Exhibit (10)(iii)14)

                      CHANGE-OF-CONTROL SEVERANCE POLICY

                                 Introduction

            The Board of Directors of Central Hudson Gas & Electric  Corporation
recognizes  that the Company may  experience a Change of Control,  and that this
possibility and the uncertainty it creates may result in the loss or distraction
of  employees  of  the  Company  to  the   detriment  of  the  Company  and  its
shareholders.

            The Board considers the avoidance of such loss and distraction to be
essential to protecting  and enhancing the best interests of the Company and its
shareholders. The Board also believes that when a Change of Control is perceived
as imminent,  or is  occurring,  the Board should be able to receive and rely on
disinterested service from employees regarding the best interests of the Company
and its  shareholders  without  concern that  employees  might be  distracted or
concerned by the personal  uncertainties  and risks created by the perception of
an imminent or occurring Change of Control.

            In  addition,  the Board  believes  that it is  consistent  with the
Company's  employment  practices  and policies and in the best  interests of the
Company and its  shareholders  to treat fairly its  employees  whose  employment
terminates in connection with or following a Change of Control.

            Accordingly,  the Board has determined that appropriate steps should
be taken to assure the Company of the  continued  employment  and  attention and
dedication to duty of its employees  and to seek to ensure the  availability  of
their  continued  service,  notwithstanding  the  possibility or occurrence of a
Change of Control.

            Therefore,  in order to fulfill the above  purposes,  the  following
plan has been developed and is hereby adopted.

                                    ARTICLE I
                              ESTABLISHMENT OF PLAN

            As of the Effective Date, the Company hereby establishes the Central
Hudson Gas & Electric  Corporation  Change-of-Control  Severance  Policy, as set
forth in this document.

                                   ARTICLE II
                                   DEFINITIONS

            As used  herein  the  following  words and  phrases  shall  have the
following respective meanings (unless the context clearly indicates otherwise):

            (a) Base Salary. The amount a Participant is entitled to receive as


<PAGE>



wages or salary on an annualized basis, excluding all bonus, overtime, incentive
compensation,  payable by the Company or any of its affiliates as  consideration
for the Participant's services.

            (b) Board. The Board of Directors of the Company.  

            (c)  Cause.  A termination for "Cause" shall  have  occurred  where 
a Participant is terminated because of (A) the willful and continued  failure of
the  Participant  to perform  substantially  the  Participant's  duties with the
Company or any of its  affiliates  (other than any such failure  resulting  from
incapacity due to physical or mental  illness);  or (B) the willful  engaging by
the Participant in illegal conduct or gross  misconduct  which is materially and
demonstrably injurious to the Company.

            (d) Change of Control.  Any of the following events: 

     (i) The acquisition by any individual,  entity or group (within the meaning
of Section  13(d)(3) or  14(d)(2) of the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange Act")) (a "Person") of beneficial  ownership  (within the
meaning  of Rule 13d-3  promulgated  under the  Exchange  Act) of 20% or more of
either (a) the then out  standing  shares of common  stock of the  Company  (the
"Outstanding Company Common Stock") or (b) the combined voting power of the then
outstanding  voting  securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting  Securities");  provided,
however,  that for purposes of this subsection  (i), the following  acquisitions
shall not constitute a Change of Control:  (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any acquisition by any employee
benefit plan (or related  trust)  sponsored or  maintained by the Company or any
corporation  controlled  by the  Company or (d) any  acquisition  pursuant  to a
transaction  which complies with clauses (A), (B) and (C) of subsection (iii) of
this Section 2(c); or

     (ii)  Individuals  who, as of the date of this Plan,  constitute  the Board
(the  "Incumbent  Board") cease for any reason to constitute at least a majority
of the  Board;  provided,  however,  that any  individual  becoming  a  director
subsequent to the date of this Plan whose  election,  or nomination for election
by the Company's shareholders,  was approved by a vote of at least a majority of
the directors then  comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent  Board,  but excluding,  for this
purpose,  any such  individual  whose  initial  assumption of office occurs as a
result of an actual or threatened  election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (iii) Consummation of a reorganization,  merger or consolidation or sale or
other  disposition of all or  substantially  all of the assets of the Company or
the acquisition of assets of another entity (a "Corporate Transaction"), in each
case, unless, following such

