----

| UNITED      STATESSECURITIES      AND EXCHANGE COMMISSIONWashington,      D.C.   20549 FORM      10-Q |
|---------------------------------------------------------------------------------------------------------------------------|

| (Mark      One) |                                                                                                                                                                                                                                                                                               |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| x               | QUARTERLY      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIESEXCHANGE      ACT OF 1934For      the quarterly period ended   September      30, 2008                                                                                                             |
| or         |
| ¨          | TRANSITION      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIESEXCHANGE      ACT OF 1934For      the transition period from             to              |

| Commission      file number 1-8222 Central Vermont Public      Service Corporation(Exact      name of registrant as specified in itscharter) |
|---------------------------------------------------------------------------------------------------------------------------------------------------|

| Vermont(State      or other jurisdiction ofincorporation      or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 03-0111290(IRS      EmployerIdentification      No.)  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
| 77 Grove Street,      Rutland, Vermont(Address      of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 05701(Zip      Code)                                  |
| Registrant's telephone number,      including area code 802-773-2711                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                          (Former      name, former address and former fiscal year, if changed since last      report) |

| 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      by check mark whether the registrant is a large accelerated filer, an      accelerated filer, a non-accelerated filer, or a smaller reporting      company.  See the definitions of "large accelerated filer",      "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the      Exchange Act.  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Large      accelerated filer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | ¨ | Accelerated      filer | x |
| Non-accelerated      filer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | ¨ (Do not check if a smaller      reporting company) | Smaller      reporting company | ¨ |
| Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Exchange Act). Yes ¨ No x Indicate      the number of shares outstanding of each of the issuer's classes of common      stock, as of the latest practicable date.  As of October 31,      2008 there were outstanding 10,361,809 shares of Common Stock, $6 Par      Value.                                                                                                                                                                                                                                                                                                                                                     |

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| CENTRAL      VERMONT PUBLIC SERVICE CORPORATION      |
|------------------------------------------------------|
| Form      10-Q for Period Ended September 30, 2008   |
|                                                 |
| Table      of Contents                               |
|                                                 |
| PART      I.   Financial Information: |   |   |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      1. | Financial      Statements |   |   |
|                                                 |   |   | Condensed      Consolidated Statements of Income |   | 2 |
|                                                 |   |   | Condensed      Consolidated Statements of Comprehensive Income |   | 3 |
|                                                 |   |   | Condensed      Consolidated Balance Sheets |   | 4 |
|                                                 |   |   | Condensed      Consolidated Statements of Cash Flows |   | 6 |
|                                                 |   |   | Condensed      Consolidated Statement of Changes in Common Equity |   | 7 |
|                                                 |   |   | Notes      to Condensed Consolidated Financial Statements |   | 8 |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      2. | Management's      Discussion and Analysis of Financial Condition and Results of      Operations | 24 |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      3. | Quantitative      and Qualitative Disclosures about Market Risk Controls and      Procedures |   | 35 |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      4. | Controls      and Procedures |   | 36 |
|                                                 |   |   |   |   |   |   |
| PART      II.   Other Information:    |   |   |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      1. | Legal      Proceedings |   | 37 |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      1A. | Risk      Factors |   | 37 |
|                                                 |   |   |   |   |   |   |
|                                                 | Item      6. | Exhibits |   |   | 38 |
|                                                 |   |   |   |   |   |
| SIGNATURES                                           |   |   |   | 39 |

----

| CENTRAL VERMONT PUBLIC SERVICE      CORPORATION           |   |
|-----------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENTS OF INCOME          |   |
| (dollars      in thousands, except per share data)        |   |
| (unaudited)                                               |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|                                                      |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Operating      Revenues                                   |   | $ | 83,767 |   |   | $ | 79,174 |   |   | $ | 259,478 |   |   | $ | 243,250 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Expenses                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchased      Power - affiliates                         |   |   | 15,008 |   |   |   | 13,769 |   |   |   | 47,746 |   |   |   | 41,724 |   |
| Purchased      Power - other                              |   |   | 25,123 |   |   |   | 24,284 |   |   |   | 76,573 |   |   |   | 78,408 |   |
| Production                                                |   |   | 2,881 |   |   |   | 2,780 |   |   |   | 9,059 |   |   |   | 8,725 |   |
| Transmission      - affiliates                            |   |   | (1,396 | ) |   |   | 108 |   |   |   | 6,047 |   |   |   | 3,021 |   |
| Transmission      - other                                 |   |   | 5,304 |   |   |   | 4,405 |   |   |   | 13,625 |   |   |   | 12,397 |   |
| Other      operation                                      |   |   | 12,125 |   |   |   | 12,011 |   |   |   | 40,164 |   |   |   | 39,018 |   |
| Maintenance                                               |   |   | 6,518 |   |   |   | 7,476 |   |   |   | 19,160 |   |   |   | 21,404 |   |
| Depreciation                                              |   |   | 3,936 |   |   |   | 3,835 |   |   |   | 11,704 |   |   |   | 11,349 |   |
| Taxes      other than income                              |   |   | 3,833 |   |   |   | 3,755 |   |   |   | 11,585 |   |   |   | 11,259 |   |
| Income      tax expense                                   |   |   | 3,120 |   |   |   | 1,604 |   |   |   | 5,825 |   |   |   | 3,848 |   |
| Total      Operating Expenses                             |   |   | 76,452 |   |   |   | 74,027 |   |   |   | 241,488 |   |   |   | 231,153 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Utility      Operating Income                             |   |   | 7,315 |   |   |   | 5,147 |   |   |   | 17,990 |   |   |   | 12,097 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      in earnings of affiliates                     |   |   | 4,043 |   |   |   | 1,521 |   |   |   | 12,242 |   |   |   | 4,812 |   |
| Allowance      for equity funds during construction       |   |   | 67 |   |   |   | 9 |   |   |   | 131 |   |   |   | 25 |   |
| Other      income                                         |   |   | 807 |   |   |   | 758 |   |   |   | 2,443 |   |   |   | 2,874 |   |
| Other      deductions                                     |   |   | (1,301 | ) |   |   | (592 | ) |   |   | (3,466 | ) |   |   | (1,612 | ) |
| Income      tax expense                                   |   |   | (1,467 | ) |   |   | (385 | ) |   |   | (4,350 | ) |   |   | (1,275 | ) |
| Total      Other Income                                   |   |   | 2,149 |   |   |   | 1,311 |   |   |   | 7,000 |   |   |   | 4,824 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Expense                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on long-term debt                           |   |   | 2,833 |   |   |   | 1,799 |   |   |   | 6,946 |   |   |   | 5,397 |   |
| Other      interest                                       |   |   | 183 |   |   |   | 341 |   |   |   | 1,718 |   |   |   | 985 |   |
| Allowance      for borrowed funds during construction     |   |   | (33 | ) |   |   | (3 | ) |   |   | (64 | ) |   |   | (9 | ) |
| Total      Interest Expense                               |   |   | 2,983 |   |   |   | 2,137 |   |   |   | 8,600 |   |   |   | 6,373 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income                                           |   |   | 6,481 |   |   |   | 4,321 |   |   |   | 16,390 |   |   |   | 10,548 |   |
| Dividends      declared on preferred stock                |   |   | 92 |   |   |   | 92 |   |   |   | 276 |   |   |   | 276 |   |
| Earnings      available for common stock                  |   | $ | 6,389 |   |   | $ | 4,229 |   |   | $ | 16,114 |   |   | $ | 10,272 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per      Common Share Data:                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per share                             |   | $ | 0.62 |   |   | $ | 0.41 |   |   | $ | 1.56 |   |   | $ | 1.01 |   |
| Diluted      earnings per share                           |   | $ | 0.61 |   |   | $ | 0.41 |   |   | $ | 1.55 |   |   | $ | 0.99 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      shares of common stock outstanding - basic   |   |   | 10,352,262 |   |   |   | 10,197,869 |   |   |   | 10,321,998 |   |   |   | 10,173,647 |   |
| Average      shares of common stock outstanding - diluted |   |   | 10,422,143 |   |   |   | 10,380,747 |   |   |   | 10,399,062 |   |   |   | 10,337,226 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per share of common stock         |   | $ | 0.23 |   |   | $ | 0.23 |   |   | $ | 0.92 |   |   | $ | 0.92 |   |

