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.....................March 31, 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 oranization)                      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 March 31, 1999.


<PAGE>



                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999

                                     INDEX

      PART I - FINANCIAL INFORMATION                                    PAGE

Item 1 -    Consolidated Financial Statements

            Consolidated Statement of Income -
             Three Months Ended March 31, 1999 and 1998                   1

            Consolidated Balance Sheet - March 31, 1999
             and December 31, 1998                                        2

            Consolidated Statement of Cash Flows -
             Three Months Ended March 31, 1999 and 1998                   4

            Notes to Consolidated Financial Statements                    5

Item 2 -    Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations                                                   8

      PART II - OTHER INFORMATION

Item 1 -    Legal Proceedings                                            14

Item 4 -    Submission of Matters to a Vote of
             Security Holders                                            16

Item 6 -    Exhibits and Reports on Form 8-K                             18

Signatures


<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM I - CONSOLIDATED FINANCIAL STATEMENTS

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                        CONSOLIDATED STATEMENT OF INCOME

                                                          For the 3 Months Ended
                                                                 March 31,
                                                             1999         1998
                                                             ----         ----
                                                          (Thousands of Dollars)
Operating Revenues
  Electric................................................ $100,743    $101,312
  Gas.....................................................   38,955      35,490
                                                           --------    --------
    Total - own territory.................................  139,698     136,802
  Electric Sales to other utilities.......................    6,651       6,854
  Gas Sales to other utilities............................      122         226
                                                           --------    --------
                                                            146,471     143,882
                                                           --------    --------
Operating Expenses
  Operation:
    Fuel used in electric generation......................   21,988      20,233
    Purchased electricity.................................    7,794      11,364
    Purchased natural gas.................................   21,985      19,147
    Other expenses of operation...........................   23,338      24,297
  Maintenance.............................................    6,636       5,543
  Depreciation and amortization...........................   11,701      11,248
  Taxes, other than income tax............................   16,714      17,208
  Federal income tax......................................   11,285      10,839
                                                           --------    --------
                                                            121,441     119,879
                                                           --------    --------
Operating Income..........................................   25,030      24,003
                                                           --------    --------
Other Income and Deductions
  Equity Earnings-Subcos..................................     (922)        (45)
  Allowance for equity funds used during construction.....       62         106
  Federal income tax......................................      122         280
  Other - net.............................................    1,895       1,450
                                                           --------    --------
                                                              1,157       1,791
                                                           --------    --------

Income before Interest Charges............................   26,187      25,794
                                                           --------    --------
Interest Charges
  Interest on mortgage bonds..............................    3,440       3,559
  Interest on other long-term debt........................    2,377       2,082
  Interest on short-term debt.............................      103
  Other interest..........................................      994         889
  Allowance for borrowed funds used during construction...      (67)       (129)
  Amortization of (premium) and expense on debt - net.....      236         226
                                                           --------    --------
                                                              7,083       6,627
                                                           --------    --------
Net Income................................................   19,104      19,167

Dividends Declared on Cumulative Preferred Stock..........      807         807
                                                           --------    --------
Income Available for Common Stock.........................   18,297      18,360
Dividends Declared on Common Stock........................    9,106       9,161
                                                           --------    --------
Balance Retained in the Business.......................... $  9,191    $  9,199
                                                           ========    ========
Common Stock:
  Average Shares Outstanding (000s).......................   16,862      17,232

  Earnings Per Share on Average Shares Outstanding........    $1.09       $1.06

  Dividends Declared......................................   $0.540      $0.535

                 See Notes to Consolidated Financial Statements.


                                      - 1 -

<PAGE>

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET

                                                   March 31,       December 31,
                                                     1999             1998
                                                  (Unaudited)       (Audited)
                                                  -----------      ------------
                    ASSETS                           (Thousands of Dollars)
  Electric...................................     $1,224,776       $1,222,743
  Gas........................................        158,894          158,165
  Common.....................................         95,188           94,271
  Nuclear fuel...............................         42,320           42,317
                                                  ----------       ----------
                                                   1,521,178        1,517,496

  Less:  Accumulated depreciation............        608,644          597,383
         Nuclear fuel amortization...........         36,205           35,381
                                                  ----------       ----------
                                                     876,329          884,732

