FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

(Mark One)

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

For the quarterly period ended.....................June 30, 1999
                                      OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from............to....................
Commission file number....................................1-3268

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

           NEW YORK                                       14-0555980
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                      Identification No.)

284 SOUTH AVENUE, POUGHKEEPSIE  NEW YORK                 12601-4879
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code (914) 452-2000

      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

      Indicate the number of shares  outstanding of each of the issuer's classes
of common stock as of the latest practicable date. Common stock, par value $5.00
per share; 16,862,087 shares outstanding as of June 30, 1999.



<PAGE>



                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION

                 FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1999

                                     INDEX



      PART I - FINANCIAL INFORMATION                                    PAGE

Item 1 -    Consolidated Financial Statements

            Consolidated Statement of Income -
             Three Months Ended June 30, 1999 and 1998                    1

            Consolidated Statement of Income -
             Six Months Ended June 30, 1999 and 1998                      2

            Consolidated Balance Sheet - June 30, 1999
             and December 31, 1998                                        3

            Consolidated Statement of Cash Flows -
             Six Months Ended June 30, 1999 and 1998                      5

            Notes to Consolidated Financial Statements                    6

Item 2 -    Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations                                                  10

      PART II - OTHER INFORMATION

Item 1 -    Legal Proceedings                                            18

Item 5 -    Other Information                                            19

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

Signatures                                                               21


<PAGE>
                       PART I - FINANCIAL INFORMATION

ITEM I - CONSOLIDATED FINANCIAL STATEMENTS

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

                                                         For the 3 Months Ended
                                                                 June 30,
                                                            1999         1998
                                                         ---------    ----------
                                                         (Thousands of Dollars)
Operating Revenues
  Electric............................................    $91,200       $90,319
  Gas.................................................     18,507        16,681
                                                          -------       -------
    Total - own territory.............................    109,707       107,000
  Electric Sales to other utilities...................      7,317         4,717
  Gas Sales to other utilities........................         11           389
                                                          -------       -------
                                                          117,035       112,106
                                                          -------       -------
Operating Expenses
  Operation:
    Fuel used in electric generation..................     18,797        16,642
    Purchased electricity.............................     11,570        11,286
    Purchased natural gas.............................      8,026         6,896
    Other expenses of operation.......................     23,299        23,836
  Maintenance.........................................      8,414         6,792
  Depreciation and amortization.......................     11,700        11,413
  Taxes, other than income tax........................     15,346        15,329
  Federal income tax..................................      5,444         5,508
                                                          -------       -------
                                                          102,596        97,702
                                                          -------       -------
Operating Income......................................     14,439        14,404
                                                          -------       -------
Other Income and Deductions
  Equity Earnings-Subcos..............................         85            93
  Allowance for equity funds used during construction.         50            83
  Federal income tax..................................        (21)          293
  Other - net.........................................      1,839         2,001
                                                          -------       -------
                                                            1,953         2,470
                                                          -------       -------
Income before Interest Charges........................     16,392        16,874
                                                          -------       -------
Interest Charges
  Interest on mortgage bonds..........................      3,206         3,559
  Interest on other long-term debt....................      2,541         2,268
  Other interest......................................      1,036           881
  Allowance for borrowed funds used during
   construction ......................................        (56)         (101)
  Amortization of (premium) and expense on
   debt - net.........................................        228           226
                                                          -------       -------
                                                            6,955         6,833
                                                          -------       -------
Net Income............................................      9,437        10,041


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

Income Available for Common Stock.....................      8,630         9,234
Dividends Declared on Common Stock....................      9,106         9,172
                                                          -------       -------
Balance Retained in the Business......................      ($476)          $62
                                                          =======       =======
Common Stock:
  Average Shares Outstanding (000s)...................     16,862        17,060

  Earnings Per Share on Average Shares Outstanding....      $0.51         $0.54

  Dividends Declared..................................      $0.54         $0.54

                 See Notes to Consolidated Financial Statements.

                                      - 1 -
<PAGE>




                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                        CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)
                                                            For the 6 Months
                                                              Ended June 30,
                                                             1999        1998
                                                            ------      ------
                                                          (Thousands of Dollars)
Operating Revenues
  Electric...............................................  $191,945    $191,631
  Gas....................................................    57,462      52,171
                                                           --------    --------
    Total - own territory................................   249,407     243,802
  Electric Sales to other utilities......................    13,966      11,571
  Gas Sales to other utilities...........................       133         614
                                                           --------    --------
                                                            263,506     255,987
                                                           --------    --------
Operating Expenses
  Operation:
    Fuel used in electric generation.....................    40,786      36,875
    Purchased electricity................................    19,364      22,649
    Purchased natural gas................................    30,011      26,044
    Other expenses of operation..........................    46,637      48,132
  Maintenance............................................    15,050      12,335
  Depreciation and amortization..........................    23,400      22,662
  Taxes, other than income tax...........................    32,060      32,537
  Federal income tax.....................................    16,729      16,346
                                                           --------    --------
                                                            224,037     217,580
                                                           --------    --------
Operating Income.........................................    39,469      38,407
                                                           --------    --------
Other Income and Deductions
  Equity Earnings-Subcos.................................      (837)         48
  Allowance for equity funds used during construction....       112         190
  Federal income tax.....................................       101         573
  Other - net............................................     3,735       3,452
                                                           --------    --------
                                                              3,111       4,263
                                                           --------    --------

Income before Interest Charges...........................    42,580      42,670
                                                           --------    --------

Interest Charges
  Interest on mortgage bonds.............................     6,646       7,118
  Interest on other long-term debt.......................     4,918       4,350
  Other interest.........................................     2,134       1,772
  Allowance for borrowed funds used during construction..      (123)       (231)
  Amortization of (premium) and expense on debt - net....       464         453
                                                           --------    --------
                                                             14,039      13,462
                                                           --------    --------

Net Income...............................................    28,541      29,208

Dividends Declared on Cumulative Preferred Stock.........     1,615       1,615
                                                           --------    --------

Income Available for Common Stock........................    26,926      27,593
Dividends Declared on Common Stock.......................    18,211      18,333
                                                           --------    --------

Balance Retained in the Business.........................  $  8,715    $  9,260
                                                           ========    ========

Common Stock:
  Average Shares Outstanding (000s)......................    16,862      17,146

  Earnings Per Share on Average Shares Outstanding.......     $1.59       $1.61

  Dividends Declared.....................................     $1.08      $1.075

                 See Notes to Consolidated Financial Statements.