                                     -2-
<PAGE>


Corporate Transaction,  (A) all or substantially all of the individuals and
entities  who were  the  beneficial  owners,  respectively,  of the  Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Corporate  Transaction  beneficially own,  directly or indirectly,  more
than 60% of,  respectively,  the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors,  as the case may be, of the  corporation
resulting from such Corporate  Transaction  (including,  without  limitation,  a
corporation  which as a result of such  transaction  owns the  Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries)  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such  Corporate  Transaction  of the  Outstanding  Company
Common Stock and Outstanding Company Voting Securities,  as the case may be, (B)
no Person (excluding any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Corporate Transaction) beneficially own,
directly  or  indirectly,  20% or more of,  respectively,  the then  outstanding
shares  of  common  stock  of the  corporation  resulting  from  such  Corporate
Transaction  or the  combined  voting  power  of  the  then  outstanding  voting
securities of such corporation  except to the extent that such ownership existed
prior to the Corporate Transaction and (C) at least a majority of the members of
the  board  of  directors  of the  corporation  resulting  from  such  Corporate
Transaction  were members of the Incumbent Board at the time of the execution of
the  initial  agreement,  or of the  action  of the  Board,  providing  for such
Corporate Transaction;  or 

     (iv) Approval by the shareholders of the Company of a complete  liquidation
or dissolution of the Company.

            (e) Code.  The Internal Revenue Code of 1986, as amended from time
to time.  

            (f) Committee. The Committee on Compensation and Succession of the
Board.

            (g) Company.  Central Hudson Gas & Electric Corporation and any 
successor thereto.

            (h) Date of Termination. As defined in Section 4.2(a).

            (i) Disability.  A termination for "Disability" shall have occurred
where a Participant  is  terminated  because  of a  disability  entitling  him 
or her to long-term  disability benefits under the applicable long-term 
disability plan of the Company or any of its affiliates.

            (j)  Effective  Date.  Such date as the Board shall designate in its
resolution approving the Plan.

                                     -3-
<PAGE>



            (k) Employee. Any regular,  full-time or part-time employee of the
Company or any of its affiliates.

            (l)  Good  Reason.  With  respect  to  any  Participant,   the
occurrence  of any of the  following  events  after a Change of  Control:  (A) a
reduction in the Participant's Base Salary below the Required Base Salary; (B) a
material and adverse change in the Participant's  duties and responsibilities in
comparison  to the  duties  and  responsibilities  enjoyed  by  the  Participant
immediately  prior to the Change of  Control;  (C) a material  reduction  in the
aggregate level of the incentive  compensation and employee  benefits offered to
the  Participant  in  comparison  to the  incentive  compensation  and  benefits
arrangements  enjoyed  by the  Participant  immediately  prior to the  Change of
Control;  or (D) a  requirement  that the  Participant  be  based at a  location
outside the Company's service territory (as it existed  immediately prior to the
Change of Control) unless the  Participant is provided with relocation  benefits
at least as favorable as those that would have been provided under the Company's
relocation policy as in effect immediately before the Change of Control.

            (m) Multiple. As defined in Section 4.2(a).

            (n)  Participant.   An  Employee  who  meets  the  eligibility
requirements of Section 3.1.

            (o)  Plan.  The  Central  Hudson  Gas &  Electric  Corporation
Change-of-Control Severance Policy.

