FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

(Mark One)

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

For the quarterly period ended.................September 30, 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 September 30, 1999.



<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION

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

                                     INDEX



      PART I - FINANCIAL INFORMATION                              PAGE

Item 1 -  Consolidated Financial Statements

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

            Consolidated Statement of Income -
             Nine Months Ended September 30, 1999
             and 1998                                               2

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

            Consolidated Statement of Cash Flows -
             Nine Months Ended September 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                                             9

Item 3 -    Quantitative and Qualitative Disclosure about
             Market Risk                                           18

      PART II - OTHER INFORMATION

Item 1 -    Legal Proceedings                                      19

Item 5 -    Other Information                                      20

Item 6 -    Exhibits and Reports on Form 8-K                       22

Signatures                                                         23

Exhibit Index                                                      24


<PAGE>
                         PART I - FINANCIAL INFORMATION

Item I - Consolidated Financial Statements

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

                                            For the 3 Months Ended September 30,
                                                  1999                   1998
                                                --------               --------
                                                      (Thousands of Dollars)
Operating Revenues
  Electric....................................  $113,944               $108,262
  Gas.........................................    12,415                 10,569
                                                --------               --------
    Total - own territory.....................   126,359                118,831
  Electric Sales to other utilities...........     7,921                  6,886
  Gas Sales to other utilities................        43                      6
                                                --------               --------
                                                 134,323                125,723
                                                --------               --------
Operating Expenses
  Operation:
    Fuel used in electric generation..........    27,935                 25,856
    Purchased electricity.....................    13,521                 10,906
    Purchased natural gas.....................     7,960                  4,479
    Other expenses of operation...............    25,338                 24,467
  Maintenance.................................     6,325                  6,766
  Depreciation and amortization...............    11,699                 11,413
  Taxes, other than income tax................    16,294                 15,538
  Federal income tax..........................     7,151                  7,948
                                                --------                -------
                                                 116,223                107,373
                                                --------                -------
Operating Income..............................    18,100                 18,350
                                                --------                -------
Other Income and Deductions
  Equity Earnings-Subcos......................       925                    (26)
  Allowance for equity funds used during
     construction.............................        41                     95
  Federal income tax..........................      (260)                   159
  Other - net.................................     2,968                  1,973
                                                --------                -------
                                                   3,674                  2,201
                                                --------                -------
Income before Interest Charges................    21,774                 20,551
                                                --------                -------

Interest Charges
  Interest on mortgage bonds..................     3,205                  3,559
  Interest on other long-term debt............     3,392                  2,174
  Other interest..............................     1,099                    896
  Allowance for borrowed funds used during
     construction.............................       (44)                  (115)
  Amortization of (premium) and expense on
     debt - net...............................       251                    227
                                                --------                -------
                                                   7,903                  6,741
                                                --------               --------

Net Income....................................    13,871                 13,810

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

Income Available for Common Stock.............     13,064                13,003
Dividends Declared on Common Stock............      9,106                 9,129
                                                ---------              --------

Balance Retained in the Business..............     $3,958                $3,874
                                                =========              ========

Common Stock:
  Average Shares Outstanding (000s)...........     16,862                16,961

  Earnings Per Share on Average Shares
     Outstanding..............................      $0.77                 $0.77

  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 9 Months Ended September 30,
                                                  1999                   1998
                                                --------               --------
                                                     (Thousands of Dollars)
Operating Revenues
  Electric.................................... $305,889                $299,893
  Gas.........................................   69,877                  62,740
                                                --------               --------
    Total - own territory.....................  375,766                 362,633
  Electric Sales to other utilities...........   21,887                  18,458
  Gas Sales to other utilities................      176                     620
                                                -------                --------
                                                397,829                 381,711
                                                -------                --------
Operating Expenses
  Operation:
    Fuel used in electric generation..........   68,720                  62,731
    Purchased electricity.....................   32,885                  33,556
    Purchased natural gas.....................   37,971                  30,523
    Other expenses of operation...............   71,975                  72,600
  Maintenance.................................   21,375                  19,101
  Depreciation and amortization...............   35,100                  34,075
  Taxes, other than income tax................   48,353                  48,075
  Federal income tax..........................   23,880                  24,294
                                                -------                --------
                                                340,259                 324,955
                                                -------                --------