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| CENTRAL      VERMONT PUBLIC SERVICE CORPORATION                                                                                                    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                                                                     |   |
| (dollars      in thousands)                                                                                                                        |   |
| (unaudited)                                                                                                                                        |   |
|                                                                                                                                               |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|                                                                                                                                               |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Net      Income                                                                                                                                    |   | $ | 6,481 |   |   | $ | 4,321 |   |   | $ | 16,390 |   |   | $ | 10,548 |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income, net      of tax:                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Defined      benefit pension and postretirement medical plans:                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Portion      reclassified through amortizations, included in benefit    costs      and recognized in net income:   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Actuarial      losses, net of income taxes of $0, $3, $1 and $9                                    |   |   | 0 |   |   |   | 5 |   |   |   | 1 |   |   |   | 14 |   |
|         Prior      service cost, net of income taxes of $2, $2, $7 and $7                                  |   |   | 4 |   |   |   | 3 |   |   |   | 10 |   |   |   | 10 |   |
|                                                                                                                                               |   |   | 4 |   |   |   | 8 |   |   |   | 11 |   |   |   | 24 |   |
|   Portion      reclassified due to adoption of SFAS 158 measurement    provision,      included in retained earnings |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Prior      service cost, net of income taxes of $0, $0, $2 and $0                                  |   |   | 0 |   |   |   | 0 |   |   |   | 4 |   |   |   | 0 |   |
|                                                                                                                                               |   |   | 0 |   |   |   | 0 |   |   |   | 4 |   |   |   | 0 |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income adjustments                                                                                                              |   |   | 4 |   |   |   | 8 |   |   |   | 15 |   |   |   | 24 |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      comprehensive income                                                                                                                    |   | $ | 6,485 |   |   | $ | 4,329 |   |   | $ | 16,405 |   |   | $ | 10,572 |   |

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| CENTRAL VERMONT PUBLIC SERVICE      CORPORATION                                                                                                      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED BALANCE SHEETS                                                                                                           |   |
| (dollars      in thousands, except share data)                                                                                                       |   |
| (unaudited)                                                                                                                                          |   |
|                                                                                                                                                 |   | September      30, 2008 |   |   | December      31, 2007 |   |
| ASSETS                                                                                                                                               |   |   |   |   |   |   |
| Utility      plant                                                                                                                                   |   |   |   |   |   |   |
|   Utility      plant, at original cost                                                                                                     |   | $ | 550,211 |   |   | $ | 538,229 |   |
|   Less      accumulated depreciation                                                                                                       |   |   | 242,772 |   |   |   | 235,465 |   |
|   Utility      plant, at original cost, net of accumulated depreciation                                                                    |   |   | 307,439 |   |   |   | 302,764 |   |
|   Property      under capital leases, net                                                                                                  |   |   | 6,108 |   |   |   | 6,788 |   |
|   Construction      work-in-progress                                                                                                       |   |   | 18,153 |   |   |   | 9,611 |   |
|   Nuclear      fuel, net                                                                                                                   |   |   | 1,498 |   |   |   | 1,105 |   |
| Total      utility plant, net                                                                                                                        |   |   | 333,198 |   |   |   | 320,268 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Investments      and other assets                                                                                                                    |   |   |   |   |   |   |   |   |
|   Investments      in affiliates                                                                                                           |   |   | 97,639 |   |   |   | 93,452 |   |
|   Non-utility      property, less accumulated depreciation    ($3,676      in 2008 and $3,681 in 2007)                 |   |   | 1,715 |   |   |   | 1,646 |   |
|   Millstone      decommissioning trust fund                                                                                                |   |   | 5,220 |   |   |   | 5,645 |   |
|   Other                                                                                                                                    |   |   | 6,156 |   |   |   | 7,504 |   |
| Total      investments and other assets                                                                                                              |   |   | 110,730 |   |   |   | 108,247 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Current      assets                                                                                                                                  |   |   |   |   |   |   |   |   |
|   Cash      and cash equivalents                                                                                                           |   |   | 10,728 |   |   |   | 3,803 |   |
|   Restricted      cash                                                                                                                     |   |   | 1 |   |   |   | 62 |   |
|   Special      deposits                                                                                                                    |   |   | 1 |   |   |   | 1,000 |   |
|   Accounts      receivable, less allowance for uncollectible accounts    ($1,766      in 2008 and $1,751 in 2007)      |   |   | 23,503 |   |   |   | 24,086 |   |
|   Accounts      receivable - affiliates, less allowance for uncollectible      accounts    ($48      in 2008 and 2007) |   |   | 357 |   |   |   | 254 |   |
|   Unbilled      revenues                                                                                                                   |   |   | 15,688 |   |   |   | 17,665 |   |
|   Materials      and supplies, at average cost                                                                                             |   |   | 5,609 |   |   |   | 5,461 |   |
|   Prepayments                                                                                                                              |   |   | 8,069 |   |   |   | 8,942 |   |
|   Deferred      income taxes                                                                                                               |   |   | 1,975 |   |   |   | 3,638 |   |
|   Power-related      derivatives                                                                                                           |   |   | 4,445 |   |   |   | 707 |   |
|   Other      current assets                                                                                                                |   |   | 1,049 |   |   |   | 1,081 |   |
|   Total current      assets                                                                                                                |   |   | 71,425 |   |   |   | 66,699 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Deferred      charges and other assets                                                                                                               |   |   |   |   |   |   |   |   |
|   Regulatory      assets                                                                                                                   |   |   | 29,354 |   |   |   | 31,988 |   |
|   Other      deferred charges - regulatory                                                                                                 |   |   | 8,069 |   |   |   | 8,988 |   |
|   Other      deferred charges and other assets                                                                                             |   |   | 5,302 |   |   |   | 4,124 |   |
|   Power-related      derivatives                                                                                                           |   |   | 929 |   |   |   | - |   |
| Total      deferred charges and other assets                                                                                                         |   |   | 43,654 |   |   |   | 45,100 |   |
|                                                                                                                                                 |   |   |   |   |   |   |   |   |
| TOTAL      ASSETS                                                                                                                                    |   | $ | 559,007 |   |   | $ | 540,314 |   |