                                      - 2 -

<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


                                                         June 30,   December 31,
                                                           1999         1998
                   ASSETS                              (Unaudited)    (Audited)
                                                       -----------  ------------
                                                         (Thousands of Dollars)
 Utility Plant
    Electric..........................................  $1,242,168    $1,222,743
    Gas...............................................     162,946       158,165
    Common............................................      97,754        94,271
    Nuclear fuel......................................      42,319        42,317
                                                        ----------    ----------
                                                         1,545,187     1,517,496

    Less:  Accumulated depreciation...................     618,216       597,383
           Nuclear fuel amortization..................      36,869        35,381
                                                        ----------    ----------
                                                           890,102       884,732

    Construction work in progress.....................      33,261        43,512
                                                        ----------    ----------
        Net Utility Plant.............................     923,363       928,244
                                                        ----------    ----------

 Other Property and Plant.............................      25,568        19,059
                                                        ----------    ----------
 Investments and Other Assets
        Prefunded Pension Costs.......................      43,128        40,218
        Other.........................................      18,458        18,209
                                                        ----------    ----------
            Total Investments and Other Assets........      61,586        58,427
                                                        ----------    ----------


 Current Assets
        Cash and cash equivalents.....................       5,270        10,499
        Accounts receivable from customers-net of
          allowance for doubtful accounts.............      54,134        45,564
        Accrued unbilled utility revenues.............       9,511        15,233
        Other receivables.............................       2,160         4,555
        Fuel, materials and supplies, at average cost.      26,382        23,587
        Special deposits and prepayments..............      14,845        34,823
                                                        ----------    ----------
            Total Current Assets......................     112,302       134,261
                                                        ----------    ----------


 Deferred Charges
        Regulatory assets ............................     142,091       149,261
        Unamortized debt expense......................       5,467         5,062
        Other.........................................      24,327        21,724
                                                         ---------    ----------
            Total Deferred Charges....................     171,885       176,047

                  Total Assets........................  $1,294,704    $1,316,038
                                                        ==========    ==========





                 See Notes to Consolidated Financial Statements.

                                       -3-

<PAGE>

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


                                                        June 30,    December 31,
                                                          1999          1998
     CAPITALIZATION AND LIABILITIES                   (Unaudited)    (Audited)
                                                      -----------   ------------
                                                       (Thousands of Dollars)
Capitalization
 Common Stock Equity:
   Common stock, 30,000,000 shares authorized;
    shares issued ($5 par value):
     1999 - 17,554,987
     1998 - 17,554,987............................... $   87,775     $   87,775
 Paid-in capital.....................................    284,465        284,465
 Retained earnings...................................    142,002        133,287
 Reacquired Capital Stock............................    (27,143)       (27,143)
 Capital stock expense...............................     (6,167)        (6,204)
                                                       ----------    ----------
     Total Common Stock Equity.......................    480,932        472,180
                                                      ----------     ----------
 Cumulative Preferred Stock
   Not subject to mandatory redemption...............     21,030         21,030
   Subject to mandatory redemption...................     35,000         35,000
                                                      ----------     ----------
    Total Cumulative Preferred Stock.................     56,030         56,030
                                                      ----------     ----------
 Long-term Debt......................................    382,547        356,918
                                                      ----------     ----------
     Total Capitalization............................    919,509        885,128
                                                      ----------     ----------
Current Liabilities
  Current maturities of long-term debt...............      3,313         39,507
  Notes payable......................................        750         18,000
  Accounts payable...................................     27,617         23,591
  Accrued taxes and interest.........................      3,663          6,334
  Dividends payable..................................      9,913          9,913
  Accrued vacation...................................      4,344          4,400
  Customer deposits..................................      4,331          4,248
  Other..............................................      5,421          7,932
                                                      ----------     ----------
     Total Current Liabilities.......................     59,352        113,925
                                                      ----------     ----------
Deferred Credits and Other Liabilities
  Regulatory liabilities.............................     79,597         81,065
  Operating reserves.................................      6,787          5,995
  Other..............................................     28,244         27,251
                                                      ----------     ----------
  Total Deferred Credits and Other Liabilities.......    114,628        114,311
                                                      ----------     ----------
Accumulated Deferred Income Tax .....................    201,215        202,674
                                                      ----------     ----------
  Total Capitalization and Liabilities............... $1,294,704     $1,316,038
                                                      ==========     ==========


                 See Notes to Consolidated Financial Statements.