Operating Income..............................   57,570                  56,756
                                                -------                --------

Other Income and Deductions
  Equity Earnings-Subcos......................       88                      22
  Allowance for equity funds used during
     construction.............................      152                     284
  Federal income tax..........................     (159)                    733
  Other - net.................................    6,702                   5,425
                                                -------                --------
                                                  6,783                   6,464
                                                -------                --------

Income before Interest Charges................   64,353                  63,220
                                                -------                --------

Interest Charges
  Interest on mortgage bonds..................    9,852                  10,678
  Interest on other long-term debt............    8,309                   6,524
  Other interest..............................    3,232                   2,667
  Allowance for borrowed funds used during
     construction.............................     (167)                   (346)
  Amortization of (premium) and expense on
     debt - net...............................      715                     679
                                                -------                --------
                                                 21,941                  20,202
                                                -------                --------

Net Income....................................   42,412                  43,018


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

Income Available for Common Stock.............   39,990                  40,596
Dividends Declared on Common Stock............   27,317                  27,462
                                                -------                --------

Balance Retained in the Business..............  $12,673                 $13,134
                                                =======                ========

Common Stock:
  Average Shares Outstanding (000s)...........   16,862                  17,084

  Earnings Per Share on Average Shares
     Outstanding..............................    $2.37                   $2.38

  Dividends Declared..........................    $1.62                  $1.615

                 See Notes to Consolidated Financial Statements.

                                      - 2 -

<PAGE>
                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


                                                September 30,      December 31,
                                                    1999               1998
             ASSETS                              (Unaudited)        (Audited)
                                                ------------       ------------
                                                     (Thousands of Dollars)
Utility Plant
   Electric...................................    $1,245,331         $1,222,743
   Gas........................................       163,712            158,165
   Common.....................................        98,727             94,271
   Nuclear fuel...............................        42,322             42,317
                                                ------------       ------------
                                                   1,550,092          1,517,496

   Less:  Accumulated depreciation............       627,457            597,383
          Nuclear fuel amortization...........        37,500             35,381
                                                ------------       ------------
                                                     885,135            884,732

   Construction work in progress..............        36,812             43,512
                                                ------------       ------------
         Net Utility Plant....................       921,947            928,244
                                                ------------       ------------

Other Property and Plant......................        26,768             19,059
                                                ------------       ------------
Investments and Other Assets
   Prefunded Pension Costs....................        44,582             40,218
   Other......................................        18,371             18,209
                                                ------------       ------------
         Total Investments and Other Assets...        62,953             58,427
                                                ------------       ------------


Current Assets
   Cash and cash equivalents..................         7,177             10,499
   Accounts receivable from customers-net of
      allowance for doubtful accounts.........        56,261             45,564
   Accrued unbilled utility revenues..........         9,956             15,233
   Other receivables..........................         4,271              4,555
   Fuel, materials and supplies, at average
      cost....................................        26,358             23,587
   Special deposits and prepayments...........       131,729             34,823
                                                ------------       ------------
         Total Current Assets.................       235,752            134,261
                                                ------------       ------------


Deferred Charges
   Regulatory assets .........................       143,430            149,261
   Unamortized debt expense...................         6,508              5,062
   Other......................................        32,062             21,724
                                                ------------       ------------
         Total Deferred Charges...............       182,000            176,047
                                                ------------       ------------

              Total Assets....................    $1,429,420         $1,316,038
                                                ============       ============



                 See Notes to Consolidated Financial Statements.

                                       -3-

<PAGE>
                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                           CONSOLIDATED BALANCE SHEET


                                               September 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............................    145,960               133,287
 Reacquired Capital Stock.....................    (27,143)              (27,143)
 Capital stock expense........................     (6,149)               (6,204)
                                                ----------             ---------
    Total Common Stock Equity.................    484,908               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...............................    347,151               356,918
                                                ----------             ---------
    Total Capitalization......................    888,089               885,128
                                                ----------             ---------