----

| CENTRAL      VERMONT PUBLIC SERVICE CORPORATION                                                                                                                                                                                                                                  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                       |   |
| (dollars      in thousands, except share data)                                                                                                                                                                                                                                   |   |
| (unaudited)                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                             |   | September      30, 2008 |   |   | December      31, 2007 |   |
| CAPITALIZATION      AND LIABILITIES                                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Capitalization                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |
|   Common      stock, $6 par value, 19,000,000 shares authorized,    12,549,552 issued      and 10,358,703 outstanding at September 30, 2008 and    12,474,687      issued and 10,244,559 outstanding at December 31, 2007 |   | $ | 75,297 |   |   | $ | 74,848 |   |
|   Other      paid-in capital                                                                                                                                                                                                                                           |   |   | 57,396 |   |   |   | 56,324 |   |
|   Accumulated      other comprehensive loss                                                                                                                                                                                                                            |   |   | (363 | ) |   |   | (378 | ) |
|   Treasury      stock, at cost, 2,190,849 shares at September 30, 2008 and    2,230,128      shares at December 31, 2007                                                                                                                           |   |   | (49,841 | ) |   |   | (50,734 | ) |
|   Retained      earnings                                                                                                                                                                                                                                               |   |   | 115,310 |   |   |   | 108,747 |   |
| Total      common stock equity                                                                                                                                                                                                                                                   |   |   | 197,799 |   |   |   | 188,807 |   |
|   Preferred      and preference stock not subject to mandatory redemption                                                                                                                                                                                              |   |   | 8,054 |   |   |   | 8,054 |   |
|   Preferred      stock subject to mandatory redemption                                                                                                                                                                                                                 |   |   | 1,000 |   |   |   | 2,000 |   |
|   Long-term      debt                                                                                                                                                                                                                                                  |   |   | 175,350 |   |   |   | 112,950 |   |
|   Capital      lease obligations                                                                                                                                                                                                                                       |   |   | 5,206 |   |   |   | 5,889 |   |
| Total      capitalization                                                                                                                                                                                                                                                        |   |   | 387,409 |   |   |   | 317,700 |   |
|                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Current      liabilities                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|   Current      portion of preferred stock subject to mandatory redemption                                                                                                                                                                                              |   |   | 1,000 |   |   |   | 1,000 |   |
|   Current      portion of long-term debt                                                                                                                                                                                                                               |   |   | 3,000 |   |   |   | 3,000 |   |
|   Accounts      payable                                                                                                                                                                                                                                                |   |   | 3,881 |   |   |   | 6,253 |   |
|   Accounts      payable - affiliates                                                                                                                                                                                                                                   |   |   | 10,318 |   |   |   | 13,205 |   |
|   Notes      payable                                                                                                                                                                                                                                                   |   |   | 8,400 |   |   |   | 63,800 |   |
|   Dividends      payable                                                                                                                                                                                                                                               |   |   | 2,382 |   |   |   | - |   |
|   Nuclear      decommissioning costs                                                                                                                                                                                                                                   |   |   | 1,834 |   |   |   | 2,309 |   |
|   Power-related      derivatives                                                                                                                                                                                                                                       |   |   | 1,580 |   |   |   | 3,225 |   |
|   Other      current liabilities                                                                                                                                                                                                                                       |   |   | 26,150 |   |   |   | 20,761 |   |
| Total      current liabilities                                                                                                                                                                                                                                                   |   |   | 58,545 |   |   |   | 113,553 |   |
|                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Deferred      credits and other liabilities                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|   Deferred      income taxes                                                                                                                                                                                                                                           |   |   | 40,344 |   |   |   | 33,666 |   |
|   Deferred      investment tax credits                                                                                                                                                                                                                                 |   |   | 3,056 |   |   |   | 3,341 |   |
|   Nuclear      decommissioning costs                                                                                                                                                                                                                                   |   |   | 8,383 |   |   |   | 9,580 |   |
|   Asset      retirement obligations                                                                                                                                                                                                                                    |   |   | 3,346 |   |   |   | 3,200 |   |
|   Accrued      pension and benefit obligations                                                                                                                                                                                                                         |   |   | 16,576 |   |   |   | 19,874 |   |
|   Power-related      derivatives                                                                                                                                                                                                                                       |   |   | 4,787 |   |   |   | 4,592 |   |
|   Other      deferred credits - regulatory                                                                                                                                                                                                                             |   |   | 12,237 |   |   |   | 9,395 |   |
|   Other      deferred credits and other liabilities                                                                                                                                                                                                                    |   |   | 24,324 |   |   |   | 25,413 |   |
| Total      deferred credits and other liabilities                                                                                                                                                                                                                                |   |   | 113,053 |   |   |   | 109,061 |   |
|                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| TOTAL      CAPITALIZATION AND LIABILITIES                                                                                                                                                                                                                                        |   | $ | 559,007 |   |   | $ | 540,314 |   |

----

| CENTRAL      VERMONT PUBLIC SERVICE CORPORATION                                                                                |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                           |   |
| (dollars      in thousands)(unaudited)                                                                                         |   |
|                       |   | Nine      months ended September 30 |   |
| Cash      flows provided (used) by:                                                                                            |   | 2008 |   |   | 2007 |   |
| OPERATING      ACTIVITIES                                                                                                      |   |   |   |   |   |   |
| Net      income                                                                                                                |   | $ | 16,390 |   |   | $ | 10,548 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:                                    |   |   |   |   |   |   |   |   |
| Equity      in earnings of affiliates                                                                                          |   |   | (12,242 | ) |   |   | (4,812 | ) |
| Distributions      received from affiliates                                                                                    |   |   | 8,174 |   |   |   | 3,734 |   |
| Depreciation                                                                                                                   |   |   | 11,704 |   |   |   | 11,349 |   |
| Deferred      income taxes and investment tax credits                                                                          |   |   | 7,680 |   |   |   | (223 | ) |
| Non-cash      employee benefit plan costs                                                                                      |   |   | 4,065 |   |   |   | 5,396 |   |
| Regulatory      and other amortization, net                                                                                    |   |   | (1,428 | ) |   |   | (3,604 | ) |
| Other      non-cash expense, net                                                                                               |   |   | 3,914 |   |   |   | 2,655 |   |
| Changes      in assets and liabilities:                                                                                        |   |   |   |   |   |   |   |   |
| Decrease      in accounts receivable and unbilled revenues                                                                     |   |   | 758 |   |   |   | 2,548 |   |
| Decrease      in accounts payable                                                                                              |   |   | (4,488 | ) |   |   | (4,929 | ) |
| Decrease      in accrued income taxes                                                                                          |   |   | (1,808 | ) |   |   | 0 |   |
| Decrease      in other current assets                                                                                          |   |   | 3,531 |   |   |   | 1,566 |   |
| Decrease      in special deposits and restricted cash for power    collateral                                                  |   |   | 61 |   |   |   | 3,519 |   |
| Employee      benefit plan funding                                                                                             |   |   | (7,701 | ) |   |   | (8,557 | ) |
| Increase      in other current liabilities                                                                                     |   |   | 4,579 |   |   |   | 2,347 |   |
| Other      non-current assets and liabilities and other                                                                        |   |   | (396 | ) |   |   | (315 | ) |
| Net      cash provided by operating activities                                                                                 |   |   | 32,793 |   |   |   | 21,222 |   |
| INVESTING      ACTIVITIES                                                                                                      |   |   |   |   |   |   |   |   |
| Construction      and plant expenditures                                                                                       |   |   | (25,687 | ) |   |   | (16,654 | ) |
| Investments      in available-for-sale securities                                                                              |   |   | (969 | ) |   |   | (1,410 | ) |
| Proceeds      from sale of available-for-sale securities                                                                       |   |   | 763 |   |   |   | 1,355 |   |
| Return      of capital from investments in affiliates                                                                          |   |   | 96 |   |   |   | 0 |   |
| Other      investments and capital expenditures                                                                                |   |   | (230 | ) |   |   | 165 |   |
| Net      cash used for investing activities                                                                                    |   |   | (26,027 | ) |   |   | (16,544 | ) |
| FINANCING      ACTIVITIES                                                                                                      |   |   |   |   |   |   |   |   |
| Proceeds      from issuance of common stock                                                                                    |   |   | 1,817 |   |   |   | 1,313 |   |
| Common      and preferred dividends paid                                                                                       |   |   | (7,393 | ) |   |   | (7,294 | ) |
| Proceeds      from issuance of first mortgage bonds                                                                            |   |   | 60,000 |   |   |   | 0 |   |
| Repayment      of notes payable                                                                                                |   |   | (53,000 | ) |   |   | 0 |   |
| Debt      issuance and deferred common stock offering costs                                                                    |   |   | (883 | ) |   |   | 0 |   |
| Proceeds      from borrowings under revolving credit facility                                                                  |   |   | 9,300 |   |   |   | 30,100 |   |
| Repayments      under revolving credit facility                                                                                |   |   | (9,300 | ) |   |   | (27,675 | ) |
| Retirement      of preferred stock subject to mandatory redemption                                                             |   |   | (1,000 | ) |   |   | (1,000 | ) |
| Decrease      in special deposits held for preferred stock redemptions                                                         |   |   | 1,000 |   |   |   | 1,000 |   |
| Proceeds      from letter of credit                                                                                            |   |   | 2,400 |   |   |   | 0 |   |
| Payments      for unremarketed revenue bonds                                                                                   |   |   | (2,400 | ) |   |   | 0 |   |
| Other                                                                                                                          |   |   | (382 | ) |   |   | (367 | ) |
| Net      cash provided by (used for) financing activities                                                                      |   |   | 159 |   |   |   | (3,923 | ) |
| Net      increase in cash and cash equivalents                                                                                 |   |   | 6,925 |   |   |   | 755 |   |
| Cash      and cash equivalents at beginning of the period                                                                      |   |   | 3,803 |   |   |   | 2,799 |   |
| Cash      and cash equivalents at end of the period                                                                            |   | $ | 10,728 |   |   | $ | 3,554 |   |