  Construction work in progress..............         47,107           43,512
                                                  ----------       ----------
     Net Utility Plant.......................        923,436          928,244
                                                  ----------       ----------
Other Property and Plant.....................         19,362           19,059
                                                  ----------       ----------
Investments and Other Assets
     Prefunded Pension Costs.................         41,673           40,218
     Other...................................         18,859           18,209
                                                  ----------       ----------
     Total Investments and Other Assets......         60,532           58,427
                                                  ----------       ----------


Current Assets
  Cash and cash equivalents..................         13,202           10,499
  Accounts receivable from customers-net of
   allowance for doubtful accounts...........         54,368           45,564
  Accrued unbilled utility revenues..........         14,918           15,233
  Other receivables..........................          2,897            4,555
  Fuel, materials and supplies, at average
   cost......................................         23,440           23,587
  Special deposits and prepayments...........         21,854           34,823
                                                  ----------       ----------
     Total Current Assets....................        130,679          134,261
                                                  ----------       ----------


Deferred Charges
  Regulatory assets .........................        139,452          149,261
  Unamortized debt expense...................          5,401            5,062
  Other......................................         24,848           21,724
                                                  ----------       ----------
     Total Deferred Charges..................        169,701          176,047
                                                  ----------       ----------

           TOTAL ASSETS......................     $1,303,710       $1,316,038
                                                  ==========       ==========


                 See Notes to Consolidated Financial Statements.

                                      - 2 -

<PAGE>
<TABLE>
<CAPTION>

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET

                                                                   March 31,              December 31,
                                                                     1999                    1998
                                                                  (Unaudited)              (Audited)
                                                                  -----------             ------------
                    LIABILITIES AND CAPITALIZATION                      (Thousands of Dollars)
<S>                                                              <C>                      <C>
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....................................            142,478                  133,287
   Reacquired Capital Stock.............................            (27,143)                 (27,143)
   Capital stock expense................................             (6,185)                  (6,204)
                                                                 ----------               ----------
       Total Common Stock Equity........................            481,390                  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.......................................            377,132                  356,918
                                                                 ----------               ----------
       Total Capitalization.............................            914,552                  885,128
                                                                 ----------               ----------
Current Liabilities
   Current maturities of long-term debt.................              3,308                   39,507
   Notes payable........................................               -                      18,000
   Accounts payable.....................................             22,324                   23,591
   Accrued taxes and interest...........................             23,724                    6,334
   Dividends payable....................................              9,913                    9,913
   Accrued vacation.....................................              4,344                    4,400
   Customer deposits....................................              4,288                    4,248
   Other................................................              6,357                    7,932
                                                                 ----------               ----------
       Total Current Liabilities........................             74,258                  113,925
                                                                 ----------               ----------

Deferred Credits and Other Liabilities
   Regulatory liabilities...............................             81,528                   81,065
   Operating reserves...................................              6,333                    5,995
   Other................................................             27,670                   27,251
                                                                 ----------               ----------
       Total Deferred Credits and Other Liabilities.....            115,531                  114,311
                                                                 ----------               ----------
Accumulated Deferred Income Tax ........................            199,369                  202,674
                                                                 ----------               ----------
             TOTAL CAPITALIZATION AND LIABILITIES.......         $1,303,710               $1,316,038
                                                                 ==========               ==========

</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      - 3 -
<PAGE>
<TABLE>
<CAPTION>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                                                                For the 3 Months Ended
                                                                                                        March 31,
                                                                                            1999                     1998
                                                                                            ----                     ----
OPERATING ACTIVITIES:                                                                           (Thousands of Dollars)

<S>                                                                                       <C>                      <C>
  Net Income....................................................................          $ 19,104                 $ 19,167

    Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation, amortization & nuclear fuel amortization..................            12,856                   12,148
        Deferred income taxes, net..............................................            (1,111)                  (2,081)
        Allowance for equity funds used during construction.....................               (62)                    (106)
        Nine Mile 2 Plant deferred finance charges, net.........................            (1,214)                  (1,214)
        Provision for uncollectibles............................................               450                      825
        Accrued pension costs...................................................            (3,119)                  (3,181)
        Deferred gas costs......................................................             6,160                    4,620
        Deferred gas refunds....................................................               (48)                  (1,010)
        Other, net..............................................................             2,636                     (465)

