<PAGE>                                       EXHIBIT (10)(iii) 23


            CENTRAL HUDSON GAS & ELECTRIC CORPORATION

                  MANAGEMENT INCENTIVE PROGRAM


          WHEREAS, effective with the fiscal year beginning
January 1, 1991, the Company established a Management Incentive
Program ("MIP") as part of the Company's Savings Incentive Plan
("SIP"); and

          WHEREAS, effective April 1, 1994, the SIP was amended
and restated and the MIP was continued as a separate program; and

          WHEREAS, the Company proposes to amend and restate the
MIP by this instrument;

          NOW, THEREFORE, the Company hereby amends the MIP,
effective as of April 1, 1994, to read as amended as follows:

I.   General
          The MIP shall be a cash bonus program ("Incentive
Award") based on meeting an "Incentive Goal" (as described
below).  The MIP's purpose is to provide an added incentive to
management employees for meeting or exceeding the Company's
commitments to its customers, shareholders and employees.

II.  Eligibility
          All management employees are eligible to receive an
Incentive Award except (i) the Chairman of the Board and Chief
Executive Officer, the President and Chief Operating Officer and
any other officer(s) which the Chairman shall determine from time
to time, (ii) temporary employees and (iii) those employees whose
employment is terminated in a year in which an Incentive Award is
made unless such termination is a retirement.

III. Incentive Goal
          The Incentive Goal will be established during the first
quarter of each year by the Board of Directors and thereafter
announced to the Company's management employees.  The Incentive
Goal currently in effect shall be attached hereto as Exhibit A.

IV.  Incentive Award
          After the audited financial results of the Company for
a fiscal year ("Fiscal Year") have been made public, the Board of
Directors of the Company shall determine whether or not the
Incentive Goal has been met for the Fiscal Year, which
determination shall be final.  The method for determining the
amount of the Incentive Award currently in effect shall be set
forth in Exhibit A.

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          If the Incentive Goal for the Fiscal Year has been met,
the Incentive Award shall be paid (subject to applicable payroll
taxes) to those management employees determined to be eligible
pursuant to Paragraph II hereof as soon as practicable after such
determination by the Board of Directors.  The aggregate of the
Incentive Award will be allocated among and be paid to each such
eligible management employee in the same proportion that each
such employee's base compensation for the Fiscal Year bears to
base compensation paid to all such eligible management employees
for that Fiscal Year.  Each employee's base compensation up to a
maximum of $150,000 shall be considered in the determination of
an Incentive Award.

          IN WITNESS WHEREOF, the undersigned Chairman of the
Board and Chief Executive Officer of Central Hudson Gas &
Electric Corporation has signed this instrument this 15th day of
March, 1995 as duly authorized by resolution of the Board of
Directors.


                                                           
                                       JOHN E. MACK, III
                                 Chairman of the Board and
                                  Chief Executive Officer


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    EXHIBIT A - Incentive Goal and Award Currently in Effect

I.   Incentive Goal
          The Company must have exceeded the rate of return on
the Company's Common Equity then authorized by the New York
Public Service Commission with respect to the Company's electric
and gas departments for the fiscal year in question.  If the rate
of return is different for said departments, a weighted average
of such returns shall be used.  In the event a new rate of return
becomes effective during (but not at the beginning of) a fiscal
year, a rate of return shall be developed for the Incentive Goal
for that (but only that) fiscal year using a weighted average of
the prior and new rates of return, and after such fiscal year the
new rate of return shall be the Incentive Goal until changed by a
subsequent authorized rate of return.

II.  Incentive Award
          The Incentive Award shall be determined as follows:

               $15,000 for each .01% by which the Incentive
               Goal is exceeded, provided that the excess is
               equal to or greater than 0.1%.

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