Current Liabilities
 Current maturities of long-term debt.........    144,718                39,507
 Notes payable................................      4,300                18,000
 Accounts payable.............................     32,965                23,591
 Accrued taxes and interest...................      6,316                 6,334
 Dividends payable............................      9,913                 9,913
 Accrued vacation.............................      4,344                 4,400
 Customer deposits............................      4,313                 4,248
 Other........................................     12,577                 7,932
                                                ----------             ---------
    Total Current Liabilities.................    219,446               113,925
                                                ----------             ---------

Deferred Credits and Other Liabilities
 Regulatory liabilities.......................     84,430                81,065
 Operating reserves...........................      6,247                 5,995
 Other........................................     28,863                27,251
                                                ----------             ---------
    Total Deferred Credits and Other Liabilities  119,540               114,311
                                                ----------             ---------

Accumulated Deferred Income Tax ..............    202,345               202,674
                                                ----------             ---------


       Total Capitalization and Liabilities... $1,429,420            $1,316,038
                                               ===========           ===========


                 See Notes to Consolidated Financial Statements.

                                       -4-

<PAGE>
                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                                          For the 9 Months Ended
                                                               September 30,
                                                          1999             1998
                                                         ------           ------
Operating Activities:                                    (Thousands of Dollars)

 Net Income...........................................  $42,412         $43,018

  Adjustments to reconcile  net income to net
     cash provided by operating activities:
      Depreciation, amortization & nuclear fuel
         amortization.................................   38,165          36,503
      Deferred income taxes, net......................    5,902          (1,195)
      Allowance for equity funds used during
         construction.................................     (152)           (284)
      Nine Mile 2 Plant deferred finance charges,
         net..........................................   (3,642)         (3,642)
      Provision for uncollectibles....................    1,950           2,125
      Accrued pension costs...........................   (8,471)         (8,106)
      Deferred gas costs..............................    3,285            (489)
      Deferred gas refunds............................      (95)         (1,465)
      Other, net......................................      715            (616)

  Changes in current assets and liabilities, net:
      Accounts receivable and unbilled revenues.......   (7,086)         14,759
      Fuel, materials and supplies....................   (2,771)         (1,075)
      Special deposits and prepayments................  (96,906)         (5,036)
      Accounts payable................................    9,374          (5,675)
      Accrued taxes and interest......................      (18)         11,957
      Other current liabilities.......................    4,654             (79)
                                                        --------        --------
 Net Cash Provided by (Used in) Operating Activities..  (12,684)         80,700
                                                        --------        --------

Investing Activities:

 Additions to plant...................................  (31,163)        (34,082)
 Allowance for equity funds used during construction..      152             284
                                                        --------        --------
    Net additions to plant............................  (31,011)        (33,798)
 Subsidiaries fixed asset additions...................   (7,290)           (827)
 Nine Mile 2 Plant decommissioning trust fund.........     (651)           (651)
 Other, net...........................................     (666)           (652)
                                                        --------        --------

 Net Cash Used in Investing Activities................  (39,618)        (35,928)
                                                        --------        --------

Financing Activities:

 Proceeds from issuance of long-term debt.............  177,300          16,502
 Net borrowings (repayments) of short-term debt.......  (13,700)            -
 Retirement and redemption of long-term debt..........  (81,877)         (1,233)
 Dividends paid on cumulative preferred and common
    stock.............................................  (29,739)        (30,000)
 Reacquired capital stock.............................      -           (15,688)
 Debt Issuance costs..................................   (3,004)            -
                                                        --------        --------
 Net Cash Provided by (Used in) Financing Activities..   48,980         (30,419)
                                                        --------        --------

Net Change in Cash and Cash Equivalents...............   (3,322)         14,353

Cash and Cash Equivalents - Beginning of Year.........   10,499           9,054
                                                        --------        --------
Cash and Cash Equivalents - End of Period.............   $7,177         $23,407
                                                        ========        ========


Supplemental Disclosure of Cash Flow Information

 Interest paid (net of amounts capitalized)...........  $14,490         $13,100

 Federal income tax paid..............................  $22,825         $17,900



                 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," hereinafter the
(Settlement Agreement).

      At  September  30,  1999,  net  regulatory   assets  associated  with  the
fossil-fueled  generating  assets totaled  $500,000.  The Company did not charge
against  income any of these net  regulatory  assets  because  recovery  of such
assets is considered probable under the Settlement Agreement.