    Changes in current assets and liabilities, net:
        Accounts receivable and unbilled revenues...............................            (7,281)                    (448)
        Fuel, materials and supplies............................................               147                    2,094
        Special deposits and prepayments........................................            12,969                   (4,859)
        Accounts payable........................................................            (1,267)                  (6,663)
        Accrued taxes and interest..............................................            17,390                   18,779
        Other current liabilities...............................................            (1,591)                  (1,544)
                                                                                          --------                 --------
    NET CASH PROVIDED BY OPERATING ACTIVITIES...................................            56,019                   36,062
                                                                                          --------                 --------
INVESTING ACTIVITIES:

        Additions to plant......................................................            (8,234)                  (8,751)
        Allowance for equity funds used during construction.....................                62                      106
                                                                                          --------                  -------
             Net additions to plant.............................................            (8,172)                  (8,645)
        Nine Mile 2 Plant decommissioning trust fund............................              (217)                    (217)
        Other, net..............................................................              (563)                    (103)
                                                                                          --------                 --------

        NET CASH USED IN INVESTING ACTIVITIES...................................            (8,952)                  (8,965)
                                                                                          --------                 --------

FINANCING ACTIVITIES:

        Proceeds from issuance of long-term debt................................            22,114                     -
        Net borrowings (repayments) of short-term debt..........................           (18,000)                    -
        Retirement and redemption of long-term debt.............................           (38,106)                    (364)
        Dividends paid on cumulative preferred and common stock.................            (9,913)                 (10,047)
        Issuance and redemption costs...........................................              (459)                    -
        Reacquired capital stock................................................              -                      (5,681)
                                                                                          --------                 --------

        NET CASH USED IN FINANCING ACTIVITIES...................................           (44,364)                 (16,092)
                                                                                          --------                 --------

NET CHANGE IN CASH AND CASH EQUIVALENTS.........................................             2,703                   11,005

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR...................................            10,499                    9,054
                                                                                          --------                 --------
CASH AND CASH EQUIVALENTS - END OF PERIOD.......................................          $ 13,202                 $ 20,059
                                                                                          ========                 ========


Supplemental Disclosure of Cash Flow Information

        Interest paid (net of amounts capitalized)..............................          $  2,116                 $  1,212

        Federal income tax paid.................................................              -                        -

</TABLE>


                 See Notes to Consolidated Financial Statements

                                       - 4 -


<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 March 31, 1999, net regulatory assets (liabilities) associated with the
fossil-fueled  generating  assets  totaled  ($429,000).  The reduction from that
reported at December  31, 1998 was due  primarily  to the receipt of an asbestos
litigation  settlement.  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 March
31, 1999, $25.5 million has been transferred.

                                    - 5 -


<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.  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.  General  corporate  expenses,  property  common  to both
segments and  depreciation  of such common  property have been  allocated to the
segments in accordance with practice established for regulatory purposes.

                                    - 6 -


<PAGE>
<TABLE>
<CAPTION>

Central Hudson Gas & Electric Segment Disclosure - FAS 131 Quarter Ended March 31,

                                                                           1999
                                                   Electric         Gas          Other          Total
                                                   --------         ---          -----          -----

Revenues from external customers                $  107,374     $  38,845      $   -        $  146,219
Intersegment revenues                                   20           232          -               252
   Total revenues                                  107,394        39,077          -           146,471
Depreciation and amortization                       10,537         1,164                       11,701
Interest expense                                     6,149         1,001                        7,150
Interest income                                        422            62                          484
Income tax (credit) expense                          8,143         3,020                       11,163
Earnings per share                                    0.81          0.33        (0.05)           1.09
Segment assets                                   1,065,578       185,935       52,197       1,303,710
Construction Expenditures                            6,943         1,291                        8,234


                                                                           1998
                                                   Electric         Gas          Other          Total
                                                   --------         ---          -----          -----

<S>                                             <C>            <C>            <C>          <C>
Revenues from external customers                $  108,135     $  35,377      $   -        $  143,512
Intersegment revenues                                   31           339          -               370
   Total revenues                                  108,166        35,716          -           143,882
Depreciation and amortization                       10,129         1,119                       11,248
Interest expense                                     5,878           878                        6,756
Interest income                                        247            24                          271
Income tax (credit) expense                          7,613         2,946                       10,559
Earnings per share                                    0.74          0.32          -              1.06
Segment assets                                   1,056,093       173,932       21,358       1,251,383
Construction Expenditures                            8,226           526                        8,752