            (p)  Qualified  Transfer.  With  respect  to any  Participant,
either (i) a sale,  distribution or other  disposition (a "Sale") by the Company
or an affiliate of the Company of the subsidiary,  branch or other business unit
in which  the  Participant  was  employed  before  such  sale,  distribution  or
disposition, if the Participant is offered employment with the purchaser of such
subsidiary,  branch or other  business unit or the  corporation  or other entity
which is the owner thereof,  or (ii) a transfer of the Participant to the employ
of a subsidiary or other affiliate of the Company (a "Transfer"), in either case
on  substantially  the same terms and  conditions  under  which the  Participant
worked immediately before the Sale or Transfer,  including,  without limitation,
base salary, duties and responsibilities, program of benefits and location where
based,  and a  legally  binding  agreement  or plan  covering  such  Participant
providing that upon a termination of employment with the subsidiary,  affiliate,
branch or business unit (or the  corporation  or other entity which is the owner
thereof)  or any  successor  of the kind  described  in Article VI of this Plan,
within two years after the Change of Control of the Company,  the  Participant's
employer or any successor will pay to such former Participant an amount equal to
the  Separation  Benefit and other benefits that such former  Participant  would
have  received  under the Plan had he or she been a  Participant  at the time of
such  termination,  and which new employer plan or agreement treats service with
the Company and its  affiliates  (irrespective  of whether the  affiliate was an
affiliate of the Company or the Employee was a  Participant  at the time of such
service) and the new employer as continuous service for purposes of calculating

                                     -4-
<PAGE>



separation benefits.

            (q) Release. As defined in Section 4.5.

            (r) Required Base Salary. With respect to any Participant, the
higher of (x) the  Participant's  Base Salary as in effect  immediately prior to
the Change of Control and (y) the Participant's highest Base Salary in effect at
any time thereafter.

            (s)  Retirement.  A  termination  by  "Retirement"  shall have
occurred where a Participant's termination is due to his or her voluntary normal
or early  retirement under a pension plan sponsored by the Company or any of its
affiliates, as defined in such plan.

            (t)  Separation  Benefit.  The benefits  payable in accordance
with Section 4.2 of the Plan.

            (u)   Weekly Salary.  The Participant's Required Base Salary divided
by 52.

            (v) Year of  Service.  A  twelve-month  continuous  period  of
employment,  including  periods  of  authorized  vacation,  authorized  leave of
absence  and  short-term  disability  leave,  with  the  Company  or  any of its
affiliates or their predecessors or successors.
                                   ARTICLE III
                                   ELIGIBILITY

     3.1  Participation.  Each individual (i) who is an Employee of the Company,
(ii) who is not a party to an employment agreement with the Company that becomes
effective in the event of a Change of Control, and (iii) who is not covered by a
collective  bargaining  agreement  shall  be a  Participant  in  the  Plan.  The
Committee   may  also   designate   any  other   Employee   as  a   Participant.
Notwithstanding the foregoing,  the Committee may cause any Employee to cease to
be a  Participant  at any time prior to the  occurrence  of a Change of Control,
provided that such action is not taken in connection  with or in anticipation of
a Change of Control. 

     3.2  Duration  of  Participation.   A  Participant  shall  cease  to  be  a
Participant  in the Plan when he or she ceases to be an  Employee of the Company
or otherwise ceases to be eligible pursuant to Section 3.1, unless the Committee
specifically   determines   that  the  Employee   shall  remain  a  Participant.
Notwithstanding  the foregoing,  a Participant  who is entitled,  as a result of
ceasing to be an Employee of the Company,  to payment of a Separation Benefit or
any other amounts  under the Plan shall remain a  Participant  in the Plan until
the full amount of the  Separation  Benefit and any other amounts  payable under
the Plan have been paid to the Par ticipant.

                                     -5-
<PAGE>



                                   ARTICLE IV
                               SEPARATION BENEFITS

     4.1 Right to Separation Benefit. A Participant shall be entitled to receive
from the Company a Separation Benefit in the amount provided in Section 4.2 if a
Change of Control has occurred and the  Participant's  employment is terminated:
(i) by action of the Company or any of its affiliates, unless the termination is
because of the Participant's death, Disability, or Retirement,  for Cause, or as
a result of a  Qualified  Transfer;  or (ii) by the  Participant  within 90 days
after the occurrence of an event constituting Good Reason;  provided,  in either
event, that either (A) such termination  occurs after such Change of Control and
on or before the second anniversary thereof, or (B) the termination described in
clause (i), or the event constituting Good Reason giving rise to the termination
described in clause (ii),  as  applicable,  occurs before such Change of Control
but the Participant can reasonably  demonstrate  that such termination or event,
as  applicable,  occurred  at the  request of a third  party who had taken steps
reasonably   calculated   to  effect  a  Change  of  Control  or   otherwise  in
contemplation  of or in  connection  with a Change of  Control.  