Holding Company Restructuring

      As  reported  under  the  caption  "Competitive  Opportunities  Proceeding
Settlement  Agreement"  in  Note  2 to  the  Consolidated  Financial  Statements
included in the Company's  10-K Report,  the Company has received  approval from
its shareholders  and regulators to form a holding company.  It is expected that
the holding  company  restructuring  will occur in December  1999.  Prior to the
restructuring  date,  additional  equity may be transferred  from the Company to
unregulated  operations.  As of September  30, 1999,  $25.5  million of the $100
million  authorized by the Public  Service  Commission of the State of New York,
hereinafter the (PSC), 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                                Nine Months Ended
                                           September 30, 1999                              September 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                $121,842     $12,142     $ -      $133,984     $327,715     $69,287     $ -      $397,002
 external customers
Intersegment revenues              23         316       -           339           61         766       -           827
     Total revenues           121,865      12,458       -       134,323      327,776      70,053       -       397,829
Earnings per share                .83       (.11)      .05          .77         2.04         .32      .01         2.37




                                             Quarter Ended                                Nine Months Ended
                                           September 30, 1998                              September 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                $115,126     $10,289     $ -      $125,415     $318,288     $62,504     $ -      $380,792
 external customers
Intersegment revenues              22         286       -           308           63         856       -           919
     Total revenues           115,148      10,575       -       125,723      318,351      63,360       -       381,711
Earnings per share                .83        (.06)      -           .77         1.98         .40       -          2.38



</TABLE>

                                    - 8 -

<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.

      For  information  about  market  risk and Company  activities  relating to
derivative  financial  instruments and other financial  instruments,  see Item 3
"Quantitative and Qualitative Disclosure about Market Risk."

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  September 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  nine  months  of  1999
contributed  to the  increase  in the book value of common  stock from $28.00 at
December 31, 1998 to $28.76 at September 30, 1999 and the increase in the common
equity ratio from 51.0% at December 31, 1998 to 52.1% at September 30, 1999.



                                    - 9 -

<PAGE>



      For the nine months ended September 30, 1999, cash expenditures related to
the  construction  program of the Company  amounted to $31.0  million.  The cash
requirements for such expenditures were funded from internal sources.

      The Company has $51.5 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  September  30,  1999,  the Company  had $4.3  million of
short-term  debt  outstanding  and had cash and cash  equivalents  totaling $7.2
million.  Authorization from the New York State Public Service Commission (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 these  bonds may be  redeemed  any time after  August 1,  2009,  at the
Company's option. The 7-3/8% series was 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  ($43.6  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 a periodic  offering of a certain  amount of  short-term,  tax exempt
debt  to  investors  by  broker/dealers  on an  auction-bid  basis.  Prospective
investors' bids are reviewed by an independent  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

                                    - 10 -

<PAGE>

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 were redeemed on November
1,  1999 and the 1987  refinanced  pollution  control  bonds  were  redeemed  on
September 1, 1999.

EARNINGS PER SHARE

      Earnings  per share of common  stock  were $.77 for the third  quarter  of
1999,  remaining  the same as the third  quarter of 1998.  Earnings per share of
common stock were $2.37 for the first nine months ended  September  30, 1999, as
compared to $2.38 for the nine months ended September 30, 1998.

      Increased revenue resulting from a warm summer and an increase in earnings
from expanded  subsidiary  operations  helped to hold third quarter  earnings at
last year's level.  Operating  revenues  increased 7%. The increase was actually
higher,  but under the Company's  Settlement  Agreement  with the PSC (described
under the caption "Competitive Opportunities Proceeding Settlement Agreement" in
Note 2 to the Consolidated Financial Statements included in the Company's Annual
Report  on Form  10-K for the year  ended  December  31,  1998  (Company's  10-K
Report)), the Company  deferred $3.7 million of electric  revenues,  or $.14 per
share,  in excess of the 10.6% rate of return  cap set forth in said  Settlement
Agreement and described under said caption.  In addition to an increase in sales
of electricity due to the warmer weather,  the higher revenues include increases
in amounts collected under the Company's electric fuel cost adjustment, sales of
electricity for resale and interruptible gas sales for electric generation.  The
increase in revenues was largely offset by an increase in operating  expenses of
8%,  relating  primarily  to  increases  in the  cost of fuel  used in  electric
generation, purchased electricity and purchased natural gas caused by the higher
electric  sales  (including  sales for  resale)  and  interruptible  gas  sales.
Earnings  were  also  enhanced  by  an  increase  in  earnings  from  subsidiary
operations  (other  income),  primarily  from the  operations by an affiliate of
newly acquired electric generating facilities. The increase in other income also
includes  interest  earned on  proceeds  held in escrow from debt issued for the
refinancing  of debt as  discussed  in the  "Capital  Resources  and  Liquidity"
section of Item 2. This interest  earned on the escrow balance serves to offset,
in the interim,  that portion of the increase in interest charges related to the
new issuances.