</TABLE>


                                    - 7 -


<PAGE>



NOTE 4 - NEW ACCOUNTING STANDARDS - DERIVATIVE AND HEDGING
         ACCOUNTING

      Reference is made to 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. During the first
quarter of 1999, the Company  purchased natural gas futures contracts to hedge a
portion  of the price  risk  associated  with its gas  supply  portfolio.  These
financial  instruments did not have a material impact on the Company's financial
position or results of  operation.  In addition,  the PSC, in a  Memorandum  and
Resolution  recently  issued  and  effective  April  13,  1999,  authorized  the
inclusion  of  risk  management  costs  as a  legitimate  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 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 March 31, 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

      For the three months ended March 31, 1999,  cash  expenditures  related to
the construction  program of the Company amounted to $8.2 million.  Construction
expenditures  during the quarter ended March 31, 1999, were primarily for normal
extensions and  improvements of the Company's  electric and natural gas systems.
The cash requirements for such expenditures were funded from internal sources.

                                    - 8 -


<PAGE>



      The  growth  of  retained  earnings  in the  first  three  months  of 1999
contributed  to the  increase  in the book value of common  stock from $28.00 at
December  31,  1998 to $28.55 at March 31,  1999 and the  increase in the common
equity  ratio from 51.0% at December  31, 1998 to 52.4% at March 31,  1999.  The
increase  in the  common  equity  ratio  was also  impacted  by the  absence  of
short-term debt at March 31, 1999.

      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 March  31,  1999,  the  Company  had no  short-term  debt
outstanding.  Authorization from the PSC limits the short-term  borrowing amount
the Company may have outstanding,  at any time, to $52 million in the aggregate.
Investments  in  short-term  securities  were $13.2  million at the end of March
1999.

      The Company, on March 1, 1999, redeemed its 8.375% $16.7 million 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  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.)

EARNINGS PER SHARE

      Earnings  per share of common  stock were  $1.09 for the first  quarter of
1999, as compared to $1.06 for the first quarter of 1998, an increase of 3%.

      The increase in earnings  per share for the quarter  ended March 31, 1999,
as compared to the same period in 1998,  resulted  primarily from an increase in
electric and gas net operating revenues (which includes fuel costs and purchased
electricity).  The increase in electric net  revenues  resulted  largely from an
increase in services  to all  customer  classes,  combined  with a reduction  in
purchased  electricity costs for own territory sales. Gas net operating revenues
increased due to increased  residential and commercial sales. The total increase
in net operating  revenues is also reflective of a 5% increase in billing degree
days.  Also  contributing  to this  increase  was the  favorable  impact  of the
Company's  common stock  repurchase  program and the  non-recurring  effect of a
favorable  settlement  related to  asbestos  litigation.  These  increases  were
partially  offset by  increased  costs  incurred for the  expansion  and startup
operations of one of the Company's unregulated  affiliates;  the net increase in
operation and maintenance costs primarily resulting from increased costs related
to tree trimming operations; the

                                    - 9 -


<PAGE>



increased depreciation on the Company's plant and equipment;  and the net effect
of various other items,  including  increased interest expense and a decrease in
Allowance for Funds Used During Construction on capital expenditures.

RESULTS OF OPERATIONS

      The following table reports the variation in the results of operations for
the three months ended March 31, 1999 compared to the same period in 1998:

                                              3 MONTHS ENDED MARCH 31,
                                                                   INCREASE
                                            1999        1998      (DECREASE)
                                            ----        ----      ----------
                                                (Thousands of Dollars)

Operating Revenues...............         $146,471    $143,882    $  2,589
Operating Expenses...............          121,441     119,879       1,562
                                           -------     -------     -------
Operating Income.................           25,030      24,003       1,027
Other Income.....................            1,157       1,791        (634)
                                           -------     -------     -------
Income before Interest
 Charges.........................           26,187      25,794         393
Interest Charges.................            7,083       6,627         456
                                           -------     -------     -------

Net Income.......................           19,104      19,167         (63)
Dividends Declared on Cumulative
 Preferred Stock.................              807         807         -
                                           -------     -------     -------
Income Available for Common
 Stock...........................         $ 18,297    $ 18,360    $    (63)
                                           =======     =======     =======