                                       -4-


<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                          For the 6 Months Ended
                                                                  June 30,
                                                              1999        1998
                                                           ---------    --------
Operating Activities:                                     (Thousands of Dollars)


Net Income.................................................. $28,541    $29,208

  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation, amortization & nuclear fuel amortization. 25,503     24,067
      Deferred income taxes, net.............................  3,624       (308)
      Allowance for equity funds used during construction....   (112)      (190)
      Nine Mile 2 Plant deferred finance charges, net........ (2,428)    (2,428)
      Provision for uncollectibles...........................  1,200      1,300
      Accrued pension costs.................................. (5,763)    (5,850)
      Deferred gas costs.....................................  6,019      3,148
      Deferred gas refunds...................................    (82)    (1,410)
      Other, net.............................................   (554)      (549)

   Changes in current assets and liabilities, net:
      Accounts receivable and unbilled revenues.............. (1,653)     8,431
      Fuel, materials and supplies........................... (2,795)     3,001
      Special deposits and prepayments....................... 19,978      1,660
      Accounts payable.......................................  4,026     (8,435)
      Accrued taxes and interest............................. (2,671)     2,026
      Other current liabilities.............................. (2,484)    (1,370)
                                                             -------     -------

   Net Cash Provided by Operating Activities................. 70,349     52,301
                                                             -------     -------
   Investing Activities:
   Additions to plant........................................(20,512)   (24,692)
   Allowance for equity funds used during construction.......    112        190
                                                             -------     -------
      Net additions to plant.................................(20,400)   (24,502)
   Subsidiaries fixed asset additions.........................(5,888)      (179)
   Nine Mile 2 Plant decommissioning trust fund...............  (434)      (434)
   Other, net.................................................  (563)      (270)
                                                              -------    -------
   Net Cash Used in Investing Activities.....................(27,285)   (25,385)
                                                             --------    -------
   Financing Activities:
   Proceeds from issuance of long-term debt.................. 27,029        -
   Net borrowings (repayments) of short-term debt............(17,250)       -
   Retirement and redemption of long-term debt...............(37,607)      (817)
   Dividends paid on cumulative preferred and common stock...(19,826)   (20,017)
   Reacquired capital stock..................................   -       (11,841)
   Debt Issuance costs.......................................   (639)       -
                                                              -------   -------
   Net Cash Used in Financing Activities.....................(48,293)   (32,675)
                                                              -------    -------
   Net Change in Cash and Cash Equivalents................... (5,229)    (5,759)

   Cash and Cash Equivalents - Beginning of Year............. 10,499      9,054
                                                             -------     -------
   Cash and Cash Equivalents - End of Period.................  5,270    $ 3,295
                                                             =======    =======

Supplemental Disclosure of Cash Flow Information

    Interest paid (net of amounts capitalized).............  $11,740    $11,872

    Federal income tax paid................................  $16,800    $14,700



                 See Notes to Consolidated Financial Statements


                                       -5-

<PAGE>




                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                  Notes to Consolidated Financial Statements

NOTE 1 - GENERAL

      The accompanying consolidated financial statements of Central Hudson Gas &
Electric  Corporation  (herein the Company) are unaudited but, in the opinion of
management,  reflect  adjustments  (which include normal recurring  adjustments)
necessary for a fair statement of the results for the interim periods presented.
These condensed unaudited  quarterly  consolidated  financial  statements do not
contain the detail or footnote  disclosures  concerning  accounting policies and
other  matters  which  would  be  included  in  annual  consolidated   financial
statements  and,  accordingly,  should be read in  conjunction  with the audited
Consolidated  Financial Statements (including the notes thereto) included in the
Company's  Annual  Report,  on Form 10-K,  for the year ended  December 31, 1998
(Company's 10-K Report).

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

NOTE 2 - REGULATORY MATTERS

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

      At June 30, 1999, net regulatory  assets associated with the fossil-fueled
generating  assets totaled  $593,000.  The Company did not charge against income
any of these net regulatory assets because recovery of such assets is considered
probable under the Amended Settlement Agreement.

Holding Company Restructuring

      As reported  in the  Company's  10-K  Report,  the  Company  has  received
approval from its shareholders  and regulators to form a holding company.  It is
expected that the holding company  restructuring will occur by October 1999. The
timing will be coordinated with the transfer of up to $100 million in equity (as
authorized  by  the  Public  Service  Commission  of  the  State  of  New  York,
hereinafter  the "PSC") from the Company to unregulated  operations.  As of June
30, 1999, $25.5 million has been transferred.



                                    - 6 -

<PAGE>



NOTE 3 - SEGMENTS AND RELATED INFORMATION

      SFAS No. 131,  "Disclosures  about  Segments of an Enterprise  and Related
Information,"  was adopted by the Company during the fourth quarter of 1998 (see
Note 10 to the Consolidated  Financial Statements included in the Company's 10-K
Report).

      The  Company's  reportable  operating  segments  are its  electric and gas
operations.  The Company's "Other Segment" consists  primarily of Central Hudson
Enterprises Corporation and CH Resources,  Inc., both of which are non-regulated
energy businesses and which are currently  accounted for under the equity method
of accounting for subsidiaries. The results of operations influence earnings per
share but not revenues as reflected in the following  table. All of the segments
currently operate in the northeast region of the United States.

      Certain  additional  information  regarding these segments is set forth in
the following table.



                                    - 7 -

<PAGE>



Central Hudson Gas & Electric Segment Disclosure - FAS 131


<TABLE>

<CAPTION>
                                             Quarter Ended                                Six Months Ended
                                              June 30, 1999                                 June 30,1999
                                         (Thousands of Dollars)                        (Thousands of Dollars)



                                Elect.     Gas       Other       Total        Elect.      Gas       Other       Total

<S>                             <C>       <C>         <C>        <C>           <C>        <C>         <C>        <C>

Revenues from external        $98,500    $18,300     $ -      $116,800     $205,873     $57,145     $ -      $263,018
 customers
Intersegment revenues              17        218       -           235           38         450       -           488
     Total revenues            98,517     18,518       -       117,035      205,911      57,595       -       263,506
Earnings per share                .40        .10      .01          .51         1.21         .43    (.05)         1.59




