UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-K

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

            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended......................December 31, 1998

                        Commission file number 333-52797

                             CH Energy Group, Inc.
           ------------------------------------------------------
            (Exact name of registrant as specified in its charter)


            New York                               14-1804460
-------------------------------                  ----------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                  Identification No.)

284 South Avenue, Poughkeepsie, New York                12601-4879
----------------------------------------                ----------
(Address of principal executive offices)                (Zip Code)


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

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:  NONE

            The Company meets the conditions  set forth in General  Instructions
(I)(1)(a)  and (b) to Form  10-K and is  therefore  filing  this  form  with the
reduced disclosure format pursuant to General Instructions (I)(2).


<PAGE>



            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.

                  NO [  ]            YES  [ X ]

            Indicate by check mark if disclosure of delinquent  filers  pursuant
to  Item  405 of  Regulation  S-K is  not  contained  herein,  and  will  not be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]

            The  aggregate  market  value of the  voting and  non-voting  common
equity held by  non-affiliates  of the  Registrant  as of February  26, 1999 was
zero.

            The number of shares outstanding of Registrant's Common Stock, as of
February 26, 1999, was 100.


<PAGE>



                                TABLE OF CONTENTS

                                                                        Page
                                                                        ----
Table of Contents
-----------------
                                     PART I
                                     ------
ITEM 1      BUSINESS                                                      1
------

ITEM 2      PROPERTIES                                                    1
------

ITEM 3      LEGAL PROCEEDINGS                                             1
------

                                     PART II
                                     -------

ITEM 5      MARKET FOR THE COMPANY'S COMMON EQUITY AND
------      RELATED STOCKHOLDER MATTERS                                   1

ITEM 7      MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------      FINANCIAL CONDITION AND RESULTS OF OPERATIONS                 1

ITEM 7A     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
-------     MARKET RISK                                                   2

ITEM 8      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                   2
------

ITEM 9      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
------      ON ACCOUNTING AND FINANCIAL DISCLOSURE                        9

                                     PART IV
                                     -------

ITEM 14     EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND
-------     REPORTS ON FORM 8-K                                           9

SIGNATURES                                                               10

                                       (i)


<PAGE>



                                     PART I
                                     ------

FORWARD LOOKING STATEMENTS

            This Form 10-K Report may contain  statements  which,  to the extent
they  are  not  recitations  of  historical  fact,  constitute  "forward-looking
statements"  within the meaning of the Securities  Litigation Reform Act of 1995
(Reform Act). These statements will contain words such as "believes," "expects,"
"intends,"   "plans,"  and  other  similar  words.  All  such  forward-  looking
statements are intended to be subject to the safe harbor protection  provided by
the Reform Act. A number of important factors  affecting the Company's  business
and financial results could cause actual results to differ materially from those
stated in the forward-looking statements.

      ITEM 1 - BUSINESS
      -----------------

            For  a  description  of  the  business  of  CH  Energy  Group,  Inc.
("Company"),  see Note 2 of the Notes to the Financial Statements referred to in
Item 8 hereof (each such Note being hereinafter called the "Note").

      ITEM 2 - PROPERTIES
      -------------------

            The Company owns no assets.

      ITEM 3 - LEGAL PROCEEDINGS
      --------------------------

            There  were no legal  proceedings  against  the  Company  during the
 period of this Report.

                                     PART II
                                     -------

      ITEM 5 -  MARKET FOR THE COMPANY'S COMMON EQUITY AND
                RELATED STOCKHOLDER MATTERS
      ----------------------------------------------------

            The  Company  is  a   wholly-owned   subsidiary  of  Central  Hudson
(described in Note 2 hereof).  Therefore, there is no established public trading
market for the Company's Common Stock. The Company has declared no cash dividend
on its Common Stock.

      ITEM 7 -    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS
      -------------------------------------------------------------

          The  Company  was  formed in April 1998 and will  become  the  holding
company  owner of Central  Hudson upon the share  exchange  discussed in Note 2.
Until the share  exchange  occurs,  the  activity  of CH  Energy  Group  will be
minimal. Consequently,

                                      1


<PAGE>



no revenues have been earned and only expenses  related to the  registration  of
the Company's common stock have been recorded.

      ITEM 7A -   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
                  MARKET RISK
      ---------------------------------------------------------

            The  Company  has  engaged  in no  activities  involving  derivative
financial  instruments,  other financial  instruments  and derivative  commodity
instruments.