OPERATING REVENUES

      Operating  revenues  increased  $2.6 million (2%) for the first quarter of
1999 as compared to the first quarter of 1998.  Details of these revenue changes
by electric and gas departments are as follows:

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

Customer Sales...........           $  (139)                $1,950*
Sales to Other
 Utilities...............              (203)                  (104)
Fuel and Gas Cost
 Adjustment..............              (247)                 1,970
Deferred Revenues........            (1,424)**                (525)
Miscellaneous............              (374)                  (132)
Energy Delivery
 Service.................             1,615                    202
                                     ------                  -----
                                    $  (772)                $3,361
                                     ======                  =====

 *Both firm and interruptible revenues.

                                    - 10 -


<PAGE>



**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.

      Sales of  electricity  to full  service  customers  within  the  Company's
service  territory were essentially flat and firm sales of natural gas increased
9% in the  first  quarter  of 1999 as  compared  to the first  quarter  of 1998.
Changes in sales from last year by major customer  classifications are set forth
below.  Also  indicated  are the  changes  related  to  electric  and gas energy
delivery service:

                                 INCREASE (DECREASE) FROM PRIOR PERIOD
                                              FIRST QUARTER
                                      ELECTRIC                   GAS

Residential................                4 %                     6 %
Commercial.................               (4)                      9
Industrial.................               (2)                     (3)
Interruptible..............               N/A                     15

Energy Delivery
 Service...................                *                      16

*Delivery service for electric retail access customers was first recorded in the
 quarter ended March 31, 1998. The volume of  electricity  delivered was 4.5% of
 total own  territory  sales for the quarter ended March 31, 1999 as compared to
 .1% last year.

      Billing  heating  degree  days were 5% higher for the three  months  ended
March 31, 1999 when compared to the same period in 1998.

      Sales of electricity to residential customers in the first quarter of 1999
increased 4% from the comparable  prior year period resulting from a 3% increase
in usage per customer and a 1% increase in the number of  customers.  Commercial
sales in the first quarter of 1999  decreased 4% as compared to last year due to
the net effect of a 6% decrease in usage per  customer  and a 2% increase in the
number of customers.  Electric sales to industrial  customers  decreased 2%. The
reduction in commercial and industrial  sales was also impacted by the migration
of these customers to retail access service. Total sales to full service

                                    - 11 -


<PAGE>



and retail  access  commercial  customers  increased  4%  compared  to the first
quarter of 1998 while total industrial sales increased 3%.

      Sales  of gas to  residential  customers  for the  first  quarter  of 1999
increased 6% due to a 5% increase in usage per customer and a 1% increase in the
number of customers.  Sales of gas to commercial customers for the first quarter
of 1999  increased  9% due to a 6%  increase  in  usage  per  customer  and a 3%
increase in the number of customers.  Industrial gas sales  decreased 3% for the
comparative  quarters  due  primarily  to a decrease  in the gas used for boiler
ignition by one of the Company's generating plants.

      Interruptible  gas sales  increased  15% in the first  quarter of 1999 due
largely to an increase in boiler gas usage for electric generation.

OPERATING EXPENSES

      The following  table  reports the variation in the operating  expenses for
the three months  ended March 31, 1999  compared to the same period in the prior
year:

                                 INCREASE (DECREASE) FROM PRIOR PERIOD
                                              FIRST QUARTER
                                          AMOUNT               PERCENT
                                          (Thousands of Dollars)

Operating Expenses
 Fuel and Purchased
  Electricity..............               $(1,815)                (6)%
Purchased Natural
 Gas.......................                 2,838                 15
Other Expenses of
 Operation.................                  (959)                (4)
Maintenance................                 1,093                 20
Depreciation and
 Amortization..............                   453                  4
Taxes, Other than Income
 Tax.......................                  (494)                (3)
Federal Income tax.........                   446                  4
                                           ------                 --
            Total............             $ 1,562                  1%
                                           ======

      The cost of fuel and purchased electricity decreased $1.8 million (6%) for
the first  quarter  ended March 31, 1999  resulting  from a 1% decrease in total
system  output  combined  with a lower  average  price of fuel used in  electric
generation.

                                    - 12 -


<PAGE>



      Purchased  natural gas costs  increased  $2.8 million  (15%) for the first
quarter of 1999  resulting  from 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.)