      In  September  1999,  the  Company  incurred  an  estimated  $8 million of
incremental  storm  expenses  for  Tropical  Storm Floyd.

                                    - 11 -

<PAGE>

These  expenses  were deferred in anticipation that they will be offset by
electric earnings in excess of said rate of return cap which are deferred under
the Company's Settlement Agreement with the PSC. Reported earnings per share for
the third quarter were not affected by the storm.

      Earnings for the nine months ended  September  30, 1999  decreased by $.01
per share as  compared to the same  period in 1998.  An  increase  in  operating
expenses (excluding fuel used in electric generation,  purchased electricity and
natural gas costs) and a reduction in gas net operating revenues (less purchased
gas costs) were offset largely by an increase in electric net operating revenues
(less fuel and purchased  electricity  costs) due to increased sales and the net
favorable  impact of  non-recurring  adjustments  recorded in both time periods.
Earnings  were also  enhanced by the reduction in the number of shares of common
stock.  The increase in operating  expenses is primarily due to increases in the
cost of maintenance for electric

generating  plant and  overhead  lines and  increased  depreciation  expense and
property  taxes.  As with the results for the quarter,  the nine month change in
electric net operating revenues also reflects the deferral of revenues in excess
of the rate of  return  cap.  A total of $4.7  million  or $.18  per  share  was
deferred.

RESULTS OF OPERATIONS

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

                                       3 MONTHS ENDED SEPTEMBER 30,
                                                             INCREASE
                                      1999        1998      (DECREASE)
                                          (Thousands of Dollars)
Operating Revenues...............   $134,323    $125,723    $  8,600
Operating Expenses...............    116,223     107,373       8,850
                                     -------     -------     -------
Operating Income.................     18,100      18,350        (250)
Other Income.....................      3,674       2,201       1,473
                                     -------     -------     -------
Income before Interest
 Charges.........................     21,774      20,551       1,223
Interest Charges.................      7,903       6,741       1,162
                                     -------     -------     -------

Net Income.......................     13,871      13,810          61
Dividends Declared on Cumulative
 Preferred Stock.................        807         807           0
                                     -------     -------     -------
Income Available for Common
 Stock...........................   $ 13,064    $ 13,003    $     61
                                     =======     =======     =======





                                    - 12 -

<PAGE>

                                       9 MONTHS ENDED SEPTEMBER 30,
                                                           INCREASE
                                      1999        1998    (DECREASE)
                                          (Thousands of Dollars)
Operating Revenues...............   $397,829    $381,711    $ 16,118
Operating Expenses...............    340,259     324,955      15,304
                                     -------     -------     -------
Operating Income.................     57,570      56,756         814
Other Income.....................      6,783       6,464         319
                                     -------     -------     -------
Income before Interest
 Charges.........................     64,353      63,220       1,133
Interest Charges.................     21,941      20,202       1,739
                                     -------     -------     -------

Net Income.......................     42,412      43,018        (606)
Dividends Declared on Cumulative
 Preferred Stock.................      2,422       2,422           0
                                     -------     -------     -------
Income Available for Common
 Stock...........................   $ 39,990    $ 40,596    $   (606)
                                     =======     =======     =======

OPERATING REVENUES

      Operating  revenues  increased  $8.6 million (7%) for the third quarter of
1999 as compared to the third quarter of 1998 and  increased  $16.1 million (4%)
for the nine months ended  September 30, 1999.  Details of these revenue changes
by electric and gas segments are as follows:

                               INCREASE (DECREASE) FROM PRIOR PERIOD
                                THIRD QUARTER           NINE MONTHS
                              Electric    Gas      Electric        Gas
                                          (Thousands of Dollars)
Customer Sales*........       $3,969    $2,402**    $4,543      $ 5,591**
Sales to Other
 Utilities..............       1,035        37       3,429         (444)
Fuel and Gas Cost
 Adjustment.............       5,243       (54)      5,908        2,844
Deferred Revenues.......      (3,162)***  (779)     (4,080)***   (1,562)
Miscellaneous...........        (368)      277        (375)         264
                               -----     -----       -----        ------
                              $6,717    $1,883      $9,425      $ 6,693
                               =====     =====       =====       ======

  *Including electricity and gas supplied by others.
 **Both firm and interruptible revenues.
***Includes the deferral and  restoration  of revenues  related to the Company's
   Retail Access  Program and earnings in excess of the rate of return cap under
   said Settlement Agreement with the PSC.


                                    - 13 -

<PAGE>



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 5%, and sales of natural gas to firm customers increased 1%,
for the third quarter of 1999 as compared to the third quarter of 1998.  For the
nine months ended September 30, 1999,  electric sales increased 4% and gas sales
to firm customers increased 9% 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
                                  THIRD QUARTER         NINE MONTHS
                            Electric       Gas       Electric     Gas
Residential..............     10%          (1)%         6%         6%
Commercial...............      5            2           4          9
Industrial...............      1           14           1          6
Interruptible............     N/A          35          N/A        20

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

      Cooling  degree days were 37% higher for the quarter  ended  September 30,
1999 as compared to the quarter  ended  September 30, 1998.  For the  comparable
nine  months  ended  September  30 in 1999  and  1998,  favorable  weather  also
contributed to the increase in electric and gas sales.  Cooling degree days were
32% higher and heating degree days increased by 6%.

OPERATING EXPENSES

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

                                    - 14 -

<PAGE>




                               INCREASE (DECREASE) FROM PRIOR PERIOD
                               THIRD QUARTER              NINE MONTHS
                            Amount     Percent         Amount     Percent
                                        (Thousands of Dollars)
Operating Expenses
 Fuel and Purchased
  Electricity............  $4,694         13%         $ 5,318        6%
Purchased Natural
 Gas.....................   3,481         78            7,448       24
Other Expenses of
 Operation...............     871          4             (625)      (1)
Maintenance..............    (441)        (7)           2,274       12
Depreciation and
 Amortization............     286          3            1,025        3
Taxes, Other than Income
 Tax.....................     756          5              278        1
Federal Income tax.......    (797)       (10)            (414)      (2)
                            -----        ---            ------      --
            Total......... $8,850          8%          $15,304       5%
                            =====                       ======

      Fuel and purchased  electricity costs increased $4.7 million (13%) for the
third quarter of 1999 and $5.3 million (6%) for the nine months ended  September
30, 1999 both largely  attributable  to an increase in electric sales  including
sales for resale.

      Purchased  natural gas costs  increased  $3.5 million  (78%) for the third
quarter of 1999 resulting  primarily from an increase in interruptible gas sales
due to an  increase  in  boiler  gas usage for  electric  generation.  Purchased
natural  gas  costs  increased  $7.4  million  (24%) for the nine  months  ended
September  30,  1999 due both to an  increase  in  residential,  commercial  and
industrial sales as well as interruptible gas sales due to an increase in boiler
gas usage for electric generation.

      Maintenance  expenses  increased  $2.3  million  (12%) for the nine months
ended  September  30, 1999  primarily  due to  increased  costs  related to 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 September 24, 1999, the Board of Directors of
the Company declared a quarterly dividend of $.54 per share, payable November 1,
1999 to shareholders  of record as of October 11, 1999  maintaining the $.54 per
share level established in June 1998.


                                    - 15 -

<PAGE>



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  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.