                                              Quarter Ended                               Six Months Ended
                                              June 30, 1998                                 June 30, 1998
                                         (Thousands of Dollars)                        (Thousands of Dollars)


                                Elect.     Gas       Other       Total        Elect.      Gas       Other       Total
<S>                             <C>       <C>          <C>       <C>           <C>        <C>         <C>        <C>
Revenues from external        $95,026    $16,839     $ -      $111,865     $203,161     $52,215     $ -      $255,376
 customers
Intersegment revenues              10        231       -           241           41         570       -           611
     Total revenues            95,036     17,070       -       112,106      203,202      52,785       -       255,987


Earnings per share                .40        .13      .01          .54         1.16         .45       -          1.61




                                      - 8 -
</TABLE>

<PAGE>



NOTE 4 - NEW ACCOUNTING STANDARDS - DERIVATIVE AND HEDGING
         ACCOUNTING

      Reference is made to the subcaption  "Derivatives and Hedging  Accounting"
under the caption "New Accounting Standards and Other FASB Projects" of Note 1 -
Summary  of  Significant  Accounting  Policies,  to the  Consolidated  Financial
Statements of the Company's  10-K Report.  The  Financial  Accounting  Standards
Board issued FASB  Statement No. 137 in June 1999  amending  FASB  Statement No.
133, Accounting for Derivative Instruments and Hedging Activities,  to defer the
effective date by one year to all fiscal  quarters of all fiscal years beginning
after June 15,  2000.  This  proposed  change is made in response to requests to
consider  delaying the effective date to provide more time to study,  understand
and implement the provisions of the Statement.  Entities had also requested more
time to complete information system modifications, particularly those related to
the year  2000  issue.  The  Company  anticipates  that it will  implement  this
Statement sometime before the required implementation date of January 1, 2001.

      The Company had no outstanding energy trading derivative instruments as of
the end of the quarter.  Efforts are ongoing with regard to full  implementation
of an energy trading risk management program. During the first six months of the
year,  the Company  purchased  some  natural gas  futures  contracts  to hedge a
portion of the price risk  associated  with its gas supply  portfolio;  however,
these  financial  instruments did not expose the Company to a high level of risk
or have a material  impact on the  Company's  financial  position  or results of
operation.

      The Company's  exposure to commodity  price risks related to its purchases
of natural  gas,  fuel for  electric  generation  and other power  supplies  are
mitigated by its  electric and gas cost  adjustment  clauses.  These  adjustment
mechanisms  provide for the return or collection of costs to/from  customers for
costs below or in excess of base costs included in rates. In addition,  the PSC,
in a  Memorandum  and  Resolution  effective  April  13,  1999,  authorized  the
inclusion  of  risk  management  costs  as a  recoverable  component  of the Gas
Adjustment  Clause.  The Memorandum and Resolution defines risk management costs
as "costs  associated  with  transactions  that are  intended  to  reduce  price
volatility or reduce overall costs to customers. These costs include transaction
costs,  and gains and losses  associated with  transactions  made in commodities
exchanges and with other risk management entities."

NOTE 5 - COMMITMENTS AND CONTINGENCIES

      The Company faces a number of contingencies  which arise during the normal
course of business  and which have been  discussed in Note 9 -  Commitments  and
Contingencies to the

                                    - 9 -

<PAGE>



Consolidated  Financial Statements included in the Company's 10-K Report. Except
for what is disclosed in Part II of this  Quarterly  Report on Form 10-Q for the
quarterly  period ended June 30, 1999, and all documents  previously  filed with
the  Securities  and Exchange  Commission  in 1999,  there have been no material
changes in the subject matters discussed in said Note 9.

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

CAPITAL RESOURCES AND LIQUIDITY

      The  growth  of  retained  earnings  in  the  first  six  months  of  1999
contributed  to the  increase  in the book value of common  stock from $28.00 at
December  31,  1998 to $28.52 at June 30,  1999 and the  increase  in the common
equity ratio from 51.0% at December 31, 1998 to 52.4% at June 30, 1999.

      For the six months ended June 30, 1999, cash  expenditures  related to the
construction  program  of the  Company  amounted  to  $20.4  million.  The  cash
requirements for such expenditures were funded from internal sources.

      The Company  has $52 million of  committed  short-term  credit  facilities
available.  In order to  diversify  its  sources of  short-term  financing,  the
Company  has  also  entered  into  short-term  credit  facilities  with  several
commercial  banks. At June 30, 1999, the Company had $750,000 of short-term debt
outstanding   and  had  cash  and  cash   equivalents   totaling  $5.3  million.
Authorization  from the PSC limits the short-term  borrowing  amount the Company
may have outstanding, at any time, to $52 million in the aggregate.

      The  Company,  on March 1, 1999,  redeemed  its 8.375%  $16.7  million tax
exempt  pollution  control  bonds issued by the New York State  Energy  Research
Development  Authority (NYSERDA) due December 1, 2028. The bonds were refinanced
with lower cost  NYSERDA tax exempt  pollution  control  bonds  supported by the
Company's  Promissory  Note of $16.7  million at a fixed rate of 4.20% for their
initial  term of five  years and  thereafter,  are  subject to  repricing.  (See
caption "First Mortgage Bonds" included in Note 7 to the Consolidated  Financial
Statements of the Company's 10-K Report.)

      The Company,  on August 3, 1999,  refinanced  its fixed rate 7-3/8% series
1984 tax  exempt  pollution  control  bonds  issued by  NYSERDA,  $33.4  million
principal  amount, by the issuance through NYSERDA of a new series of tax exempt
pollution  control bonds at a fixed rate of 5.45% (discounted to 99.75% to yield
5.468%).  The maturity of these  bonds,  which are  supported  by the  Company's
promissory note of $33.4 million, was extended from October 1, 2014 to August 1,
2027 but they may be redeemed any time after

                                    - 10 -

<PAGE>



August 1, 2009, at the Company's  option.  The 7-3/8% series will be redeemed on
October 1, 1999.