      ITEM 8 -    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
      -------------------------------------------------------

      Index to Financial Statements:                              Page
                                                                  ----
            Report of Independent Accountants                       3
            Balance Sheet at December 31, 1998                      4
            Statement of Income for the period
              April 24, 1998 (Inception) to
              December 31, 1998                                     5
            Statement of Cash Flows for the period
              April 24, 1998 (Inception) to
              December 31, 1998                                     6
            Notes to Financial Statements                           7

                                      2


<PAGE>



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholder of CH Energy Group,
Inc.

In our  opinion,  the  financial  statements  listed in the  accompanying  index
present fairly, in all material  respects,  the financial  position of CH Energy
Group, Inc. at December 31, 1998, and the results of its operations and its cash
flows for the period  April 24,  1998  (Inception)  to  December  31,  1998,  in
conformity  with  generally  accepted  accounting  principles.  These  financial
statements   are  the   responsibility   of  the   Company's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audit.  We conducted our audit of these  financial  statements in accordance
with  generally  accepted  auditing  standards  which  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion  expressed
above.

PRICEWATERHOUSECOOPERS LLP

New York, New York
January 29, 1999

                                      3


<PAGE>



                              CH ENERGY GROUP, INC.
                                  BALANCE SHEET

                                                  December 31, 1998
                                                  ------------------

            ASSETS

Current Assets
  Cash and cash equivalents.............              $    -
    Total Current Assets................                   -
                                                       --------

Total Assets............................              $    -
                                                       ========


            CAPITALIZATION and LIABILITIES

Capitalization
  Common Stock Equity
   Common stock, 30,000,000 shares
   authorized; shares issued
   ($.10 par value):
  1998 - 100............................              $      10
  Accumulated Deficit...................               (112,612)
                                                       --------
    Total Capitalization................               (112,602)
                                                       --------

Current Liabilities
  Due to parent.........................                112,602
                                                       --------
    Total Current Liabilities...........                112,602
                                                       --------
Total Capitalization and
 Liabilities............................              $    -
                                                       ========















                        See Notes to Financial Statements

                                      4


<PAGE>



                              CH ENERGY GROUP, INC.
                               STATEMENT OF INCOME

                                             For the Period April 24,
                                               1998 (Inception) to
                                                 December 31, 1998
                                             ------------------------

Operating Revenues......................              $    -

Expenses
  Start-up Costs........................                112,612
  Federal income tax(Note 4)............                   -
                                                       --------
Net Loss and Accumulated Deficit........              $(112,612)
                                                       ========






























                        See Notes to Financial Statements

                                      5


<PAGE>



                              CH ENERGY GROUP, INC.
                             STATEMENT OF CASH FLOWS

                                                For the Period April 24,
                                                   1998 (Inception) to
                                                   December 31, 1998
                                                 ------------------------
Operating Activities
  Net (Loss)............................              $(112,612)
  Changes in current assets and
   liabilities, net:
   Due to parent........................                112,602
                                                       --------
  Net cash used by operating
   activities...........................                    (10)
                                                       --------
Investing Activities....................                   -
                                                       --------
Financing Activities
  Common stock issuance.................                     10
                                                       --------
  Net cash provided by financing
   activities...........................                     10
                                                       --------
Net Change in Cash and Cash
 Equivalents............................                   -
Cash and Cash Equivalents -
 Beginning of Period....................                   -
                                                       --------
Cash and Cash Equivalents -
 End of Period..........................              $    -
                                                       ========
Supplemental Disclosure of
 Cash Flow Information
   Interest paid........................              $    -
   Federal income tax paid..............                   -

















                        See Notes to Financial Statements

                                      6


<PAGE>



                              CH Energy Group, Inc.
                              ---------------------
                          Notes to Financial Statements
                          -----------------------------

NOTE 1 - GENERAL

            Preparation  of the financial  statements  of CH Energy Group,  Inc.
(herein  "the  Company")  in  accordance  with  generally  accepted   accounting
principles  requires the use of estimates and  assumptions  by  management  that
effect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities at the date of the financial  statements and
reported  amounts of revenues and expenses during the reporting  period.  Actual
results may differ from those estimates.

NOTE 2 - FORMATION OF THE COMPANY

            Effective  April 24,  1998,  CH Energy  Group,  Inc. was formed as a
wholly-owned subsidiary of Central Hudson Gas & Electric Corporation,  ("Central
Hudson"), a New York State gas and electric corporation  (Commission file number
1-3268), which upon a one-for-one share exchange will become the holding company
owner of Central Hudson. The registration statement  ("Registration  Statement")
relating  to the  securities  to be  issued to effect  the  share  exchange  was
effective on July 28, 1998. Initially,  the holding company ("the Company") will
own as first tier  subsidiaries  Central  Hudson and its existing  subsidiaries,
with the exception of one subsidiary (Phoenix Development  Company,  Inc.) which
holds  real  property  for future use by  Central  Hudson.  Phoenix  Development
Company,  Inc.  will remain a  wholly-owned  subsidiary of Central  Hudson.  The
Company following the share exchange, may also establish other subsidiaries over
time.