----

| CENTRAL      VERMONT PUBLIC SERVICE CORPORATION                                                       |   |
|-------------------------------------------------------------------------------------------------------|--------|
| CONDENSED      CONSOLIDATED STATEMENT OF CHANGES IN COMMON STOCK EQUITY                               |   |
| (in      thousands, except share data)                                                                |   |
| (unaudited)                                                                                           |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                  |   | Common      Stock |   |   |   |   |   | Accumulated |   |   | Treasury      Stock |   |   |   |   |   |   |   |
|                                                                                                  |   |   |   |   |   |   | Other |   |   | Other |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                  | Shares |   |   |   |   |   | Paid-in |   |   | Comprehensive |   |   |   |   |   |   |   |   | Retained |   |   |   |   |
|                                                                                                  | Issued |   |   | Amount |   |   | Capital |   |   | Loss |   |   | Shares |   |   | Amount |   |   | Earnings |   |   | Total |   |
| Balance,      December 31, 2007                                                                       |   |   | 12,474,687 |   |   | $ | 74,848 |   |   | $ | 56,324 |   |   | $ | (378 | ) |   |   | 2,230,128 |   |   | $ | (50,734 | ) |   | $ | 108,747 |   |   | $ | 188,807 |   |
| Adjust      to initially apply SFAS 158         measurement provision,      net of tax |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4 |   |   |   |   |   |   |   |   |   |   |   | (50 | ) |   |   | (46 | ) |
| Net      income                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 16,390 |   |   |   | 16,390 |   |
| Other      comprehensive income                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 11 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 11 |   |
| Dividend      reinvestment plan                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (39,279 | ) |   |   | 893 |   |   |   |   |   |   |   | 893 |   |
| Stock      options exercised                                                                          |   |   | 58,000 |   |   |   | 348 |   |   |   | 772 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,120 |   |
| Share-based      compensation                                                                         |   |   | 16,865 |   |   |   | 101 |   |   |   | 241 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 342 |   |
| Dividends      declared on common and        preferred stock                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (9,774 | ) |   |   | (9,774 | ) |
| Amortization      of preferred stock         issuance expense                               |   |   |   |   |   |   |   |   |   |   | 12 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 12 |   |
| Gain      (loss) on capital stock                                                                     |   |   |   |   |   |   |   |   |   |   | 47 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3 | ) |   |   | 44 |   |
| Balance,      September 30, 2008                                                                      |   |   | 12,549,552 |   |   | $ | 75,297 |   |   | $ | 57,396 |   |   | $ | (363 | ) |   |   | 2,190,849 |   |   | $ | (49,841 | ) |   | $ | 115,310 |   |   | $ | 197,799 |   |

----

----

----

----

|                                                             |   | Three      months ended September 30 |       |   | Nine      months ended September 30 |   |
|------------------------------------------------------------------|--------|--------------------------------------|------------|--------|-------------------------------------|--------|
|                                                             |   | 2008                                 |       |   | 2007                                |   |   | 2008 |   |   | 2007 |   |
| Numerator for basic      and diluted EPS:                        |   |                                 |       |   |                                |   |   |   |   |   |   |   |
| Net      income                                                  |   | $                                    | 6,481      |   |                                | $      | 4,321 |   |   | $ | 16,390 |   |   | $ | 10,548 |   |
| Dividends      declared on preferred stock                       |   |                                 | 92         |   |                                |   | 92 |   |   |   | 276 |   |   |   | 276 |   |
| Net      income available for common stock                       |   | $                                    | 6,389      |   |                                | $      | 4,229 |   |   | $ | 16,114 |   |   | $ | 10,272 |   |
|                                                             |   |                                 |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Denominators for basic      and diluted EPS:                     |   |                                 |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average      basic shares of common stock outstanding   |   |                                 | 10,352,262 |   |                                |   | 10,197,869 |   |   |   | 10,321,998 |   |   |   | 10,173,647 |   |
|    Dilutive      effect of stock options          |   |                                 | 51,445     |   |                                |   | 166,309 |   |   |   | 62,872 |   |   |   | 150,948 |   |
|    Dilutive      effect of performance shares     |   |                                 | 18,436     |   |                                |   | 16,569 |   |   |   | 14,192 |   |   |   | 12,631 |   |
| Weighted-average      diluted shares of common stock outstanding |   |                                 | 10,422,143 |   |                                |   | 10,380,747 |   |   |   | 10,399,062 |   |   |   | 10,337,226 |   |

|                                                     |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|----------------------------------------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                                                     |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |
|                                                     |   |                                 |   |   |                                |   |   |   |   |   |   |   |
| Operating      revenues                                  |   | $                                    | 18,632 |   |                                | $      | 12,100 |   |   | $ | 55,105 |   |   | $ | 37,197 |   |
| Operating      income                                    |   | $                                    | 9,087  |   |                                | $      | 5,451 |   |   | $ | 26,769 |   |   | $ | 15,943 |   |
|                                                     |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Net      income before non-controlling interest          |   | $                                    | 8,237  |   |                                | $      | 3,080 |   |   | $ | 24,905 |   |   | $ | 9,341 |   |
| Less      members non-controlling interest in net income |   |                                 | 7,629  |   |                                |   | 2,373 |   |   |   | 22,885 |   |   |   | 7,098 |   |
| Net      income                                          |   | $                                    | 608    |   |                                | $      | 707 |   |   | $ | 2,020 |   |   | $ | 2,243 |   |
|                                                     |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Ownership      interest                                  |   |                                 | 47.05  | %      |                                |   | 47.05 | % |   |   | 47.05 | % |   |   | 47.05 | % |
| Equity      in net income                                |   | $                                    | 300    |   |                                | $      | 293 |   |   | $ | 946 |   |   | $ | 1,076 |   |

|                      |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|---------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                      |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |
|                      |   |                                 |   |   |                                |   |   |   |   |   |   |   |
| Operating      revenues   |   | $                                    | 18,517 |   |                                | $      | 11,995 |   |   | $ | 54,737 |   |   | $ | 36,880 |   |
| Operating      income     |   | $                                    | 9,556  |   |                                | $      | 5,876 |   |   | $ | 28,136 |   |   | $ | 17,163 |   |
| Net      income           |   | $                                    | 8,787  |   |                                | $      | 3,488 |   |   | $ | 26,321 |   |   | $ | 10,388 |   |
|                      |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Ownership      interest   |   |                                 | 39.79  | %      |                                |   | 29.86 | % |   |   | 39.79 | % |   |   | 29.86 | % |
| Equity      in net income |   | $                                    | 3,702  |   |                                | $      | 1,110 |   |   | $ | 11,109 |   |   | $ | 3,353 |   |

----

|                         |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|------------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                         |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |
|                         |   |                                 |   |   |                                |   |   |   |   |   |   |   |
| Operating      revenues      |   | $                                    | 41,497 |   |                                | $      | 38,413 |   |   | $ | 132,291 |   |   | $ | 114,705 |   |
| Operating      (loss) income |   | $                                    | (41    | )      |                                | $      | 688 |   |   | $ | (39 | ) |   | $ | 2,520 |   |
| Net      income              |   | $                                    | 60     |   |                                | $      | 188 |   |   | $ | 294 |   |   | $ | 606 |   |
|                         |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Ownership      interest      |   |                                 | 58.85  | %      |                                |   | 58.85 | % |   |   | 58.85 | % |   |   | 58.85 | % |
| Equity      in net income    |   | $                                    | 35     |   |                                | $      | 110 |   |   | $ | 173 |   |   | $ | 356 |   |

