EXHIBIT 99 (2)


                      NIAGARA MOHAWK REPORTS 1998 EARNINGS
                       DECLARES PREFERRED STOCK DIVIDENDS



     SYRACUSE,  January  28  -  Niagara  Mohawk  Power  Corp.  (NYSE: NMK) today
announced  financial results for 1998, concluding a year of notable achievements
that  returned  the  company  to  financial  stability, but required significant
non-cash  charges  to  earnings.  The  company  reported  a  1998 loss of $157.4
million,  or  a  loss of 95 cents per share, compared to 1997 earnings of $145.9
million,  or  $1.01  per  share.  The company also reported that, at a regularly
scheduled meeting today, its Board of Directors declared dividends at prescribed
rates  for  all  series  of  preferred  stock.

     In a year of important achievements for the company, the most important was
the  closing  of the Master Restructuring Agreement (MRA) with independent power
producers  (IPPs) in June.  The MRA allowed the company to terminate, restate or
amend  contracts which represented about 75 percent of the company's over-market
purchase  power  obligations.  In  return,  the IPPs received approximately $3.9
billion  in  cash  and  20.5  million  shares  of  common stock.  As part of its
POWERCHOICE  agreement,  Niagara Mohawk will recover the cost of the MRA over 10
years.  The  company  established  a regulatory asset to reflect the cost of the
MRA,  and  will  amortize  it  as a non-cash charge to earnings over the 10-year
recovery  period.  Additionally,  in  approving POWERCHOICE, the New York Public
Service Commission limited the value of the MRA regulatory asset, which resulted
in a one-time non-cash charge to earnings of $263.2 million, or $1.03 per share,
in  1998.  The  amortization of the MRA regulatory asset in 1998 further reduced
earnings  by  $128.8 million, or 50 cents per share.  Earnings in 1998 were also
lower  because  of the dilution caused by the issuance of 42.9 million shares of
common  stock  in  connection  with  the  MRA.

     Although  earnings  were  depressed  as  a  result  of the non-cash charges
related  to the MRA, the company's cash flow improved in 1998.  Payments to IPPs
were  reduced  by  $225.9  million  in  1998,  compared  to 1997, while fuel for
electric  generation  increased  $60.5  million, and interest charges, primarily
related  to the debt issued in connection with the MRA, increased $78.7 million.

      Earnings  in 1998 were also affected by the incremental costs of a January
ice storm and a Labor Day windstorm, reducing earnings by approximately 24 cents
per  share  and  6  cents  per  share,  respectively.

     The company reported a fourth-quarter 1998 loss of $26.5 million, or a loss
of  14  cents per share, compared to a fourth-quarter 1997 loss of $1.4 million,
or  a  loss  of  1 cent per share.  Earnings for the fourth quarter of 1998 were
lower  than  last year's fourth-quarter earnings primarily because of the impact
of the non-cash amortization of the MRA regulatory asset of $96.6 million, or 34
cents per share. Cash flow in the fourth quarter of 1998 improved as payments to
IPPs  during  the fourth quarter 1998 decreased $157.6 million compared to 1997.
For  the  same  period,  fuel for electric generation increased $9.4 million and
interest  charges  increased  $63.4  million.

     Electric  revenues  for 1998 were $3.3 billion, down 1.5 percent from 1997.
Electric  revenues for the fourth quarter 1998 were down 5.6 percent compared to
the  fourth  quarter  last  year.
     Primarily because of the warmer weather in 1998 as compared to 1997, retail
sales  of  electricity in 1998 decreased 1.6 percent and total electricity sales
were down 1.9 percent.  Also, because of warmer weather in the fourth quarter of
1998,  retail  sales  of  electricity  and total electricity sales in the fourth
quarter 1998 were down 2.7 percent and 4.6 percent, respectively, as compared to
the  same  period  in  1997.

     Natural  gas  revenues for 1998 were $565.2 million, down 14.0 percent from
1997.  Fourth-quarter  1998 natural gas revenues were down 18.2 percent compared
to  the  fourth  quarter  1997.

     Retail  sales of natural gas for the year and fourth quarter 1998 decreased
17.3 percent and 21.9 percent,  respectively,   compared  to  the  same  periods
in    1997,      primarily    due    to    warmer      weather. Total  gas
deliveries,  which include the transportation of customer-owned gas, were
down  15.6  percent for the year 1998, and down 29.9 percent in the fourth
quarter  1998, also primarily due to the warmer weather and, in addition, due to
reduced  consumption  of  natural  gas  by  the  IPPs.

     Dividends were declared at the prescribed rates for all series of preferred
stock.  The  first  quarter 1999 dividend rate per annum for the adjustable rate
preferred stock Series A is 6.50 percent; Series B is 7.50 percent; and Series C
is  7.00  percent.  These  rates  equate  to payments of $0.40625; $0.46875; and
$0.4375  per  share,  respectively.  Preferred dividends are payable March 31 to
holders  of  record  March  8,  1999.