      The Company,  on August 3, 1999,  refinanced its 1985 tax exempt pollution
control bonds ($72.25 million  principal amount) and its 1987 tax exempt NYSERDA
pollution  control  bonds  ($43.60  million  principal  amount) by the issuance,
through NYSERDA,  of several series of tax exempt pollution control bonds, in an
aggregate  principal  amount  of  $115.85  million,  in  multi-modal  form,  and
supported by the Company's  promissory  note of $115.85  million.  The new bonds
will be set in a form of variable  rate known as "Dutch  Auction"  mode. A Dutch
Auction is an  offering  of a certain  amount of  short-term,  tax  exempt  debt
(generally 35 days) to investors on an auction-bid basis. Prospective investors'
bids are reviewed by an auction agent who determines the rate that will place or
clear  all of the  offered  debt.  The  maturity  of these  new  bonds  reflects
effectively  an extension of the maturity of the 1985  pollution  control  bonds
from November 1, 2020 to August 1, 2028, and an extension of the maturity of the
1987  pollution  control  bonds from June 1, 2027 to August 1, 2028 (except that
the  maturity  of those 1987  pollution  control  bonds  subject to the  federal
alternative  minimum tax effectively  will be extended from June 1, 2027 to July
1,  2034).  The 1985  refinanced  pollution  control  bonds will be  redeemed on
November  1,  1999 and the  1987  refinanced  pollution  control  bonds  will be
redeemed on September 1, 1999.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      See Note 4 of the Notes to Financial  Statements regarding commodity price
risk.

      The  Company  manages  its  interest  rate risk  through  the  issuance of
fixed-rate debt with varying maturities and through economic  refundings of debt
through optional  refunding.  A portion of the Company's long-term debt consists
of variable rate debt for which interest is reset on a periodic basis reflecting
current market  conditions.  The difference between costs associated with actual
interest rates and costs  embedded in current  tariffs are deferred for eventual
passback or recovery to or from customers.

EARNINGS PER SHARE

      Earnings  per share of common  stock were $.51 for the  second  quarter of
1999,  as  compared  to $.54 for the second  quarter of 1998,  a decrease of 6%.
Earnings  per share of common  stock were  $1.59 for the first six months  ended
June 30,  1999,  as compared to $1.61 for the six months  ended June 30, 1998, a
decrease of 1%.



                                    - 11 -

<PAGE>



      Earnings per share for the quarter ended June 30, 1999  decreased $.03 per
share as  compared  to the same  quarter  last year.  The  decrease  in earnings
results  from a net  increase in  operating  expenses  and a reduction  in other
income.  Operating  expenses  increased due  primarily to increased  maintenance
costs  related to a  scheduled  major  outage at one of the  Company's  electric
generating  plants in preparation for anticipated high electric usage during the
summer and to the costs of the  Company's  tree  trimming  operations  which are
designed to improve overall electric reliability.  The reduction in other income
is due  largely to a decrease  in federal  income  tax  credits.  Earnings  from
subsidiary  operations  (also included in other income) were unchanged from last
year even with start-up costs incurred for generating plant acquisitions.  These
increases  were  moderated by a reduction in other  expenses,  notably  workers'
compensation  insurance and employee benefits and in addition, a 6% reduction in
labor expenses  reflecting the Company's  continuing efforts to improve employee
productivity. Moreover, operating revenues increased 4% due largely to incentive
amounts  earned by the Company from sales for resale,  increased  revenues  from
electric  and gas sales to  residential  customers  and  amounts  related to the
Company's fuel and gas cost adjustment.

      The  reduction  in  earnings  for the six months  ended  June 30,  1999 as
compared  to the same  period in 1998  results  primarily  from an  increase  in
expenses,  other than fuel and  purchased  electricity  costs;  an  increase  in
amortization  and  depreciation  on the  Company's  plant  and  equipment  and a
reduction in other income. As with the comparative results for the quarter ended
June 30, 1999,  the  increase in expenses is  reflective  of costs  incurred for
electric generating plant maintenance and tree trimming operations. The decrease
in other income  results  largely  from costs  incurred  for the  expansion  and
startup  operations of one of the Company's  unregulated  affiliates  and from a
reduction  in federal  income tax credits.  These  reductions  to earnings  were
partially offset by an increase in electric and gas net operating revenues (less
fuel and purchased electricity costs) due to an increase in sales,  particularly
to residential and commercial  customers.  Earnings were also favorably impacted
by the Company's common stock repurchase program.

RESULTS OF OPERATIONS

      The following table reports the variation in the results of operations for
the three  months and the six months  ended June 30,  1999  compared to the same
periods in 1998:


                                    - 12 -

<PAGE>



                                             3 MONTHS ENDED JUNE 30,
                                                                 INCREASE
                                            1999        1998    (DECREASE)
                                               (Thousands of Dollars)
Operating Revenues...............         $117,035    $112,106    $  4,929
Operating Expenses...............          102,596      97,702       4,894
                                           -------     -------     -------
Operating Income.................           14,439      14,404          35
Other Income.....................            1,953       2,470        (517)
                                           -------     -------     -------
Income before Interest
 Charges.........................           16,392      16,874        (482)
Interest Charges.................            6,955       6,833         122
                                           -------     -------     -------

Net Income.......................            9,437      10,041        (604)
Dividends Declared on Cumulative
 Preferred Stock.................              807         807           0
                                           -------     -------     -------
Income Available for Common
 Stock...........................         $  8,630    $  9,234    $   (604)
                                           =======     =======     =======