----

----

|                                                     |   | September      30, 2008 |   |   | December      31, 2007 |   |
|----------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
| Regulatory      assets                                   |   |                    |   |   |                   |   |
| Pension      and postretirement medical costs - SFAS 158 |   | $                       | 13,993 |   |                   | $      | 14,673 |   |
| Nuclear      plant dismantling costs                     |   |                    | 10,216 |   |                   |   | 11,889 |   |
| Nuclear      refueling outage costs - Millstone Unit #3  |   |                    | 0      |   |                   |   | 820 |   |
| Income      taxes                                        |   |                    | 4,052  |   |                   |   | 3,757 |   |
| Asset      retirement obligations and other              |   |                    | 1,093  |   |                   |   | 849 |   |
| Total      Regulatory assets                             |   |                    | 29,354 |   |                   |   | 31,988 |   |
|                                                     |   |                    |   |   |                   |   |   |   |
| Other deferred charges      - regulatory                 |   |                    |   |   |                   |   |   |   |
| Vermont      Yankee sale costs (tax)                     |   |                    | 673    |   |                   |   | 673 |   |
| Unrealized      losses on power-related derivatives      |   |                    | 6,367  |   |                   |   | 7,817 |   |
| Other                                                    |   |                    | 1,029  |   |                   |   | 498 |   |
| Total Other      deferred charges - regulatory      |   |                    | 8,069  |   |                   |   | 8,988 |   |
|                                                     |   |                    |   |   |                   |   |   |   |
| Other deferred credits      - regulatory                 |   |                    |   |   |                   |   |   |   |
| Asset      retirement obligation - Millstone Unit #3     |   |                    | 2,550  |   |                   |   | 3,085 |   |
| Vermont      Yankee related deferrals                    |   |                    | 941    |   |                   |   | 1,596 |   |
| Emission      allowances and renewable energy credits    |   |                    | 385    |   |                   |   | 616 |   |
| Unrealized      gains on power-related derivatives       |   |                    | 5,346  |   |                   |   | 707 |   |
| Environmental      remediation                           |   |                    | 1,231  |   |                   |   | 1,834 |   |
| Other                                                    |   |                    | 1,784  |   |                   |   | 1,557 |   |
| Total Other      deferred credits - regulatory      |   | $                       | 12,237 |   |                   | $      | 9,395 |   |

----

----

|                                                                     |   | Fair      Value as of September 30, 2008 |   |
|--------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                     |   | Level      1                             |   |   | Level      2 |   |   | Level      3 |   |   | Total |   |
| Assets:                                                                  |   |                                     |   |   |   |   |   |   |   |   |   |   |
|      Millstone      decommissioning trust fund  |   | $                                        | 0      |   |   | $ | 5,220 |   |   | $ | 0 |   |   | $ | 5,220 |   |
|      Cash      and cash equivalents             |   |                                     | 8,836  |   |   |   | 0 |   |   |   | 0 |   |   |   | 8,836 |   |
|      Power-related      derivatives - current   |   |                                     | 0      |   |   |   | 0 |   |   |   | 4,445 |   |   |   | 4,445 |   |
|      Power-related      derivatives - long term |   |                                     | 0      |   |   |   | 0 |   |   |   | 929 |   |   |   | 929 |   |
|      Total                                      |   | $                                        | 8,836  |   |   | $ | 5,220 |   |   | $ | 5,374 |   |   | $ | 19,430 |   |
|                                                                     |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                             |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Power-related      derivatives - current   |   | $                                        | 0      |   |   | $ | 0 |   |   | $ | 1,580 |   |   | $ | 1,580 |   |
|      Power-related      derivatives - long term |   |                                     | 0      |   |   |   | 0 |   |   |   | 4,787 |   |   |   | 4,787 |   |
|      Total                                      |   | $                                        | 0      |   |   | $ | 0 |   |   | $ | 6,367 |   |   | $ | 6,367 |   |

|                                                                                                    |   | Three      months ended |    |   | Nine      months ended |   |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|
| Balance      at Beginning of Period                                                                     |   | $                       | (13,905 | )      |                   | $      | (7,110 | ) |
|      Net      realized (losses) gains recognized in Purchased Power -    other |   |                    | (14     | )      |                   |   | 2 |   |
|      Net      unrealized losses included in regulatory liability (asset)       |   |                    | 12,393  |   |                   |   | 4,843 |   |
|      Purchases,      sales, issuances and net settlements                      |   |                    | 533     |   |                   |   | 1,272 |   |
| Balance      at September 30, 2008                                                                      |   | $                       | (993    | )      |                   | $      | (993 | ) |
|                                                                                                    |   |                    |    |   |                   |   |   |   |
| Net      realized (losses) gains relating to instruments still held during the      period              |   | $                       | (15     | )      |                   | $      | 18 |   |

----

|                                                                                |   | September      30, 2008 |    |   | December      31, 2007 |   |
|-------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|
| First      Mortgage Bonds                                                           |   |                    |    |   |                   |   |
|      6.27%,      Series NN, due 2008                       |   | $                       | 3,000   |   |                   | $      | 3,000 |   |
|      5.00%,      Series SS, due 2011                       |   |                    | 20,000  |   |                   |   | 20,000 |   |
|      5.72%,      Series TT, due 2019                       |   |                    | 55,000  |   |                   |   | 55,000 |   |
|      6.90%,      Series OO, due 2023                       |   |                    | 17,500  |   |                   |   | 17,500 |   |
|      6.83%,      Series UU, due 2028                       |   |                    | 60,000  |   |                   |   | 0 |   |
|      8.91%,      Series JJ, due 2031                       |   |                    | 15,000  |   |                   |   | 15,000 |   |
| Revenue      Bonds                                                                  |   |                    |    |   |                   |   |   |   |
|   New      Hampshire Industrial Development Authority Bonds               |   |                    |    |   |                   |   |   |   |
|      3.75%,      due 2009                                  |   |                    | 5,450   |   |                   |   | 5,450 |   |
| Letter      of Credit Draw (5.00% at September 30, 2008)                            |   |                    | 2,400   |   |                   |   | 0 |   |
| Total      long-term debt                                                           |   |                    | 178,350 |   |                   |   | 115,950 |   |
|      Less      current amount payable, due within one year |   |                    | 3,000   |   |                   |   | 3,000 |   |
| Total      long-term debt less current portion                                      |   | $                       | 175,350 |   |                   | $      | 112,950 |   |

----

|                                                                                                               |   | September      30, 2008 |   |   | December      31, 2007 |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
| Revenue      Bonds                                                                                                 |   |                    |   |   |                   |   |
|   Vermont      Industrial Development Authority Bonds                                                    |   |                    |   |   |                   |   |
|     Variable,      due 2013 (5.00 % at September 30, 2008 and 3.05% at December 31,      2007) |   | $                       | 3,400  |   |                   | $      | 5,800 |   |
|   Connecticut      Development Authority Bonds                                                           |   |                    |   |   |                   |   |   |   |
|     Variable,      due 2015 (1.60% at September 30, 2008 and 3.55% at December 31,      2007)  |   |                    | 5,000  |   |                   |   | 5,000 |   |
| Short      term note payable                                                                                       |   |                    |   |   |                   |   |   |   |
|     Variable,      due June 30, 2008 (5.44% at December 31, 2007)                              |   |                    | 0      |   |                   |   | 53,000 |   |
| Total      Notes Payable                                                                                           |   | $                       | 8,400  |   |                   | $      | 63,800 |   |