     4.2 Separation Benefits.  

            (a)  In  General.  If a Participant's employment is terminated  in
circumstances  entitling  him or her to a  Separation  Benefit  as  provided  in
Section 4.1, the Company shall pay such Participant, within ten days of the date
such termination  takes effect (the "Date of Termination")  or, if later, on the
date the Participant's Release ceases to be revocable, a Separation Benefit in a
lump sum in cash equal to the Multiple times the Weekly  Salary,  reduced by any
severance  pay or pay in lieu of  notice  required  to be paid to such  Employee
under  applicable law. The "Multiple" for a particular  Participant  means three
times the number of Years of Service completed by the Participant as of the Date
of  Termination,  but subject to the  following  minimum and maximum  Multiples,
depending upon the Participant's  salary grade as of the Date of Termination or,
if higher, as of immediately before the Change of Control:



Salary Grade                Minimum Multiple           Maximum Multiple
------------                ----------------           ----------------

IX and X                           8                         104

VIII through V                     6                          75

IV through I and executive and     3                          30
human resources secretaries

                                     -6-


<PAGE>



            (b) Welfare Benefits. In addition, a Participant entitled to a
Separation  Benefit will  continue to be  provided,  for the period of two years
beginning on the Date of  Termination,  with medical,  life  insurance and other
welfare  benefits,  comparable  in  scope  and  cost to the  Participant  to the
coverage that would have been provided if the Participant had continued to be an
Employee, for the Separation Period;  provided,  that if the Participant becomes
re-employed  with another  employer and is eligible to receive any such benefits
from such  employer,  the benefits  provided  pursuant to this sentence shall be
secondary to those provided under such other plans.

     4.3 Other Benefits  Payable.  The Separation  Benefit provided  pursuant to
Section 4.2 above  shall be  provided  in  addition  to, and not in lieu of, all
other accrued or vested or earned but deferred compensation,  rights, options or
other benefits which may be owed to a Participant upon or following termination,
including but not limited to accrued  vacation or sick pay,  amounts or benefits
payable under any bonus or other  compensation  plans, stock purchase plan, life
insurance plan,  health plan,  disability plan or similar or successor plan. 

     4.4 Certain Reduction of Payments by the Company.  

            (a) For purposes of this Section 4.4:(i) a "Payment" shall mean any
payment or distribution in the nature of compensation to or for the benefit of a
Participant,  whether paid or payable  pursuant to this Plan or otherwise;  (ii)
"Separation  Payment" shall mean a Payment paid or payable pursuant to this Plan
(disregarding  this  Section);  (iii)  "Present  Value"  shall  mean such  value
determined in accordance with Sections  280G(b)(2)(A)(ii)  and 280G(d)(4) of the
Code; and (iv) "Reduced  Amount" shall mean an amount expressed in Present Value
that  maximizes the  aggregate  Present  Value of  Separation  Payments  without
causing any Payment to be  nondeductible  by the Company because of Section 280G
of the Code.  

            (b) Anything in the Plan to the contrary notwithstanding, in the 
event the Accounting Firm (as defined below) shall determine that receipt of all
Payments would subject the Participant to tax under Section 4999 of the Code, 
the aggregate Separation Payments shall be reduced (but not below zero) to meet 
the definition of Reduced Amount. The "Accounting Firm" means a major accounting
firm with expertise in such matters designated by the Participant.