     Consolidated  Statements  of Income and Selected Operating Information will
be  filed  today  with  the  Securities  and  Exchange  Commission  on Form 8-K.


<TABLE>
<CAPTION>

                                               SELECTED OPERATING INFORMATION

Niagara Mohawk Power Corporation
and Subsidiary Companies (Unaudited)
------------------------------------
ELECTRIC OPERATIONS

                                               Three Months Ended                           Year Ended
                                                  December 31,                             December 31,
                                                                     %                                        %
SALES (MILLIONS OF KWH)                  1998         1997         Change           1998         1997       Change
-----------------------                  ----         ----         ------           ----         ----       ------
<S>                                  <C>          <C>            <C>            <C>           <C>            <C>
Residential . . . . . . . . . . . . .     2,285        2,331        (2.0)           9,643         9,905       (2.6)
Commercial. . . . . . . . . . . . . .     2,736        2,815        (2.8)          11,560        11,552        0.1 
Industrial. . . . . . . . . . . . . .     1,657        1,778        (6.8)           6,843         7,191       (4.8)
Industrial - Special. . . . . . . . .     1,190        1,166         2.1            4,568         4,507        1.4 
Other . . . . . . . . . . . . . . . .        69           70        (1.4)             241           235        2.6 
                                         ------        -----         ----           -----        ------       -----
TOTAL TO ULTIMATE CUSTOMERS . . . . .     7,937        8,160        (2.7)          32,855        33,390       (1.6)
Sales for resale. . . . . . . . . . .       495          680       (27.2)           3,577         3,746       (4.5)
                                         ------        -----       ------          ------        ------       -----
TOTAL SALES . . . . . . . . . . . . .     8,432        8,840        (4.6)          36,432        37,136       (1.9)
                                         ======        =====       ======          ======        ======       =====

Peak load - MW. . . . . . . . . . . .     5,724        5,682         0.7            5,928         6,348       (6.6)
Peak load - Date. . . . . . . . . .  12/22/1998   12/22/1997                    7/16/1998     7/15/1997

GAS OPERATIONS
                                              Three Months Ended                            Year Ended
                                                 December 31,                              December 31,
                                                                     %                                        %
SALES (THOUSANDS OF DEKATHERMS) . .     1998          1997         Change           1998         1997       Change
-------------------------------         ----          ----         ------           ----         ----       ------

Residential . . . . . . . . . . . .    10,422       12,794         (18.5)          47,250        55,203      (14.4)
Commercial. . . . . . . . . . . . .     3,580        5,122         (30.1)          17,023        22,069      (22.9)
Industrial. . . . . . . . . . . . .       163          227         (28.2)             752         1,381      (45.5)
                                       ------       ------       --------         -------       -------      ------
TOTAL TO ULTIMATE CUSTOMERS . . . . .  14,165       18,143         (21.9)          65,025        78,653      (17.3)
Transportation of customer-owned gas.  25,868       39,508         (34.5)         127,867       152,841      (16.3)
Spot market sales . . . . . . . . . .     397           20       1,885.0            4,501         2,451       83.6 
                                      -------       ------       --------         -------       -------      ------
TOTAL GAS DELIVERED . . . . . . . . .  40,430       57,671         (29.9)         197,393       233,945      (15.6)
                                      =======       ======       ========         =======       =======      ======

Degree days
    Actual. . . . . . . . . . . . . .   2,130        2,430         (12.3)           5,806         6,842      (15.1)
    Normal. . . . . . . . . . . . . .   2,326        2,326                          6,803         6,803

</TABLE>


<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME

                                                                           In thousands of dollars

                                                                 Three Months Ended             Year Ended
Niagara Mohawk Power Corporation                                    December 31,               December 31,
and Subsidiary Companies (Unaudited)                          1998           1997          1998         1997
-------------------------------------------------------  -------------  -------------   -----------  -----------
<S>                                                      <C>            <C>             <C>          <C>
OPERATING REVENUES:
Electric. . . . . . . . . . . . . . . . . . . . . . . .  $    755,096   $    799,838    $3,261,144   $3,309,441
Gas . . . . . . . . . . . . . . . . . . . . . . . . . .       131,336        160,466       565,229      656,963
                                                         -------------  -------------   -----------  -----------
                                                              886,432        960,304     3,826,373    3,966,404
                                                         -------------  -------------   -----------  -----------