----

|                                       |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|--------------------------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                                       |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |
| Pension      Benefits                      |   |                                 |   |   |                                |   |   |   |   |   |   |   |
| Service      cost                          |   | $                                    | 823    |   |                                | $      | 888 |   |   | $ | 2,469 |   |   | $ | 2,664 |   |
| Interest      cost                         |   |                                 | 1,523  |   |                                |   | 1,561 |   |   |   | 4,569 |   |   |   | 4,683 |   |
| Expected      return on plan assets        |   |                                 | (1,831 | )      |                                |   | (1,680 | ) |   |   | (5,493 | ) |   |   | (5,040 | ) |
| Amortization      of net actuarial loss    |   |                                 | 0      |   |                                |   | 146 |   |   |   | 0 |   |   |   | 438 |   |
| Amortization      of prior service cost    |   |                                 | 97     |   |                                |   | 100 |   |   |   | 291 |   |   |   | 300 |   |
| Net      periodic benefit cost             |   |                                 | 612    |   |                                |   | 1,015 |   |   |   | 1,836 |   |   |   | 3,045 |   |
| Less      amounts capitalized              |   |                                 | 121    |   |                                |   | 164 |   |   |   | 309 |   |   |   | 516 |   |
| Net      benefit costs expensed            |   | $                                    | 491    |   |                                | $      | 851 |   |   | $ | 1,527 |   |   | $ | 2,529 |   |
|                                       |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Postretirement      Benefits               |   |                                 |   |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Service      cost                          |   | $                                    | 155    |   |                                | $      | 145 |   |   | $ | 465 |   |   | $ | 435 |   |
| Interest      cost                         |   |                                 | 403    |   |                                |   | 377 |   |   |   | 1,209 |   |   |   | 1,131 |   |
| Expected      return on plan assets        |   |                                 | (267   | )      |                                |   | (233 | ) |   |   | (801 | ) |   |   | (699 | ) |
| Amortization      of net actuarial loss    |   |                                 | 263    |   |                                |   | 263 |   |   |   | 789 |   |   |   | 789 |   |
| Amortization      of transition obligation |   |                                 | 64     |   |                                |   | 64 |   |   |   | 192 |   |   |   | 192 |   |
| Net      periodic benefit cost             |   |                                 | 618    |   |                                |   | 616 |   |   |   | 1,854 |   |   |   | 1,848 |   |
| Less      amounts capitalized              |   |                                 | 122    |   |                                |   | 99 |   |   |   | 312 |   |   |   | 313 |   |
| Net      benefit costs expensed            |   | $                                    | 496    |   |                                | $      | 517 |   |   | $ | 1,542 |   |   | $ | 1,535 |   |

----

----

----

----

|                                    |   |   |    |   |      |   |   | Reclassification      & |   |   |         |   |
|-----------------------------------------|--------|--------|---------|--------|-----------|--------|--------|-----------------------------|--------|--------|--------------|--------|
|                                    |   |   |    |   | Other     |   |   | Consolidating               |   |   |         |   |
|                                    |   | CV-VT  |    |   | Companies |   |   | Entries                     |   |   | Consolidated |   |
| Three      Months Ended                 |   |   |    |   |      |   |   |                        |   |   |         |   |
| September 30,      2008                 |   |   |    |   |      |   |   |                        |   |   |         |   |
| Revenues      from external customers   |   | $      | 83,767  |   |      | $      | 448    |                        |   | $      | (448         | )      |   | $ | 83,767 |   |
| Net      income                         |   | $      | 6,417   |   |      | $      | 64     |                        |   | $      | 0            |   |   | $ | 6,481 |   |
| Total      assets at September 30, 2008 |   | $      | 557,215 |   |      | $      | 2,068  |                        |   | $      | (276         | )      |   | $ | 559,007 |   |
|                                    |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| September 30,      2007                 |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| Revenues      from external customers   |   | $      | 79,174  |   |      | $      | 446    |                        |   | $      | (446         | )      |   | $ | 79,174 |   |
| Net      income                         |   | $      | 4,212   |   |      | $      | 109    |                        |   | $      | 0            |   |   | $ | 4,321 |   |
| Total      assets at December 31, 2007  |   | $      | 538,481 |   |      | $      | 2,134  |                        |   | $      | (301         | )      |   | $ | 540,314 |   |
|                                    |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| Nine      Months Ended                  |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| September 30,      2008                 |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| Revenues      from external customers   |   | $      | 259,478 |   |      | $      | 1,314  |                        |   | $      | (1,314       | )      |   | $ | 259,478 |   |
| Net      income                         |   | $      | 16,186  |   |      | $      | 204    |                        |   | $      | 0            |   |   | $ | 16,390 |   |
| Total      assets at September 30, 2008 |   | $      | 557,215 |   |      | $      | 2,068  |                        |   | $      | (276         | )      |   | $ | 559,007 |   |
|                                    |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| September 30,      2007                 |   |   |    |   |      |   |   |                        |   |   |         |   |   |   |   |   |
| Revenues      from external customers   |   | $      | 243,250 |   |      | $      | 1,320  |                        |   | $      | (1,320       | )      |   | $ | 243,250 |   |
| Net      income                         |   | $      | 10,123  |   |      | $      | 425    |                        |   | $      | 0            |   |   | $ | 10,548 |   |
| Total      assets at December 31, 2007  |   | $      | 538,481 |   |      | $      | 2,134  |                        |   | $      | (301         | )      |   | $ | 540,314 |   |

----

| §  | the      actions of regulatory bodies with respect to allowed rates of return,      continued recovery of regulatory assets and the application of alternative      regulation;                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §  | performance      and continued operation of the Vermont Yankee nuclear power      plant;                                                                                                        |
| §  | effects      of and changes in weather and economic conditions;                                                                                                                                 |
| §  | volatility      in wholesale power markets;                                                                                                                                                     |
| §  | our      ability to maintain or improve our current credit  ratings;                                                                                                                            |
| §  | the      operations of ISO-New England;                                                                                                                                                         |
| §  | changes      in the cost or availability of capital;                                                                                                                                            |
| §  | changes      in financial or regulatory accounting principles or policies imposed by      governing bodies;                                                                                     |
| §  | capital      market conditions, including price risk due to marketable securities held      as investments in trust for nuclear decommissioning, pension and      postretirement medical plans; |
| §  | changes      in the levels and timing of capital expenditures, including our      discretionary future investments in Transco;                                                                  |
| §  | our      ability to replace or renegotiate our long-term power supply      contracts;                                                                                                           |
| §  | our      ability to replace a mature workforce and retain qualified, skilled and      experienced personnel; and                                                                                |
| §  | other      presently unknown or unforeseenfactors.                                                                                                                                              |

----

----

----

|                               |   | Payments      Due by Period (dollars in millions) |   |
|------------------------------------|--------|---------------------------------------------------|--------|
|                               |   | Total                                             |   |   | Less      than 1 year (a) |   |   | 1 -      3 years |   |   | 3 -      5 years |   |   | After      5 years |   |
| Long-term      debt                |   | $                                                 | 178.4  |   |   | $ | 3.0 |   |   | $ | 7.9 |   |   | $ | 20.0 |   |   | $ | 147.5 |   |
| Interest      on long-term debt    |   | $                                                 | 166.5  |   |   | $ | 2.8 |   |   | $ | 21.8 |   |   | $ | 20.0 |   |   | $ | 121.9 |   |
| Notes      payable (b)             |   | $                                                 | 8.4    |   |   | $ | 0.0 |   |   | $ | 0.0 |   |   | $ | 0.0 |   |   | $ | 8.4 |   |
| Interest      on notes payable (b) |   | $                                                 | 2.0    |   |   | $ | 0.1 |   |   | $ | 0.7 |   |   | $ | 0.7 |   |   | $ | 0.5 |   |

| (a)   | Includes      remaining obligations for the three-month period October 1, 2008 through      December 31, 2008. |
|-----------------|----------------------------------------------------------------------------------------------------------------|

| (b)   | Includes      the Connecticut Development Authority Bonds due in 2015 and Vermont      Industrial Development Authority Bonds due in 2013.  The bonds      are classified as current (payable within one year) under U.S. GAAP, but      in the table the bonds and related interest are shown as payments due on      the due dates. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | (dollars      in thousands) |    |   | percent |   |
|--------------------------------|--------|-----------------------------|---------|--------|---------|--------|
| Common      stock equity       |   | $                           | 197,799 |   |    |   | 51 | % |
| Preferred      stock           |   |                        | 9,054   |   |    |   | 2 | % |
| Long-term      debt            |   |                        | 175,350 |   |    |   | 46 | % |
| Capital      lease obligations |   |                        | 5,206   |   |    |   | 1 | % |
|                           |   | $                           | 387,409 |   |    |   | 100 | % |