                                             6 MONTHS ENDED JUNE 30,
                                                                 INCREASE
                                            1999        1998    (DECREASE)
                                               (Thousands of Dollars)
Operating Revenues...............         $263,506    $255,987    $  7,519
Operating Expenses...............          224,037     217,580       6,457
                                           -------     -------     -------
Operating Income.................           39,469      38,407       1,062
Other Income.....................            3,111       4,263      (1,152)
                                           -------     -------     -------
Income before Interest
 Charges.........................           42,580      42,670         (90)
Interest Charges.................           14,039      13,462         577
                                           -------     -------     -------

Net Income.......................           28,541      29,208        (667)
Dividends Declared on Cumulative
 Preferred Stock.................            1,615       1,615           0
                                           -------     -------     -------
Income Available for Common
 Stock...........................         $ 26,926    $ 27,593    $   (667)
                                           =======     =======     =======


OPERATING REVENUES

      Operating  revenues  increased $4.9 million (4%) for the second quarter of
1999 as compared to the second  quarter of 1998 and increased  $7.5 million (3%)
for the six months  ended June 30,  1999.  Details of these  revenue  changes by
electric and gas segments are as follows:


                                    - 13 -

<PAGE>



                               INCREASE (DECREASE) FROM PRIOR PERIOD
                                SECOND QUARTER        SIX MONTHS
                              Electric     Gas    Electric        Gas
                                        (Thousands of Dollars)
Customer Sales*........       $   74      $1,037**    $1,134    $3,189**
Sales to Other
 Utilities..............       2,600        (378)      2,394      (481)
Fuel and Gas Cost
 Adjustment.............         912         928         665     2,898
Deferred Revenues.......         506***     (258)       (918)***  (783)
Miscellaneous...........        (611)        119        (566)      (13)
                               -----       -----       -----     -----
                              $3,481      $1,448      $2,709    $4,810
                               =====       =====       =====     =====

  *Includes Energy Delivery Service revenues.
 **Both firm and interruptible revenues.
***Includes the deferral and  restoration  of revenues  related to the Company's
   Retail Access Program under its Amended and Restated Settlement  Agreement as
   described under the caption "Competitive  Opportunities Proceeding Settlement
   Agreement" of Note 2 to the Notes to Consolidated Financial Statements in
   Item 8 of the Company's 10-K Report.

SALES

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

      Total  kilowatt-hour  sales of  electricity  within the Company's  service
territory increased 2%, and sales of natural gas to firm customers increased 8%,
for the second  quarter of 1999 as compared to the second  quarter of 1998.  For
the six months ended June 30, 1999, electric sales increased 4% and gas sales to
firm customers  increased 10% compared to the same period last year.  Changes in
sales by major customer  classifications,  including  energy supplied by others,
are set forth below.

                                 INCREASE (DECREASE) FROM PRIOR PERIOD
                                  SECOND QUARTER          SIX MONTHS
                                 Electric     Gas      Electric   Gas
Residential..............           4%         9%          4%      7%
Commercial...............           3          7           4      10
Industrial...............           -          4           1       5
Interruptible............          N/A        31          N/A     21

      As indicated, interruptible gas sales increased in both periods, resulting
primarily from an increase in boiler gas usage for electric generation.



                                    - 14 -

<PAGE>



      Billing  heating degree days were 9% higher for the quarter ended June 30,
1999 and 7% higher for the six months  ended June 30, 1999 when  compared to the
same periods in 1998 which  increased  usage in both  periods  related to colder
weather.

OPERATING EXPENSES

      The following  table  reports the variation in the operating  expenses for
the three months and six months ended June 30, 1999 compared to the same periods
in the prior year:

                                 INCREASE (DECREASE) FROM PRIOR PERIOD
                                  SECOND QUARTER           SIX   MONTHS
                                 Amount   Percent         Amount  Percent
                                        (Thousands of Dollars)
Operating Expenses
 Fuel and Purchased
  Electricity............  $2,439            9%       $   626        1%
Purchased Natural
 Gas.....................   1,130           16          3,967       15
Other Expenses of
 Operation...............    (537)          (2)        (1,495)      (3)
Maintenance..............   1,622           24          2,715       22
Depreciation and
 Amortization............     287            3            738        3
Taxes, Other than Income
 Tax.....................      17            -           (477)      (2)
Federal Income tax.......     (64)          (1)           383        2
                            -----           --          ------      --
            Total.......... 4,894            5        $ 6,457        3
                            =====                      ======

      Fuel and purchased  electricity  costs increased $2.4 million (9%) for the
second quarter of 1999 largely attributable to an increase in sales for resale.

      Purchased  natural gas costs  increased  $1.1 million (16%) for the second
quarter of 1999  resulting  primarily  from an increase  in  deferred  gas costs
related to the gas cost adjustment.  Purchased  natural gas costs increased $4.0
million  (15%) for the six months ended June 30, 1999 due both to an increase in
sales, primarily to residential and commercial customers, and an increase in the
restoration of deferred gas costs related to the Company's gas cost adjustment.

      Other expenses of operation decreased $1.5 million (3%) for the six months
ended June 30, 1999,  primarily due to a reduction in labor  expense  reflecting
the  Company's  continuing  efforts to  improve  employee  productivity  and the
receipt of dividends  related to workers'  compensation  insurance  and employee
benefits.

      Maintenance  expenses  increased $1.6 million (24%) for the second quarter
of 1999 and $2.7 million (22%) for the six months ended June 30, 1999  primarily
due to increased costs related to

                                    - 15 -

<PAGE>



tree  trimming  operations  and  scheduled  maintenance  performed on one of the
Company's electric generating plants for a major outage.