      Maintenance  expenses  increased  $1.1  million  (20%)  primarily  due  to
increased costs related to tree trimming operations.

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 March 26, 1999, the Board of Directors of the
Company declared a quarterly dividend of $.54 per share,  payable May 1, 1999 to
shareholders of record as of April 9, 1999.

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.

                                    - 13 -


<PAGE>



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:

      The  Year  2000  problem  project  is still  currently  on  schedule  with
implementation projected to be completed by June 30, 1999. This is also the date
that the  Company's  remediation  is  scheduled  for  completion  under the NERC
Guidelines.

      Regarding  total  project  costs,  of a total  estimate  of $3.0  million,
approximately  $1.7  million has been  expended  through  March 1999,  including
$927,762 of internal labor  charges.  The Company does not expect final costs to
exceed this estimate; however, no assurances can be given.

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

      (a) 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 10-K 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 April 30, 1999, the
Company has been a defendant in  approximately  1,623 such individual  lawsuits.
Many of these lawsuits have been disposed of without any payment by the Company,
or for  immaterial  amounts.  While the amounts  demanded  in all the  remaining
lawsuits total several billions of dollars,  it is the Company's opinion,  based
on  its  experience  in  such   litigation  and  on  information   and  relevant
circumstances  known to it at this  time,  that these  lawsuits  will not have a
material adverse effect on the Company's  financial  position.  However,  if the
Company were ultimately held liable under these lawsuits and insurance  coverage
were not  available,  the cost thereof could have a material  adverse  effect (a
reasonable  estimate  of which  cannot  be made at this  time) on the  financial
condition of the Company if the Company  could not recover all or a  substantial
portion  thereof in rates.  The Company's  insurance does not extend to punitive
damages.

                                    - 14 -


<PAGE>



      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.

      (b) CITY OF NEWBURGH  LITIGATION.  For a discussion  of the lawsuit by the
City of Newburgh, New York (City) against the Company involving allegations that
the Company had violated certain laws, including  environmental laws, see Note 9
Commitments and Contingencies,  under the caption "Former Manufactured Gas Plant
Facilities," in Part II, Item 8 of the Company's 10-K Report.

      Subsequent  to the  December  18,  1998 jury award  referred to under said
caption,  the Company and the City entered into a  Settlement  Agreement,  dated
March 4, 1999, which received court approval on the same date.

      Under the  Settlement  Agreement  (i) said lawsuit was disposed of and the
City's claims were dismissed with  prejudice,  (ii) the City waived its right to
have  the  $16  million  awarded  by the  jury  for the  cost  of  environmental
remediation on the City's  property (as described under said caption) paid to or
for the  benefit  of the City and the  Company  agreed to  remediate  the City's
property at the  Company's  costs  pursuant to the New York State  Department of
Environmental  Conservation's  (NYSDEC) October 1995 Order on Consent (described
under said caption), (iii) the Company paid the City $2 million and will pay the
City  $500,000  in the future on the  occurrence  of certain  events (iv) if the
total cost of such  remediation  is less than $16 million,  the Company will pay
the City an additional amount on a formula basis up to $500,000 depending on the
extent to which the cost of  remediation  is less than $16 million,  and (v) the
Company  agreed  to  indemnify  and hold  harmless  the City  against  claims or
lawsuits  by any third  party  against  the City  alleging  injury,  damages  or
violation  of law caused by or arising  from the alleged  contamination  in said
lawsuit having migrated from the Company's to the City's property.

                                    - 15 -


<PAGE>



      The Company can make no  prediction as to the full  financial  effect this
matter will have on it, including the extent, if any, of insurance reimbursement
and  including  implementation  of  environmental  clean-up  under said Order on
Consent.

     (c) ORDER ON CONSENT.  Reference is made to the negotiations of the Company
with the  NYSDEC of the terms and  conditions  of a consent  order  relating  to
alleged  opacity  variances of its Danskammer  Plant and Roseton Plant (owned as
tenants-in-common by the Company,  Consolidated Edison Company of New York, Inc.
and Niagara Mohawk Power  Corporation) as described in Part I, Item 1, under the
caption  "Business - Environmental  Quality - Air" of the Company's 10-K Report.
The Company and the NYSDEC entered into an Order on Consent, effective April 26,
1999 (DEC Index No. D3-900-97-08),  pursuant to which the Company, in settlement
of a claim by the NYSDEC that  emissions  from said Plants  exceeded  applicable
opacity emissions standards,  agreed to a civil penalty of $1.5 million for both
plants,  of which  $500,000  is to be paid to the  NYSDEC  within 30 days of the
effective date of such Order,  and the remaining $1.0 million of such penalty is
suspended if the Company causes certain  environmental  projects in Dutchess and
Orange Counties,  New York to be implemented,  as set forth in said Order.  Said
Order also provides for (i) a new level of  stipulated  penalty  provisions  for
future  opacity  exceedences  and (ii) an Opacity  Reduction  Program,  all with
respect to said Plants.