----

----

----

|                                         |   | Three      Months Ended |   |   | Nine      Months Ended |   |
|----------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                                         |   | September      30       |   |   | September      30      |   |
|                                         |   |                    |   |   |                   |   |
| 2007      Earnings per diluted share         |   | $                       | 0.41   |   |                   | $      | 0.99 |   |
| Higher      operating revenues               |   |                    | 0.26   |   |                   |   | 0.92 |   |
| Higher      equity in earnings of affiliates |   |                    | 0.14   |   |                   |   | 0.41 |   |
| Lower      other operating expenses          |   |                    | 0.03   |   |                   |   | 0.01 |   |
| Higher      interest expense                 |   |                    | (0.05  | )      |                   |   | (0.13 | ) |
| Higher      purchased power expense          |   |                    | (0.12  | )      |                   |   | (0.24 | ) |
| Lower      (higher) transmission expense     |   |                    | 0.03   |   |                   |   | (0.24 | ) |
| Other                                        |   |                    | (0.09  | )      |                   |   | (0.17 | ) |
| 2008      Earnings per diluted share         |   | $                       | 0.61   |   |                   | $      | 1.55 |   |

|                           |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|--------------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                           |   | (in      thousands)                  |   |   | mWh      Sales                      |   |   | (in      thousands) |   |   | mWh      Sales |   |
|                           |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|   Retail             |   | $                                    | 33,440 |   |                                | $      | 32,539 |   |   |   | 233,156 |   |   |   | 235,029 |   |   | $ | 103,142 |   |   | $ | 100,988 |   |   |   | 732,285 |   |   |   | 744,723 |   |
|   Commercial         |   |                                 | 28,301 |   |                                |   | 27,765 |   |   |   | 227,650 |   |   |   | 230,809 |   |   |   | 81,151 |   |   |   | 80,528 |   |   |   | 654,148 |   |   |   | 664,618 |   |
|   Industrial         |   |                                 | 8,145  |   |                                |   | 8,275 |   |   |   | 96,802 |   |   |   | 100,557 |   |   |   | 25,640 |   |   |   | 26,834 |   |   |   | 293,589 |   |   |   | 320,396 |   |
|   Other              |   |                                 | 476    |   |                                |   | 474 |   |   |   | 1,602 |   |   |   | 1,603 |   |   |   | 1,408 |   |   |   | 1,386 |   |   |   | 4,751 |   |   |   | 4,710 |   |
|   Total      Retail  |   |                                 | 70,362 |   |                                |   | 69,053 |   |   |   | 559,210 |   |   |   | 567,998 |   |   |   | 211,341 |   |   |   | 209,736 |   |   |   | 1,684,773 |   |   |   | 1,734,447 |   |
| Resale      Sales              |   |                                 | 10,751 |   |                                |   | 8,030 |   |   |   | 167,990 |   |   |   | 148,246 |   |   |   | 40,430 |   |   |   | 27,681 |   |   |   | 603,782 |   |   |   | 508,525 |   |
| Provision      for Rate Refund |   |                                 | 0      |   |                                |   | (187 | ) |   |   | 0 |   |   |   | 0 |   |   |   | (62 | ) |   |   | (560 | ) |   |   | 0 |   |   |   | 0 |   |
| Other      Operating Revenues  |   |                                 | 2,654  |   |                                |   | 2,278 |   |   |   | 0 |   |   |   | 0 |   |   |   | 7,769 |   |   |   | 6,393 |   |   |   | 0 |   |   |   | 0 |   |
| Operating      Revenues        |   | $                                    | 83,767 |   |                                | $      | 79,174 |   |   |   | 727,200 |   |   |   | 716,244 |   |   | $ | 259,478 |   |   | $ | 243,250 |   |   |   | 2,288,555 |   |   |   | 2,242,972 |   |

| §  | Retail      revenues increased $1.3 million in the third quarter and $1.6 million in      the first nine months due to higher average retail rates, largely offset      by lower sales volume.  This included: 1) an increase of $1.6      million in the third quarter and $4.2 million in the first nine months due      to a 2.30 percent rate increase effective February 1, 2008; 2) an increase      of $0.7 million in the third quarter and $2.6 million in the first nine      months as a result of a higher average unit price due to customer usage      mix; and 3) a decrease of $1 million in the third quarter and $5.2 million      in the first nine months due to a 1.6 percent and 2.9 percent decrease in      sales volume for the respective periods.  The volume decrease      reflects lower average usage resulting from milder weather primarily in      the third quarter and a slowing economy and energy conservation, including      the effect of the loss of several large customers due to plant      closures.  Our business follows the economic cycles of the      customers we serve.  Economic downturns typically lead to      reductions in energy consumption and increased conservation      measures.  Another result can be an increase in uncollectible      accounts receivable as describedbelow. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| §  | Resale      sales revenues increased $2.7 million in the third quarter, including $1.8      million due to higher average prices with the remainder primarily due to      increased volume.  Resale sales increased $12.7 million in the      first nine months, including approximately $7.9 million due to higher      average prices with the remainder primarily due to increased      volume.  Resale sales were made at higher average prices in 2008      compared to 2007 due to more favorable prices on contract sales and      overall higher market prices in ISO-New England.  The contract      sales relate to forward sales that we entered into in 2007 to reduce price      volatility of forecasted excess power.  Other resale sales are      primarily related to sales to ISO-New England to balance load      requirements.  The revenue generated from resale sales is highly      dependent on wholesale market prices, which have been      volatile.  Additionally, we had more power available for resale      in 2008 compared to 2007 due to decreased retail sales volume and      increased output from a number of our power supply sources including      Vermont Yankee, Independent Power Producers and our owned and joint-owned      generating units.  Also see Power Supply Matters below for a      discussion of power supply management. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §  | The      provision for rate refund, which is a reduction in operating revenues, is      related to amounts that were included in retail rates in 2007 and January      2008 that were to be refunded to customers.  The provision for      refund ended with new retail rates effective February 1, 2008 that include      the customer refund.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| §  | Other      operating revenues increased $0.4 million in the third quarter and $1.4      million in the first nine months resulting from sales of additional      transmission capacity from our share of Phase I/II transmission facility      rights, higher rates under our transmission tariffs and a $0.2 million      favorable true-up under the tariffs in the second quarter of      2008.  We began selling transmission capacity in April 2007, and      we have the ability to restrict the amount of capacity assigned to the      purchasers based on certain conditions.  Revenue from these      sales amounted to approximately $1.4 million in calendar year 2007, and is      estimated to be approximately $1.8 million annually from 2008 through      2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|                                                      |   | Three      months ended September 30 |   |   | Nine      months ended September 30 |   |
|-----------------------------------------------------------|--------|--------------------------------------|--------|--------|-------------------------------------|--------|
|                                                      |   | (in      thousands)                  |   |   | mWh                                 |   |   | (in      thousands) |   |   | mWh |   |
|                                                      |   | 2008                                 |   |   | 2007                                |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| VYNPC      (a)                                            |   | $                                    | 14,452 |   |                                | $      | 13,158 |   |   |   | 353,266 |   |   |   | 317,974 |   |   | $ | 46,073 |   |   | $ | 39,728 |   |   |   | 1,124,187 |   |   |   | 971,685 |   |
| Hydro-Quebec                                              |   |                                 | 15,946 |   |                                |   | 16,185 |   |   |   | 235,896 |   |   |   | 249,568 |   |   |   | 47,583 |   |   |   | 48,841 |   |   |   | 699,590 |   |   |   | 758,051 |   |
| Independent      Power Producers                          |   |                                 | 5,320  |   |                                |   | 3,696 |   |   |   | 44,211 |   |   |   | 30,948 |   |   |   | 20,361 |   |   |   | 16,050 |   |   |   | 155,443 |   |   |   | 124,748 |   |
|     Subtotal      long-term contracts |   |                                 | 35,718 |   |                                |   | 33,039 |   |   |   | 633,373 |   |   |   | 598,490 |   |   |   | 114,017 |   |   |   | 104,619 |   |   |   | 1,979,220 |   |   |   | 1,854,484 |   |
| Other      purchases                                      |   |                                 | 4,131  |   |                                |   | 4,854 |   |   |   | 30,003 |   |   |   | 77,007 |   |   |   | 8,867 |   |   |   | 14,698 |   |   |   | 69,101 |   |   |   | 207,252 |   |
| SFAS      5 Loss amortizations                            |   |                                 | (299   | )      |                                |   | (299 | ) |   |   | 0 |   |   |   | 0 |   |   |   | (897 | ) |   |   | (897 | ) |   |   | 0 |   |   |   | 0 |   |
| Nuclear      decommissioning                              |   |                                 | 557    |   |                                |   | 611 |   |   |   | 0 |   |   |   | 0 |   |   |   | 1,674 |   |   |   | 1,996 |   |   |   | 0 |   |   |   | 0 |   |
| Other                                                     |   |                                 | 24     |   |                                |   | (152 | ) |   |   | 0 |   |   |   | 0 |   |   |   | 658 |   |   |   | (284 | ) |   |   | 0 |   |   |   | 0 |   |
| Total      purchased power                                |   | $                                    | 40,131 |   |                                | $      | 38,053 |   |   |   | 663,376 |   |   |   | 675,497 |   |   | $ | 124,319 |   |   | $ | 120,132 |   |   |   | 2,048,321 |   |   |   | 2,061,736 |   |