COMMON STOCK DIVIDENDS

      Reference is made to the caption "Common Stock Dividends and Price Ranges"
of Part  II,  Item 7 of the  Company's  10-K  Report,  for a  discussion  of the
Company's  dividend  payments.  On June 25, 1999,  the Board of Directors of the
Company declared a quarterly dividend of $.54 per share,  payable August 2, 1999
to  shareholders  of record as of July 9,  1999  maintaining  the $.54 per share
level established one year ago.

OTHER MATTERS

FORWARD-LOOKING STATEMENTS

      This  quarterly  report on Form  10-Q and the  documents  incorporated  by
reference  contain  statements  which, to the extent they are not recitations of
historical fact,  constitute "forward- looking statements" within the meaning of
the Securities  Litigation  Reform Act of 1995 (Reform Act). The statements will
contain  words such as  "believes,"  "expects,"  "intends,"  "plans,"  and other
similar words. All such forward-looking statements are intended to be subject to
the safe harbor protection  provided by the Reform Act. These statements are not
guarantees of future  performance and involve certain risks,  uncertainties  and
assumptions  which are  difficult  to  predict.  A number of  important  factors
affecting  the  Company's  business  and  financial  results  could cause actual
results  to  differ   materially  from  those  stated  in  the   forward-looking
statements.   Those  factors   include   weather,   energy  supply  and  demand,
developments  in  the  legislative,   regulatory  and  competitive  environment,
electric  and  gas  industry   restructuring   and  cost  recovery  and  certain
environmental  matters  as  well as  such  other  factors  as set  forth  in the
Company's 10-K Report and all documents  subsequently  filed with the Securities
and Exchange Commission. The Company undertakes no obligation to update publicly
any forward-looking statements,  whether as a result of new information,  future
events or otherwise.

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

LABOR RELATIONS

      Reference is made to the subcaption  "Labor  Relations"  under the caption
"Other Matters" of Item 1 - Business,  of the Company's 10-K Report. The Company
has agreements with the International Brotherhood of Electrical Workers ("IBEW")
Locals 2218 and 320 for its unionized employees, representing production

                                    - 16 -

<PAGE>



and  maintenance  employees,  customer  representatives,   service  workers  and
clerical employees (excluding persons in managerial, professional or supervisory
positions), which agreements were renegotiated effective July 1, 1998.

      Local 2218 and Local 320 merged on August 1, 1999,  and will  continue  as
Local 320. There will be no impact to the Company as a result of the merger. The
contracts  remain in effect for Non- Production  Plant Workers through April 30,
2003 and Production
Plant Workers through August 31, 2003.

CH RESOURCES, INC.

      Reference is made to the subcaption "CH Resources, Inc." under the caption
"Other Matters" of Item 1 - Business, of the Company's 10-K Report.

      In June 1999, CH Resources  acquired a 50 megawatt coal- burning fluidized
bed electric cogeneration plant in Niagara Falls, New York.

THE YEAR 2000 ISSUE

      Reference  is made to the  caption  "The Year 2000 Issue" of Item 7 of the
Company's  10-K Report for a discussion  related to the Year 2000 issue with the
following updates noted:

      Regarding  the  Year  2000  problem  project,  on  June 1,  1999,  Company
officials  reported  to NERC and  announced  that they  believe  that all of the
utility's  computerized  components  considered to be "mission  critical" to the
safe and reliable flow of energy and to the protection of the  environment  have
been  remediated and are Year 2000 ready,  but the Company plans to continue its
vigilance  to be sure that it is prepared for the  unexpected  on New Year's Eve
1999 and beyond.

      As part of the Y2K readiness  plan, the Company  employees will be on duty
at key  customer  service  locations  on New Year's Eve 1999 and, if  necessary,
thereafter.  The Company will also continue testing of its computerized  systems
to  ensure  that  all   remediations   perform  properly  within  a  coordinated
environment, as well as taking part in industry readiness drills. The Company is
also  developing  a  comprehensive  Contingency  Plan.  Response to  Y2K-related
emergencies will be also coordinated with local emergency services agencies,  as
is done during storms and other emergencies.

      The  Company  also  has  established  a  hot-line  for  more  information,
available  toll-free to  customers,  and has  additional  data  available on its
website.



                                    - 17 -

<PAGE>



      Regarding  total  project  costs,  of a total  estimate  of $3.0  million,
approximately  $2.2 million has been expended through June 1999,  including $1.1
million of internal  labor  charges.  The Company does not expect final costs to
exceed this estimate; however, no assurances can be given.

DIRECTORS OF THE COMPANY

      Reference is made to the caption  "Directors and Executive Officers of the
Company," Part III, Item 10, of the Company's 10-K Report.

      Effective  May 28, 1999,  Stanley J. Grubel was  appointed to the Board of
Directors of the Company.  He will also serve on the  Committee on  Compensation
and  Succession.  He is the Chief  Executive  Officer  of  MiCRUS,  an  advanced
semiconductor  manufacturing  company located in East Fishkill,  New York, since
January 1, 1995.

      MiCRUS,  which was formed as a joint venture between IBM and Cirrus Logic,
Inc., began operations on January 1, 1995,  currently employs 1,000 workers, and
is a major customer of the Company.

      Prior to his present  position  with  MiCRUS,  he was with IBM since 1965,
including  his 1990  appointment  as IBM  East  Fishkill's  Semiconductor  Plant
Manager.

      He is  currently  a member  of the  Boards  of  Directors  of the New York
Business Council, Mid-Hudson Pattern for Progress, Asyst Technologies,  and also
serves as Chairman of the Marist College
School of Management's Advisory Council.

