPORATION
                  (Registrant)
By /s/Joseph J. Syta           Joseph J. Syta
           Controller and Treasurer
           (Principal Financial Officer)   



EXHIBIT INDEX

The following exhibits are delivered with this report:

|Registrant                                | Exhibit No. | Description of Exhibit                                                                                                                                                                                                                                                   
|----------------------------------------- | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Energy East Corporation                   | 4-9         | Seventh Supplemental Indenture between the Company and JPMorgan Chase Bank (formerly The Chase Manhattan Bank), as Trustee, dated as of September 9, 2003, related to the Indenture between the Company and JPMorgan Chase Bank, as Trustee, dated as of August 31, 2000.
|                                          | (A)10-27    | Amended and Restated 2000 Stock Option Plan, effective October 15, 2003.                                                                                                                                                                                                 
|                                          | 31          | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|                                          | 32          | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|Central Maine Power Company               | 31          | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|                                          | 32          | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|New York State Electric & Gas
Corporation | 31          | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|                                          | 32          | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|Rochester Gas and Electric
  Corporation  | (A)10-23    | Supplemental Executive Retirement Program Amendment No. 3, effective as of January 1, 2003.                                                                                                                                                                              
|                                          | (A)10-24    | Supplemental Retirement Benefit Program Amendment No. 3, effective as of January 1, 2003.                                                                                                                                                                                
|                                          | 31          | Certifications under Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      
|                                          | 32          | Certifications under Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                      

_________________________________

(A) Management contract or compensatory plan or arrangement.