            A  special  meeting  of  Central  Hudson  shareholders  was  held on
September 25, 1998, at which meeting  Central Hudson  shareholders  approved the
share  exchange  which  will  result  in  the  formation  of a  holding  company
structure.  While no specific  date has been set, it is expected  that the share
exchange  will occur during the first half of 1999.  This will allow the Company
to coordinate closely with such restructuring the transfer of up to $100 million
in equity  from  Central  Hudson  to CH Energy  Group,  Inc.  and/or  one of its
prospective first tier subsidiaries.

            The Company is a start-up  company  and as such,  has  generated  no
revenues and has only incurred expenses. Costs incurred to date primarily relate
to the  registration  of the  Company's  common  stock with the  Securities  and
Exchange Commission.

                                      7


<PAGE>



NOTE 3 - SHORT-TERM CREDIT FACILITIES

            The Company has established a $50 million revolving credit agreement
with three  commercial  banks  through  December  4,  2001.  No  borrowings  are
permitted under such agreement  until the share exchange  establishing CH Energy
Group, Inc. as a holding company.

NOTE 4 - FEDERAL INCOME TAXES

            Central Hudson files a consolidated  federal income tax return which
includes the Company's  federal income tax provision.  No income tax benefit was
recorded during 1998 because substantially all of the start-up costs incurred by
the Company related to the Company's Registration  Statement, on Form S-4, filed
with the Securities and Exchange  Commission,  which became effective,  July 28,
1998. Such costs are not deductible for Federal Income Tax purposes.

                                      8


<PAGE>



      ITEM 9 -    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ------      ------------------------------------------------
                  ACCOUNTING AND FINANCIAL DISCLOSURE
                  -----------------------------------

            NONE

                                     PART IV
                                     -------

      ITEM 14 -   EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND
      -------     -------------------------------------------
                  REPORTS ON FORM 8-K
                  -------------------

            (a)   Documents filed as part of this Report
                  --------------------------------------

                  1. and 2. All Financial  Statements  and  Financial  Statement
                  Schedules  filed as part of this Report are included in Item 8
                  of this Form 10-K and reference is made thereto.

                  3.  Exhibits

                  Incorporated herein by reference to the Exhibit Index for this
                  Report.  There are no  management  contracts  or  compensatory
                  plans or  arrangements  required  to be  filed  as an  Exhibit
                  pursuant to Item 14(c) hereof.

            (b)   Reports on Form 8-K
                  -------------------

                  None.

            (c)   Exhibits required by Item 601 of Regulation S-K
                  -----------------------------------------------

                  Incorporated  herein by reference to subpart (a)-3 of Item 14,
                  above.

            (d)   Financial  Statement Schedule required by Regulation S-X which
                  --------------------------------------------------------------
                  is excluded from the Company's  Annual Report to  Shareholders
                  --------------------------------------------------------------
                  for the fiscal year ended December 31, 1998
                  -------------------------------------------

                  Not applicable, see Item 8 hereof.

                                      9


<PAGE>


                                   SIGNATURES
                                   ----------

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the Company has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                        CH ENERGY GROUP, INC.

                        By: /S/ John E. Mack III
                        ------------------------------
                             (John E. Mack III,
                             Chairman of the Board and
                             Chief Executive Officer)

Dated:  March 1, 1999

            Pursuant to the requirements of the Securities Exchange Act of 1934,
this  Report has been  signed  below by the  following  persons on behalf of the
Company and in the capacities and on the date indicated:

      Signature                        Title                Date
      ---------                        -----                ----

(a) Principal Executive
      Officer or Officers:

/S/ John E. Mack III
------------------------
(John E. Mack III)                   Chairman of
                                     the Board and        March 1, 1999
                                     Chief Executive
                                     Officer

(b) Principal Accounting
      Officer:

/S/ Donna S. Doyle
------------------------
(Donna S. Doyle)                     Controller           March 1, 1999

(c) Chief Financial
      Officer:

/S/ Steven V. Lant
------------------------
(Steven V. Lant)                    Treasurer             March 1, 1999

(d)   A Majority of Directors:

By  /S/ John E. Mack III
------------------------
   (John E. Mack III)               Sole Director         March 1, 1999

                                      10


<PAGE>