----

| §  | Purchases      under long-term contracts increased $2.7 million in the third quarter and      $9.4 million in the first nine months compared to the same periods in      2007.  The increases for both periods resulted from purchases of      our share of Vermont Yankee plant output.  In 2008, the plant      operated at nearly full capacity with the exception of reduced production      levels, or derates, for a few incidents during the period.  In      2007, the plant had a scheduled refueling outage in the second quarter and      a derate and unplanned outage in the third quarter.  Higher      output from Independent Power Producers, most of which are hydro      facilities, was another source of increased purchased power during both      the third quarter and the first nine months of 2008.  These      increases were partially offset by fewer scheduled deliveries from      Hydro-Quebec because the annual load factor under the contract decreased      from 80 percent to 75 percent beginning November 1, 2007.  Also      see Power Supply Matters for a discussion of power supply      management. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §  | Other      purchases decreased $0.7 million in the third quarter and $5.8 million in      the first nine months largely from replacement power purchases during      Vermont Yankee outages and derates as described above.  We also      had fewer short-term purchases in 2008 compared to 2007 because of      decreased retail load and increased power available from power supply      sources including our owned generation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| §  | Nuclear      decommissioning costs are associated with our ownership interests in Maine      Yankee, Connecticut Yankee and Yankee Atomic.  These costs are      based on FERC-approved tariffs.  The costs decreased in both      periods largely due to lower revenue requirements for Connecticut      Yankee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| §  | Other      costs include net accounting deferrals and amortizations for Millstone      Unit #3 scheduled refueling outages, and Vermont Yankee-related      deferrals.  These deferrals and amortizations are based on      PSB-approved regulatory accounting.  The increases in both      periods largely resulted from deferred costs in the second quarter of 2007      for a scheduled refueling outage at Millstone Unit #3 versus amortizations      in 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

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|                                                                                        |   | Forward   |   |   | Forward   |   |   |             |   |   |   |   |
|---------------------------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|--------|------------------|--------|--------|--------|--------|
|                                                                                        |   | Sales     |   |   | Purchase  |   |   | Hydro-Quebec     |   |   |   |   |
|                                                                                        |   | Contracts |   |   | Contracts |   |   | Sellback      #3 |   |   | Total  |   |
| Total      fair value at December 31, 2007 - unrealized loss                                |   | $         | (2,037 | )      |      | $      | (481   | )                |   | $      | (4,592 | )      |   | $ | (7,110 | ) |
| Plus      new contracts entered into during the period                                      |   |      | (574   | )      |      |   | 35     |             |   |   | 0      |   |   |   | (539 | ) |
| Less      amounts settled during the period                                                 |   |      | 8,174  |   |      |   | (35    | )                |   |   | 0      |   |   |   | 8,139 |   |
| Change      in fair value during the period                                                 |   |      | (1,173 | )      |      |   | (227   | )                |   |   | (83    | )      |   |   | (1,483 | ) |
| Total      fair value at September 30, 2008 - unrealized (loss) gain,    net                |   | $         | 4,390  |   |      | $      | (708   | )                |   | $      | (4,675 | )      |   | $ | (993 | ) |
|                                                                                        |   |      |   |   |      |   |   |             |   |   |   |   |   |   |   |   |
| Estimated      fair value at September 30, 2008 for changes in projected market      price: |   |      |   |   |      |   |   |             |   |   |   |   |   |   |   |   |
|    10      percent increase                                                  |   | $         | 212    |   |      | $      | (188   | )                |   | $      | (9,361 | )      |   | $ | (9,337 | ) |
|    10      percent decrease                                                  |   | $         | 8,592  |   |      | $      | (1,228 | )                |   | $      | (1,778 | )      |   | $ | 5,586 |   |

----

----

| PART      II - OTHER INFORMATION  |
|----------------------------------------|
| Item      1.                           | Legal      Proceedings. The      company is involved in legal and administrative proceedings in the normal      course of business and does not believe that the ultimate outcome of these      proceedings will have a material adverse effect on its financial position      or results of operations.  |
| Item      1A.                          | Risk      Factors. In      addition to the other information set forth in this report, you should      carefully consider the factors discussed in Part I "Item 1A. Risk      Factors", in our Annual Report on Form 10-K for the year ended December      31, 2007, which could materially affect our business, financial condition      or future results. The risks described in our 2007 Annual Report on Form      10-K are not the only risks facing our company.  Additional risks and      uncertainties not currently known to us or that we currently deem to be      immaterial also may materially adversely affect our business, financial      condition and/or operating results. At September 30, 2008, we have updated      the risk factors in our 2007 Annual Report on Form 10-K as described      below. Our      business is affected by local, national and worldwide economic      conditions.  If the current financial crisis intensifies or is      sustained for a protracted period of time, potential disruptions in the      capital and credit markets may adversely affect our      business.  Possible effects include the availability and      cost of short-term funds for liquidity requirements; the availability and      cost of long-term capital to fund our asset management plan and future      investments in Transco; additional funding requirements for our pension      trust due to declines in asset values to fund the pension liabilities; and      the performance of the assets in our Rabbi Trust and decommissioning trust      funds. Our      access to funds under a revolving credit facility is dependent on the      ability of the counterparty bank to meet the funding      commitments.  The counterparty bank may not be able to meet the      funding commitments if it experiences shortages of capital and liquidity      or excessive volumes of borrowing requests from other borrowers within a      short period of time. Longer-term      disruptions in the capital markets as a result of economic uncertainty,      changes in regulation, reduced financing alternatives, or failures of      significant financial institutions could adversely affect our access to      the funds needed to operate our business.  Such prolonged      disruptions could require us to take measures to conserve cash until the      markets stabilize.  In addition, if our ability to access      capital becomes significantly constrained, our interest costs will likely      increase and our financial condition could be harmed, and future results      of operations could be adversely affected. The credit      markets can impact our business Due to market      developments, including a series of rating agency downgrades of subprime      U.S. mortgage-backed securities, the fair values of subprime-related      investments have declined.  This decline in fair value has      become especially problematic for certain large financial institutions,      some of which have recently been acquired by other institutions, sought      bankruptcy protection, or have been downgraded by rating      agencies.  We have an unsecured revolving credit facility. We      have multiple interest rate and term options under this      facility.  Interest rate options are based on LIBOR, Prime or      Federal Funds rates, plus varying spreads.  The interest rate at      which we borrow under this revolving credit facility is subject to change      based upon the term we choose and volatility in the base interest      rate.  Sustained turbulence in the U.S. credit markets could      limit or delay our future access to capital at reasonable      terms.  |

----

| Item      6. | Exhibits.  |
|--------------|-----------------|
|         | (a)             | List      of Exhibits  |   |
|         | 31.1            | Certification      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.  |   |
|         | 31.2            | Certification      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.  |   |
|         | 32.1            | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  |   |
|         | 32.2            | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |   |

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| SIGNATURES      Pursuant      to the requirements of the Securities Exchange Act of 1934, the registrant      has duly caused this report to be signed on its behalf by the undersigned      thereunto duly authorized. |
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|   | CENTRAL      VERMONT PUBLIC SERVICE CORPORATION                                                                                                                                                                                                                                                                                                                                                                    |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (Registrant)                                                                                                                                                                                                                                                                                                                                                                                                  |
| By     |  /s/ Pamela J.      Keefe                                                               |
|   | Pamela      J. KeefeVice      President, Chief Financial Officer, and  Treasurer                                                                                                                                                                                                                                                                                                                                   |

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