                                    - 16 -

<PAGE>



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:

      On June 1, 1999, Company officials  reported to the Northeast  Reliability
Council (NERC) and announced that they believe 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 (Y2K) ready;  however,  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,  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.  In August,  the Company  participated  in the successful Year 2000
Interoperability  Verification  Tests  of  the  telecommunications  network  and
electric  utility  power  control  systems.  The  Company  has also  developed a
comprehensive Contingency Plan. On September 9, 1999 the Company participated in
a  successful  North  America-wide  drill to test the  readiness of the electric
power industry for the Year 2000,  including its Contingency  Plan.  Response to
Y2K-related  emergencies will also be coordinated with local emergency  services
agencies, as is done during storms and other emergencies.

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

      Regarding  total  project  costs,  of a total  estimate  of $3.0  million,
approximately  $2.3 million has been expended through September 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.


                                    - 17 -

<PAGE>



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.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The Company's  exposure to commodity  price risks related to its purchases
of natural  gas,  fuel for  electric  generation  and other  power  supplies  is
mitigated by its  electric and gas cost  adjustment  clauses.  These  adjustment
mechanisms  provide for the return or collection  of costs to or from  customers
for costs  below or in excess of base costs  included  in rates.  Addi-tionally,
variations  in  electric  fuel  costs  are  subject  to a fuel  costs  incentive
mechanism with an annual  exposure of up to $3.0 million in additional  revenues
or costs.

      The Company has also  implemented its energy risk management  program with
its  primary  goal  being to further  manage,  through  the use of defined  risk
management  practices,  price risk  associated  with commodity  purchases in its
operations.  The Company's written policy and procedures for this program allows
for  the use of  derivative  financial  instruments  to  hedge  price  risk  and
prohibits the use of these instruments for speculative  purposes.  Additionally,
the PSC, in a Memorandum and Resolution  (Resolution)  effective April 13, 1999,
authorized the inclusion of risk management costs as a recoverable  component of
the  Gas  Adjustment  Clause  (GAC).  The  Resolution  defines  them  as  "costs


                                    - 18 -

<PAGE>


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."

      In September 1999, the Company purchased NYMEX gas futures contracts and
entered into a basis swap contract with a counterparty  to hedge the cost of gas
purchases  for its Fixed Price Gas Program for the period  November 1999 through
October  2000.  The fair  value of these  derivative  financial  instruments  at
September  30,  1999 is not  material  to the  Company's  financial  position or
results of operations.  Transaction  costs and resultant gains or losses will be
included in the Company's GAC, as indicated in the preceding paragraph.

      The  Company  manages  it  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.

                          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 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 September 30, 1999,
the  Company  has  been a  defendant  in  approximately  1,800  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

                                    - 19 -

<PAGE>


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 the Company  against one insurer,
Travelers  Casualty  and Surety  Company  (f/k/a The Aetna  Casualty  and Surety
Company) (Travelers),  seeking a declaration that Travelers owed the Company the
cost of defense in the underlying asbestos litigation.  Travelers has since paid
the Company  approximately $3.2 million consisting of a portion of the Company'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
the Company.

Item 5.     Other Information

      (a)  Independent  System  Operator.  Reference is made to the caption "New
York Power Pool/Independent  System Operator" referred to in Item 2 of Part I of
the Company's 10-K Report for a discussion of the member systems of the New York
Power Pool (NYPP)  proposal to establish an Independent  System  Operator (ISO),
and a New York State Reliability council (Reliability  Council) to supersede the
NYPP. On September 15, 1999, the Federal Energy  Regulatory  Commission gave its
final approval for the ISO and the Reliability  Council. The Company expects the
ISO and the  Reliability  Council to begin  operation in November  1999 at which
time the NYPP would terminate. The Company does not expect such restructuring to
have a  material  adverse  effect  on  its  financial  position  or  results  of
operations.

      (b) Environmental  Litigation.  Reference is made to Part II, Item 1(d) of
the Company's  Quarterly  Report,  on Form 10-Q, for the quarterly  period ended
March 31,  1999 for a  discussion  of the  Citizen  suit  commenced  against the
Company under Section 11 of the Endangered Species Act, 16 U.S.C. Section 1540.



