Exhibit 10(iii)43 (CH ENERGY GROUP LOGO)May
30, 2007    Table of ContentsSection
  I.

Objectives
3II.

Overview
5III.

Establishing Financial and Operating Goals
8IV.

Individual Contributor Evaluation
10V.

Calculating the Annual Incentive
  Payment
11Exhibit
  I

2007 STI Targets
12I. ObjectivesConsistent
  with our emphasis on pay for performance incentive
  compensation programs, we have established the Executive Annual Incentive
  Plan under which our executive officers are eligible to receive annual
  incentive cash payments based on
  performance against annual established performance targets. The annual
  incentive is designed to reward achievement of
  each years business plan objectives in a manner consistent with achievement of the Corporations strategy
  of achieving long-term shareholder value.In
  order to ensure that our compensation package is weighted heavily towards pay for performance, the annual
  incentive for 2007 represented from 20% to 60% of an executives
  base salary (assuming payout at the target level), depending on the
  executives level of responsibility. Moreover, annual incentives are included in an executives final average pay for purposes of determining his/her
  retirement benefits and are included in the formula for calculating
  severance benefits in the event of a
  change in control.Under
  the Executive Annual Incentive Plan, our executives have the opportunity to earn targeted
  incentive cash payments that are calculated as a
  percentage of each persons annual base
  salary. These percentages are developed by the CH Energy Groups Compensation Committee (the Committee),
  and approved by the independent Directors on our Board
  of Directors, according to each persons position and level of responsibility.
  Annual incentive award opportunities for our executives, in the aggregate, are targeted to result in cash payments
  equal to the market median of our comparator groups assuming our target business objectives, which are primarily
  quantitative and financial in nature, are achieved. Performance is measured
  according to levels established each year for threshold performance, targeted performance, and superior
  performance. The performance levels are established so that target attainment
  is not assured. Instead, our
  executives are required to demonstrate
  significant effort, dedication, and achievement to attain payment for performance at target or
  above.After
  the end of each calendar year, management assesses the performance of the Corporation for each
  performance target and calculates the annual incentive amounts for the prior
  year. These assessments and calculations
  are verified for accuracy each year
  by the Hay Group. The Compensation Committee then- 3 -

reviews the verified assessments and calculations and
  approves the resulting annual incentive amounts. The incentive compensation opportunity will vary, from 0% to 150% of
  the targeted percentage of base salary, according to the
  level of overall corporate performance achieved
  for the year relative to the established
  performance targets.The annual incentive amounts for each executive may be
  adjusted upwards or downwards by up to 50% based upon the CEO and/or the Committees assessment of the individuals
  performance. Such adjustments, if made, are based
  on an evaluation of each officers contribution to achieving corporate
  opportunities and meeting corporate challenges, as well
  as an evaluation of the quality of  the individuals performance in exercising
  responsibility described in his/her position
  description.Administration

The plan shall
  be administered by CHEG management under the direct supervision and approval of CHEGs Board of
  Directors.The plan is based on annual performance and requires
  that the participant be an active employee of
  CH Energy Group, Inc. (CHEG) or its
  subsidiaries or properties at the end of the calendar
  year during which performance goals have been set and results
  have been evaluated, except in the case of death, disability or normal retirement, the incentive opportunity
  will be prorated and the evaluation of performance against both
  quantitative goals and subjective goals
  will be at the sole discretion of Board of Directors and the CEO.Goals shall be agreed upon by the Board of Directors and
  be documented in writing no later than
  February 1 of each year.Performance evaluations and
  incentive award payments shall be completed and delivered to the
  participant no later than March 1 of the
  following year.- 4 -

II. Overview of the PlanIncentive
OpportunityNotwithstanding
  the above statement, the board, at its sole discretion, may
  increase the calculated incentive amount or reduce it to zero. The calculated maximum amount may be exceeded should the directors
deem that the
  participants or companys
  performance should merit additional compensation.The
  board, at its sole discretion, may eliminate any or all of the annual awards under
  this plan in response to a major employee or public safety occurrence that
  resulted in a death or serious injury or a major public incident that
  reflected poorly on the companys image or public trust.Target
and Maximum
Incentive
Schedule

The
  following chart specifies the targeted and maximum incentive opportunity
  as a percent of base salary for each participant.Allocation
of Incentive 
Opportunities

Percent
of Base SalaryOfficer
Level
Target 
Incentive
Maximum IncentiveCEO
60%
90%Senior
Officers
40%
60%President of Griffith
40%
60%SVP
30%
45%Vice
Presidents
25%
37.5%AVP/Other
Officers
20%
30%The
  incentive opportunity is divided among various segments with varying weights
  for each segment depending on the participants business unit affiliation.
  Executives at CHEG or one of the business units may have their incentive
  opportunity tied to some or all of the following categories. The categories
  are:1.
Corporate
Financial Performance: Financial and investment performance goals
approved by The Board of Directors for CHEG or its subsidiaries or business units.- 5 -

2.
The operation of CHGE against goals
  approved by the Board of Directors.3.
The operational performance
  of CHEC or a business unit of CHEC against milestones approved by the Board of Directors.4.
A
  subjective evaluation, recommended by the CEO and/or the
Compensation Committee and approved by the
  Board, of the participants overall contribution to the corporations performance based upon the
  Committees assessment of the individuals
  performance. Such adjustments, if made, are
  based on an evaluation of each officers contribution to achieving corporate opportunities and meeting
  corporate challenges, as well as an evaluation of the
  quality of the individuals
  performance in exercising responsibility described in his position description.- 6 -

Each of the incentive opportunities are measured,
 evaluated and rewarded independently
 although there are interconnections between
 each of them. The allocation and weighting of the targeted incentive
 opportunity and the assigned STI Target Groupings are as follows.Performance Category

CH Energy Group

CHG&E

GriffithCorporate Financial Performance EPS - CH Energy Group

100%

0%

0%Redeployment of Capital Outside of CHG&ECHG&E Performance

0%

100%

0%Griffith

0%

0%

100%The annual incentive amounts
 for each executive officer may be
 adjusted upwards or downwards by up to 50% based upon the Committees
 assessment of the individuals
 performance. Such adjustments, if
 made, are based on an evaluation
 of each officers contribution to achieving corporate opportunities and meeting corporate challenges, as well as an evaluation of the quality of the individuals performance in exercising responsibility described in his position
 description.