OPERATING EXPENSES:
Fuel for electric generation. . . . . . . . . . . . . .        61,549         52,124       239,982      179,455
Electricity purchased . . . . . . . . . . . . . . . . .       135,314        296,983     1,001,991    1,236,108
Gas purchased . . . . . . . . . . . . . . . . . . . . .        55,769         92,430       272,141      345,610
Other operation and maintenance expenses. . . . . . . .       240,011        230,020       937,798      835,282
POWERCHOICE charge. . . . . . . . . . . . . . . . . . .             -              -       263,227            -
Amortization of MRA regulatory asset. . . . . . . . . .        96,649              -       128,833            -
Depreciation and amortization . . . . . . . . . . . . .        90,877         85,472       355,417      339,641
Other taxes . . . . . . . . . . . . . . . . . . . . . .       103,000        117,251       459,961      471,469
                                                         -------------  -------------   -----------  -----------
                                                              783,169        874,280     3,659,350    3,407,565
                                                         -------------  -------------   -----------  -----------
 

OPERATING INCOME. . . . . . . . . . . . . . . . . . . .       103,263         86,024       167,023      558,839

Other income (deductions) . . . . . . . . . . . . . . .        (5,018)         4,144        42,602       24,997
                                                         -------------  -------------   -----------  ----------- 


INCOME BEFORE INTEREST CHARGES. . . . . . . . . . . . .        98,245         90,168       209,625      583,836

Interest charges. . . . . . . . . . . . . . . . . . . .       132,069         68,646       397,178      273,906
                                                         -------------  -------------   -----------   ----------
INCOME (LOSS) BEFORE FEDERAL & FOREIGN INCOME TAXES . .       (33,824)        21,522      (187,553)     309,930

Federal and foreign income taxes. . . . . . . . . . . .       (16,391)        13,641       (66,728)     126,595
                                                         -------------  -------------   -----------  -----------

NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . .       (17,433)         7,881      (120,825)     183,335

Dividends on preferred stock. . . . . . . . . . . . . .         9,024          9,236        36,555       37,397
                                                         -------------  -------------   -----------  -----------

BALANCE AVAILABLE FOR COMMON STOCK. . . . . . . . . . .      ($26,457)       ($1,355)    ($157,380)  $  145,938
                                                         =============  =============   ===========  ===========
AVERAGE NUMBER OF SHARES OF COMMON
      STOCK OUTSTANDING (IN THOUSANDS). . . . . . . . .       187,365        144,419       166,186      144,404

BASIC AND DILUTED EARNINGS (LOSS) PER AVERAGE
      SHARE OF COMMON STOCK . . . . . . . . . . . . . .        ($0.14)        ($0.01)       ($0.95)  $     1.01

OTHER OPERATING DATA:

Earnings before interest charges, interest income,
income taxes, depreciation and amortization, and other
regulatory adjustments (EBITDA) . . . . . . . . . . . .  $    267,036              -    $  990,532            -

Net cash interest.. . . . . . . . . . . . . . . . . . .  $    114,707              -    $  345,523            -

Ratio of EBITDA to net cash interest. . . . . . . . . .           2.3              -           2.9            -

</TABLE>

NOTES:

* The above information is not given in connection with any sale or offer to
  sell or buy any stock or security.
* The Company files periodic reports pursuant to the Securities Exchange Act
  of 1934.  Accordingly, with respect to the financial information set forth
  you are requested to refer to such filings for more detailed information.


NIAGARA MOHAWK POWER CORPORATION AND SUBSIDIARY COMPANIES
                ---------------------------------------------------------

                                       (Unaudited)

                                     EARNINGS REPORT
                                     ---------------
                              (IN  THOUSANDS  OF  DOLLARS)



<TABLE>
<CAPTION>

                                             THREE MONTHS ENDED          TWELVE MONTHS ENDED

                                                  DECEMBER 31,                DECEMBER 31,
                                             1998            1997          1998         1997
                                        --------------  --------------  -----------  ----------
<S>                                     <C>             <C>             <C>          <C>
Operating Revenues . . . . . . . . . .  $     886,432   $     960,304   $3,826,373   $3,966,404
Operating Income . . . . . . . . . . .        103,263          86,024      167,023      558,839
Net Income (Loss). . . . . . . . . . .        (17,433)          7,881     (120,825)     183,335
Balance Available for Common Stock . .  $    ( 26,457)  $     ( 1,355)  $ (157,380)  $  145,938
Average number of shares of common
  stock outstanding (in thousands) . .        187,365         144,419      166,186      144,404
Basic and diluted earnings (loss) per
  average share of common stock
                                        $       (0.14)  $       (0.01)  $    (0.95)  $     1.01
EBITDA . . . . . . . . . . . . . . . .  $     267,036              --   $  990,532           --
Net Cash Interest. . . . . . . . . . .  $     114,707              --   $  345,523           --
Ratio of EBITDA to Net Cash Interest .            2.3              --          2.9           --
</TABLE>



NOTE  1:     The  above information is not given in connection with any sale or
             offer  to  sell  or  buy  any  stock  or  security.

NOTE  2:     The  company  files  periodic  reports  pursuant  to the Securities
             Exchange  Act  of  1934.  Accordingly, with respect to the
             financial information set  forth  above,  you are requested to
             refer to such filings for more detailed information.