            (c) If the Accounting Firm determines that aggregate Separation 
Payments should be reduced to the Reduced Amount, the Company shall promptly 
give the Participant notice to that effect and a copy of the detailed 
calculation thereof, and the Participant may  then  elect, in his or her sole 
discretion,  which and how  much of the Separation  Payments shall be eliminated
or  reduced  (as long as after such election the Present Value of the aggregate
Separation Payments equals the Reduced Amount), and shall advise the Company in
writing of his or her election within ten days of his or her receipt of notice. 
If no such election is made by the Participant within such ten-day period, the 
Company may elect which of such Separation Payments shall be eliminated or 
reduced  (as long as after such election the Present Value of the

                                     -7-
<PAGE>



aggregate  Separation  Payments  equals the Reduced Amount) and shall notify the
Participant promptly of such election. All determinations made by the Accounting
Firm under this Section  shall be binding  upon the Company and the  Participant
and  shall  be made  within  60  days  of a  termination  of  employment  of the
Participant.  As promptly as  practicable  following  such de  termination,  the
Company  shall pay to or  distribute  for the  benefit of the  Participant  such
Separation Payments as are then due to the Participant under this Plan and shall
promptly pay to or distribute  for the benefit of the  Participant in the future
such Separation Payments as become due to the Participant under this Plan.

            (d) As a  result  of the  uncertainty  in the  application  of
Section  4999  of the  Code  at the  time of the  initial  determination  by the
Accounting  Firm  hereunder,  it is possible that amounts will have been paid or
distributed  by the Company to or for the benefit of a  Participant  pursuant to
this Plan which should not have been so paid or distributed  ("Overpayment")  or
that  additional  amounts  which will have not been paid or  distributed  by the
Company to or for the benefit of a Participant  pursuant to this Plan could have
been so paid or distributed ("Underpayment"),  in each case, consistent with the
calculation  of the Reduced Amount  hereunder.  In the event that the Accounting
Firm,  based upon the assertion of a deficiency by the Internal  Revenue Service
against either the Company or the Participant which the Accounting Firm believes
has a high probability of success  determines that an Overpayment has been made,
any such Overpayment paid or distributed by the Company to or for the benefit of
a  Participant  shall be treated for all  purposes as a loan to the  Participant
which the Participant  shall repay to the Company  together with interest at the
applicable  federal  rate  provided  for in  Section  7872(f)(2)  of  the  Code;
provided,  however,  that no such loan  shall be deemed to have been made and no
amount  shall be payable by a  Participant  to the  Company if and to the extent
such  deemed loan and  payment  would not either  reduce the amount on which the
Participant  is subject to tax under  Section 1 and Section  4999 of the Code or
generate a refund of such taxes.  In the event that the Accounting  Firm,  based
upon  controlling  precedent  or  substantial  authority,   determines  that  an
Underpayment has occurred,  any such Underpayment  shall be promptly paid by the
Company to or for the benefit of the  Participant  together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.

            (e)  All  fees  and  expenses  of  the   Accounting   Firm  in
implementing the provisions of this Section 4.4 shall be borne by the Company.

     4.5 Release and Waiver.  Notwithstanding  any other provision of this Plan,
the right of a Participant to receive  Separation  Benefits  hereunder  shall be
subject to the execution by the  Participant  of a general  release of claims in
favor  of the  Company  in form and  substance  reasonably  satisfactory  to the
Company  (a  "Release");  provided,  that the  Release  shall  not  require  the
Participant to relinquish  all or any portion of his or her Separation  Benefit,
nor to relinquish or waive any rights or benefits described in Section 4.3 above
that have vested as of the Date of Termination, nor impose any noncompetition or
other covenants or obligations on the Participant  that were not in effect prior
to the Date of Termination.

                                     -8-
<PAGE>



     4.6 Payment  Obligations  Absolute.  Upon a Change of  Control,  subject to
Sections  4.4 and 4.5,  the  obligations  of the  Company to pay the  Separation
Benefits  described in Section 4.2 shall be absolute and unconditional and shall
not be  affected  by  any  circumstances,  including,  without  limitation,  any
set-off,  counterclaim,  recoupment, defense or other right which the Company or
any of its Subsidiaries  may have against any  Participant.  In no event shall a
Participant  be obligated to seek other  employment  or take any other action by
way of  mitigation  of the  amounts  payable to a  Participant  under any of the
provisions  of this  Plan,  nor shall the  amount of any  payment  hereunder  be
reduced by any compensation earned by a Participant as a result of employment by
another  employer.  