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

      Asbestos  Litigation.  For a  discussion  of lawsuits  against the Company
involving  asbestos,  see Note 9 -  Commitments  and  Contingencies,  under  the
caption  "Asbestos  Litigation,"  in Part  II,  Item 8 of the  Company's  Annual
Report,  on Form 10-K, for the fiscal year ended December 31, 1998 ("10-K Annual
Report").

      Since  1987,  the Company  has been  involved as a defendant  in the "mass
tort" asbestos  litigation in the United States District Courts for the Southern
and Eastern  Districts of New York and the New York State Supreme Court,  County
of New York.  This  litigation  involves  thousands of plaintiffs who seek large
amounts of compensatory and punitive damages from numerous  defendants for death
and injuries allegedly caused by exposure to asbestos.  As of June 30, 1999, the
Company has been a defendant in  approximately  1,665 such individual  lawsuits.
Many of these

                                    - 18 -

<PAGE>



lawsuits  have been  disposed  of without  any  payment by the  Company,  or for
immaterial  amounts.  While the amounts  demanded in all the remaining  lawsuits
total several  billions of dollars,  it is the Company's  opinion,  based on its
experience in such  litigation  and on  information  and relevant  circumstances
known to it at this time,  that these lawsuits will not have a material  adverse
effect  on the  Company's  financial  position.  However,  if the  Company  were
ultimately  held liable under these  lawsuits and  insurance  coverage  were not
available,  the cost thereof could have a material  adverse effect (a reasonable
estimate of which cannot be made at this time) on the financial condition of the
Company if the Company could not recover all or a substantial portion thereof in
rates. The Company's insurance does not extend to punitive damages.

      The Company is insured under successive  comprehensive  general  liability
policies issued by a number of insurers,  has put such insurers on notice of the
asbestos  lawsuits and has demanded  indemnification  and  reimbursement for its
defense costs.  In December 1994, the Company  commenced a lawsuit against eight
such insurers in the New York State Supreme  Court,  Dutchess  County.  By order
dated October 2, 1998,  the Court granted a motion by Central Hudson against one
insurer,  Travelers  Casualty and Surety  Company  (f/k/a The Aetna Casualty and
Surety Company)  (Travelers),  seeking a declaration that Travelers owed Central
Hudson the cost of defense in the underlying asbestos litigation.  Travelers has
since paid Central Hudson $3,181,029.94, consisting of the undisputed portion of
Central  Hudson's  past  defense  costs  together  with  prejudgment   interest.
Travelers  has made this  payment  subject  to the  October 2, 1998 order of the
Court and without prejudice to its rights to appeal or to seek contribution from
the other insurers and from Central Hudson.

Item 5.     Other Information

      (a) Nine  Mile 2  Plant.  Reference  is made to Item 7 of the 10-K  Annual
Report  and  to  the  subcaption   "Nuclear   Operations"   thereunder  for  the
announcement of Niagara Mohawk Power Corporation ("Niagara Mohawk") and New York
State Electric and Gas  Corporation  ("NYSEG") that they plan to pursue the sale
of their  nuclear  assets,  including  the Nine  Mile 2  Plant,  which  Plant is
described in Note 3 of the Notes to Financial  Statements  referred to in Item 8
of the 10-K Annual Report, in which Plant the Company has a co-tenancy interest.

      Both  Niagara  Mohawk and NYSEG,  on or about June 28,  1999,  advised the
Company that each has entered into an agreement to sell its interest in the Nine
Mile 2 Plant to AmerGen Energy Company, L.L.C. ("Amergen").

      The  Company  can make no  prediction  as to  whether  such  sales will be
completed and, if completed, what effect same will have

                                    - 19 -

<PAGE>



on the  Company's  interest  and rights  related  to the Nine Mile 2 Plant.  The
Company,  at its election,  has superior  contractual rights to acquire the Nine
Mile 2 Plant interests of Niagara Mohawk and/or NYSEG proposed to be sold on the
same terms and  conditions as set forth in the Amergen  Agreements.  The Company
has not made any determination  with respect to whether or not it will make such
elections.

      (b) Hazardous Waste. Reference is made to Item 1 of the 10-K Annual Report
and the  subcaption  thereunder  "Environmental  Quality - Toxic  Substances and
Hazardous  Wastes" for a discussion of sites at which gas  manufacturing  plants
owned or operated by the Company or its predecessors were once located.

      In February 1999, Registrant was notified by the New York State Department
of Environmental  Conservation ("NYSDEC") that it had received information as to
three (3) of such sites which led the NYSDEC to suspect that hazardous waste has
been disposed of at such sites  (located in Beacon and  Poughkeepsie,  New York)
and that the NYSDEC would perform a Preliminary Site Assessment  ("PSA") at each
such site. Such studies would be  supplemental  to earlier studies  performed at
such sites, as described under such subcaption.

      The Company  expects that it will  perform the PSA's itself under  consent
orders,  currently  being  discussed  with the  NYSDEC.  The Company can make no
prediction as to the outcome of this matter.

Item 6.     Exhibits and Reports of Form 8-K

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

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

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

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

(10)  Material contracts

      (i)   89--  Agreement, dated as of April 1, 1999, between
                  Registrant and Arch Coal Sales Company, Inc. for
                  the Sale and Purchase of Coal.  Certain portions

                                    - 20 -

<PAGE>



                  of  said  Agreement  setting  forth  or  relating  to  pricing
                  provisions   are  omitted  and  filed   separately   with  the
                  Securities and Exchange  Commission  pursuant to a request for
                  confidential treatment under the rules of said Commission.

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

            None.

                                  SIGNATURES

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

                        CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                        (Registrant)



                        By:        /s/ Donna S. Doyle
                                       Donna S. Doyle
                                         Controller
                                 Authorized Officer and Chief
                                       Accounting Officer

Dated:  August 5, 1999


                                    - 21 -