      (d) ENVIRONMENTAL  LITIGATION. By letter dated April 13, 1999, the Company
was  advised  that  Riverkeeper,  Inc.,  Robert H. Boyle and John J.  Cronin had
commenced a citizen suit, in the United States  District  Court for the Southern
District of New York (99 Civ.  2536),  against  the  Company  under ss.11 of the
Endangered  Species Act, 16 U.S.C.  ss.1540,  seeking injunctive relief from the
Company's  alleged  unpermitted  takings of the  endangered  shortnose  sturgeon
through the Company's  Roseton and  Danskammer  Plants on the Hudson River.  The
Company  does not believe it has  violated  such Act and  intends to  vigorously
defend this action. The Company can make no prediction as to the outcome of this
litigation.

Item 4.     Submission of Matters to a Vote of Security Holders.

      Annual  Meeting  of   Shareholders.   The  Company's   Annual  Meeting  of
Shareholders  was held on April 27, 1999. The following  matters were voted upon
at such meeting:

                                    - 16 -


<PAGE>



      (a) ELECTION OF  DIRECTORS.  All of the nominees  proposed as directors by
the Board of Directors were elected,  and no other  nominees were proposed.  The
number of shares voted for each such director, and the number of shares withheld
for each such director,  out of a total number of shares voted of 14,735,845 are
as follows:

Name of Director              Shares For              Shares Withheld
----------------              ----------              ---------------

Jack Effron                   14,591,953                    143,892
Frances D. Fergusson          14,579,525                    156,320
Heinz K. Fridrich             14,583,804                    152,041
Edward F. X. Gallagher        14,594,664                    141,181
Paul J. Ganci                 14,600,024                    135,821
Charles LaForge               14,587,933                    147,912
John E. Mack III              14,595,089                    140,756
Edward P. Swyer               14,597,330                    138,515

      (b) INDEPENDENT ACCOUNTANTS.  The appointment by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's Independent Accountants for the year
1999 was ratified by a vote of the shareholders as follows:

Shares For              Shares Against                Shares Abstaining
----------              --------------                -----------------
14,570,623                  55,036                          110,186

      (c) APPOINTMENT OF OFFICERS.  Immediately  following the Company's  Annual
Meeting of Shareholders,  the Company's Board of Directors appointed Mr. Paul J.
Ganci as  Chairman of the Board and Chief  Executive  Officer.  Previously,  Mr.
Ganci  was  President  and  Chief  Executive  Officer.  The  Board of  Directors
appointed  Mr. Carl E. Meyer as  President  and Chief  Operating  Officer of the
Company; previously Mr. Meyer was Executive Vice President Operations. The Board
of Directors  also  appointed Mr. Allan R. Page as Executive  Vice  President of
Administration and Transition;  previously Mr. Page was Executive Vice President
Energy  Resources  and  Development.  The Board also  directed  that Mr. Page be
appointed  President and Chief Operating Officer of the Company's  subsidiaries,
Central  Hudson  Enterprises  Corporation,  CH Resources,  Inc. and Greene Point
Development Corporation.  Mr. Ganci is Chairman of the Board and Chief Executive
Officer of those subsidiaries.

                                    - 17 -


<PAGE>



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

(3)   Articles of Incorporation and Bylaws:

      (ii) 1--    Bylaws in effect on the date of this Report.

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

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

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

(i)  A  Report  dated  January  15,  1999  which   described  the  creation  and
establishment,  on January 8, 1999, of a series of debt securities in connection
with the Company's medium-term note program.

                                    - 18 -


<PAGE>



                                  SIGNATURES
                                  ----------

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

                        CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                        (Registrant)

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

Dated:  May 6, 1999

                                    - 19 -


<PAGE>