                                    ARTICLE V
                              SUCCESSOR TO COMPANY

     This Plan  shall  bind any  successor  of the  Company,  its  assets or its
businesses (whether direct or indirect,  by purchase,  merger,  consolidation or
otherwise),  in the same manner and to the same extent that the Company would be
obligated  under this Plan if no succession had taken place.  In the case of any
transaction  in which a successor  would not by the  foregoing  provision  or by
operation of law be bound by this Plan, the Company shall require such successor
expressly  and  unconditionally  to assume  and agree to perform  the  Company's
obligations  under this Plan, in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.  The
term  "Company,"  as used in this Plan,  shall mean the Company as  hereinbefore
defined and any  successor or assignee to the business or assets which by reason
hereof  becomes  bound  by  this  Plan.  

                                   ARTICLE VI
                      DURATION, AMENDMENT AND TERMINATION

     6.1  Duration.  If a Change of Control  has not  occurred,  this Plan shall
expire five years from the Effective Date designated by the Board, unless sooner
terminated  as provided in Section  7.2, or unless  extended  for an  additional
period or periods  by  resolution  adopted by the Board.  If a Change of Control
occurs,  this  Plan  shall  continue  in full  force  and  effect  and shall not
terminate  or expire  until after all  Participants  who become  entitled to any
payments hereunder shall have received such payments in full and all adjustments
required to be made  pursuant to Section 4.4 have been made.  

     6.2 Amendment and Termination. The Plan may be terminated or amended in any
respect by  resolution  adopted by a majority  of the Board,  unless a Change of
Control has previously occurred.  However, in connection with or in anticipation
of a Change of Control, this Plan may not be terminated or amended in any manner
which would adversely affect the rights or potential rights of Participants.  If
a Change of Control  occurs,  the Plan shall no longer be subject to  amendment,
change, substitution,  deletion,  revocation or termination in any respect which
ad versely affects the rights of Participants.

                                     -9-
<PAGE>


     6.3 Form of Amendment. The form of any amendment or termination of the Plan
shall be a written instrument signed by a duly authorized officer or officers of
the Company,  certifying  that the amendment or termination has been approved by
the Board.  An amendment of the Plan in  accordance  with the terms hereof shall
automatically  effect a  corresponding  amendment  to all  Participants'  rights
hereunder.  A termination of the Plan shall in accordance  with the terms hereof
automatically  effect a  termination  of all  Participants'  rights and benefits
hereunder.  

                                  ARTICLE VII
                                 MISCELLANEOUS

     7.1  Indemnification.  If a  Participant  institutes  any  legal  action in
seeking to obtain or enforce,  or is required to defend in any legal  action the
validity or  enforceability  of, any right or benefit provided by this Plan, the
Company or the Employer shall reimburse the Participant for all reasonable costs
and expenses relating to such legal action, including reasonable attorney's fees
and  expenses  incurred by such  Participant,  unless a court or other finder of
fact having  jurisdiction  thereof makes a determination  that the Participant's
position  was  frivolous.  In no event  shall the  Participant  be  required  to
reimburse  the Company for any of the costs and expenses  relating to such legal
action.  The  Company's  obligations  under this  Section 7.1 shall  survive the
termination of this Plan. 

     7.2  Employment  Status.  This  Plan  does not  constitute  a  contract  of
employment or impose on the  Participant  or the Company and its  affiliates any
obligation to retain the Participant as an Employee, to change the status of the
Participant's  employment,  or to change the Company's  policies or those of its
affiliates regarding  termination of employment.  

     7.3 Validity and Severability.  The invalidity or  unenforceability  of any
provision  of the Plan shall not affect the  validity or  enforceability  of any
other  provision of the Plan,  which shall remain in full force and effect,  and
any prohibition or  unenforceability in any jurisdiction shall not invalidate or
render  unenforceable  such provision in any other  jurisdiction.  

     7.4  Governing  Law.  The  validity,   interpretation,   construction   and
performance  of the Plan shall in all  respects  be  governed by the laws of the
State of New York, without reference to principles of conflict of law.

                                    -10-