                                    - 20 -

<PAGE>



      Although the Company continues to believe it has not violated such Act, if
the court were to grant the relief requested by plaintiffs, the Company could be
required   temporarily  to  cease  operations  of  the  Roseton  Steam  Electric
Generating  Plant  ("Roseton  Plant,"  described in Item 2 of the Company's 10-K
Report,  under the captions "Electric - General" and "Electric - Roseton Plant")
and the Danskammer Plant Steam Electric Generating Station  ("Danskammer Plant",
described in Item 2 of the Company's  10-K Report under the caption  "Electric -
General").  If  the  Company  were  required  to  cease  such  operations  for a
substantial  period of time,  it would  have a  material  adverse  effect on the
Company's financial position and results of operations.

      (c) Auction of the Roseton and Danskammer Plants. Reference is made to the
caption  "Auction  of  Fossil  Generation  Plants,"  in Note 2 of the  Notes  to
Financial  Statements  referred to in Item 8 of the Company's  10-K Report for a
discussion  of the required  sale of the  Danskammer  and the Roseton  Plants by
auction.  The Company now expects  approval by the PSC of the auction plan early
in 2000 and sale of these Plants in early 2001.

      (d) Environmental Quality. Reference is made to the caption "Environmental
Quality - Air" in Item 1 of the  Company's  10-K Report for a discussion  of the
federal and state  regulations  of air emissions from the Danskammer and Roseton
Plants.  Published  reports on October 14 and 15,  1999  indicate  that New York
State Governor Pataki will order electric generation plants in New York State to
reduce  dramatically  sulfur dioxide and nitrogen  dioxide  emissions beyond the
reductions  mandated by federal law. Until the issuance and analysis of any such
order, the Company can make no predication as to the effect of such order on the
operation of the  Danskammer  and Roseton  Plants;  however,  the effect of such
Order,  if legally  binding,  would be to increase the costs of  operating  such
Plants and could require capital improvements.

      Such  published  reports also  indicate  that the New York State  Attorney
General  is  investigating  eight (8) New York  State  older  power  plants  for
possible  violations of federal and state air emission rules.  By letter,  dated
October 12,  1999,  from the Office of said  Attorney  General,  the Company was
notified  that  such  investigation   indicates  that  the  Company,  "may  have
constructed,  and continues to operate,  major  modifications  to its Danskammer
[Plant...] without obtaining [certain] requisite pre-construction permits." Such
letter  requests that the Company provide  certain  information  with respect to
such  investigation.  The Company is in the process of reviewing  this matter in
depth, but believes any required permits were obtained.



                                 - 21 -

<PAGE>

      (e) Nine Mile 2 Plant.  Reference  is made (i) to the  description  of the
Nine Mile 2 Plant (in which the Company has a 9% interest as a tenant-in-common)
contained in Note 3 of the Notes to Financial  Statements  referred to in Item 8
of the 10-K  Report and (ii) to the  proposed  sale of the  cotenancy  interests
thereon of Niagara Mohawk Power Corporation  (Niagara Mohawk) and New York State
Electric  and  Gas  Corporation,   as  described  in  the  subcaption   "Nuclear
Operations"  of Item 7 of the  10-K  Report  and in Item  5(a) of the  Company's
Quarterly Report, on Form 10-Q, for the quarterly period ended June 30, 1999.


      On September 30, 1999, the Nuclear  Regulatory  Commission  (NRC) issued a
Plant  Performance  Review on the Nine  Mile 2 and Nine Mile 1 (wholly  owned by
Niagara Mohawk) plants. The NRC stated that it will increase its scrutiny of the
operation  of the Nine  Mile  plants  over the next six  months as a result of a
decline in the  performance  of those plants due to  weaknesses in areas such as
plant  maintenance,  work  planning and  scheduling,  and  engineering  support.
Niagara  Mohawk has announced  significant  management  changes at the Nine Mile
plants,  including the reassignment of several experienced PECO Energy employees
to the site.

      If operating  performance of the Nine Mile 2 Plant  deteriorates  further,
significant  expenditures may be required to improve performance,  the impact of
which on the Company cannot now be predicted.


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.

      (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.


                                    - 22 -

<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:        /s/ Donna S. Doyle

                                       Donna S. Doyle
                                         Controller
                               Authorized Officer and Chief
                                     Accounting Officer

Dated:  November 8, 1999


                                      -23-

<PAGE>

                                 EXHIBIT INDEX

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

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

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

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


                                    - 24 -