+/-50%

+/-50%

+/-50%2007STI Target GroupingCH Energy Group
CHG&E
GriffithSV
 Lant
CE
 Meyer
WR GroftCM
 Capone
CA FreniJJ
 DeVirgilio
DD
 VanBurenDS
 Doyle
JP LovetteSA Renner
TC
 BrocksML
 MosherKJ WrightPE Haering- 7 -

III. Establishing Financial andOperating Goals and
MilestonesAgreeing on
 and Defining 
 Operating Goals

Annually, the CEO and the Board
 will agree on one or several critical
 financial and/or operating goals to be achieved in the coming year by CH Energy Group, Inc., CHGE
 and/or CHEC.The Goal
 Definition Process

Annually, the CEO and the
 board or its designated committee will
 reach an agreement on several parameters for each goal or goals specified:
The definition of the
 measurement involved
The relative weight assigned to
 that goal for each category of executive.
Three performance benchmarks for each goal:
Threshold performance
Targeted (or expected) performance
Superior performanceWherever possible, goals should
 be as definitive and quantitative as
 possible.The current years Goals are
 attached as Exhibit I.- 8 -

Calculating a
 Weighted 
 Performance Grade

Each of the goal-based
 performances would be evaluated at the end of the year and evaluation %
 approved by the committee. The relationship
 between performance and % award is as follows:     Below Threshold  0%     Threshold   50%     Targeted  100%     Superior  150%     Above Superior  150%For performances between these benchmarks, a
 fractional % would be given based on a
 linear interpolation of the measurement
 and the % award. For example, if the performance were exactly midway
 between Targeted and Superior, then 125% of
 Target (midway between 100 and 150 %) would be awarded.Each performance category has
 been assigned a weighting. These have
 been specified in Section II of this document. For purposes of calculating an
 incentive, the % earned in each category is then weighted based on the
 weighting assigned to the category.- 9 -

IV.
Individual
 Contributor EvaluationIntent of this Element
The
 annual incentive amounts for each executive officer may be adjusted
 upwards or downwards by up to 50% based upon the Committees assessment of the individuals performance. Such adjustments, if made,
are
 based on an evaluation of each
 officers contribution to achieving corporate
 opportunities and meeting corporate challenges, as well as an evaluation of the quality of the
 individuals performance in
 exercising responsibility described in his position description. This incentive opportunity is intended to provide the CEO and
Compensation Committee with flexibility
 to reflect the participants performance in areas other than those directly quantified in the previous incentive elements. Included
in the considerations for
 this incentive would be the
 following:An assessment of the quality of performance relative
 to the major responsibilities identified in the position description.An assessment of the contribution made toward
 advancing corporate projects and priorities included in the business plan for the year and/or
 the contributions made toward effectively responding to emerging issues during the year.- 10 -

V.
Calculating the
 Annual Incentive PaymentCalibration of the IncentiveAward
For all executives the weighting for this segment is
 +/- 50% of the incentive
 opportunity. The targeted evaluation is 0%.Calculating the Incentive PaymentThe steps used to convert the various weighted average
 % earned are as follows:1.
Calculate the evaluation % for each performance
 category.2.
Convert the evaluation % based on the weighting for
 each category.3.
Add the weighted evaluation percentages for all
 categories to determine the award percentage.4.
Adjust the award percentage by +/- 50 % for the
 individual contribution evaluation and apply this amount to the incumbents salary at
 the beginning of the year to arrive at the incentive payment to be made.- 11 -

EXHIBIT I

Revision  May 30, 2007(Revisions in Bold Type)December
15, 2006 FINAL

2007 STI
Targets

Target
Weight
Threshold
Target
SuperiorCH
 Energy GroupEPS4,
 6
75
%
$2.48
$2.68
$2.88Redeployment of
Capital2,5Outside of CHGE
25
%
$15 Million
$20 Million
$25 MillionCHGE
 EPS4
60
%
$1.94
$2.04
$2.14Customer Satisfaction -
 JD Power 3
20
%
7th of 15 
 Companies
 
 or 53rdPercentile
Top Third
Top QuartileReliability
 (SAIF1)
20
%
1.50
LT 1.45 (JP Penalty Level)
1.40GriffithEPS4
60
%
$.20
$.24
$.28Acquisitions2,5
20
%
$3 Million
$5 Million
$10 MillionAdditional
 Residential 
 Customers
 - Automatic 
 Delivery
10
%
0
600
1,200Delivery
 Efficiency1
10
%
11.2¢
11.0¢
10.6¢1 -
Total
 Delivered Expense/Total Delivered Gallons.2 -
Based
 on dollars deployed. Performance of investments will be tracked in subsequent
 years vs. projections at time of commitment. Variations from projections will
 be considered in subsequent years, when relevant, in determining individual
 contributor adjustments to STI awards (±50%).3 -
Versus
 eastern region.4 -
Normalized
 for heating and cooling degree days, both revenue and expense and major
 storms.5 -
Includes
 both tuck-ins and expansions closed during the year.6 -
Net of interest income.- 12 -