CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                284 SOUTH AVENUE
                        POUGHKEEPSIE, NEW YORK 12601-4879

                                                                   March 1, 1999

To the Holders of Common Stock:

     The annual meeting of shareholders will be held at the Corporation's office
in  Poughkeepsie,  N.Y. on April 27, 1999. A formal Notice of the Annual Meeting
and Proxy Statement are attached hereto.

     We request that you sign,  date and mail the enclosed  proxy card promptly.
Prompt return of your voted proxy will reduce the cost of further mailings.  You
may revoke  your voted  proxy at any time prior to the meeting or vote in person
if you attend the meeting.

     Last year, proxies were received from shareholders  representing 85% of the
outstanding  common  stock.  We  hope  that an  equally  fine  response  will be
forthcoming this year.

     You are  cordially  invited to attend the annual  meeting in person.  It is
always a pleasure for me and the other members of the Board of Directors to meet
with our shareholders. We look forward to greeting as many of you as possible at
the meeting.

                                               John E. Mack III
                                               CHAIRMAN OF THE BOARD


<PAGE>


                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                284 SOUTH AVENUE
                        POUGHKEEPSIE, NEW YORK 12601-4879

--------------------------------------------------------------------------------
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------------------------------------------------------------------

To the Holders of Common Stock:

     NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of the
Central Hudson Gas & Electric Corporation will be held:

TIME ......................   10:30 AM, on Tuesday, April 27, 1999

PLACE .....................   Office of the Corporation
                              284 South Avenue
                              Poughkeepsie, New York 12601

ITEMS OF BUSINESS ........   (1)  To elect directors for the ensuing year;
                             (2)  To ratify the appointment of
                                  PricewaterhouseCoopers LLP as independent
                                  accountants for the year 1999; and
                             (3)  To take action upon any other matters that may
                                  properly come before the Meeting

RECORD DATE ...............  Holders of Common Shares of Record on the close of
                             business March 1, 1999 are entitled to vote at the
                             Meeting.

ANNUAL REPORT .............  The Annual Report and Form 10K of the Corporation
                             for 1998, which is not a part of the proxy
                             soliciting material, is enclosed.

PROXY VOTING ..............  It is important that your Shares be represented and
                             voted at the Meeting. Please MARK, SIGN, DATE AND
                             RETURN PROMPTLY the enclosed proxy card in the
                             postage-paid envelope furnished for that purpose.
                             Any proxy may be revoked in the manner described in
                             the accompanying Proxy Statement at any time prior
                             to its exercise at the Meeting.

                                             By Order of the Board of Directors,

                                                                  STEVEN V. LANT
                                              CHIEF FINANCIAL OFFICER, TREASURER
                                                         AND CORPORATE SECRETARY

March 1, 1999


<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
Proxy Statement ...........................................................    1
Shareholders Entitled to Vote .............................................    1
Proxies ...................................................................    1
Cost of Proxy Solicitation ................................................    1
Submission of Shareholder Proposals .......................................    1
Shareholder Communications ................................................    1
Security Ownership of Directors and Officers ..............................    2
Section 16(a) Beneficial Ownership Reporting Compliance ...................    2
Ratification of Appointment of Independent Accountants ....................    2
Election of Directors .....................................................    4
Board of Directors and Committees .........................................    7
Meetings and Attendance ...................................................    7
Committee on Audit ........................................................    7
Committee on Compensation/Interlocks and Inside Participation .............    7
Compensation of Directors and Officers of the Board .......................    7
Executive Compensation ....................................................    9
Summary Compensation Table ................................................    9
Pension/Deferred Compensation Plans .......................................   10
Employment Contracts and Termination of Employment and
     Change-in-Control Arrangements .......................................   10
Report on Executive Compensation ..........................................   12
Performance Graph .........................................................   15
Other Matters .............................................................   16


<PAGE>


                                 PROXY STATEMENT

     The  enclosed  proxy is being  solicited  by the Board of  Directors of the
Corporation  for use in connection with the annual meeting of shareholders to be
held on April 27, 1999.  This proxy statement and enclosed proxy are first being
sent to  shareholders  on or about  March 1, 1999.  The  mailing  address of the
principal executive office of the Corporation is 284 South Avenue, Poughkeepsie,
New York 12601-4879.

SHAREHOLDERS ENTITLED TO VOTE

     The  record of  shareholders  entitled  to notice  of,  and to vote at, the
annual  meeting  was taken at the close of  business  on March 1, 1999.  At that
date, the Corporation had outstanding  16,862,087  shares of Common Stock ($5.00
par value) of the Corporation  ("Common  Stock").  Each share of Common Stock is
entitled to one vote.  No other class of  securities is entitled to vote at this
meeting.

PROXIES

     Any shareholder giving the enclosed proxy has the right to revoke it at any
time before it is voted. To revoke a proxy,  the shareholder  must file with the
Secretary of the  Corporation  either a written  revocation  or a duly  executed
proxy bearing a later date.

     The  proxies  given  pursuant  to this  solicitation  will be  voted at the
meeting or any adjournment  thereof.  Abstentions and broker non-votes are voted
neither "for" nor  "against," and have no effect on the vote, but are counted in
the determination of a quorum.

COST OF PROXY SOLICITATION

     The cost of preparing,  printing and mailing the notice of meeting,  proxy,
proxy  statement  and  annual  report  will be borne by the  Corporation.  Proxy
solicitation  other than by use of the mail may be made by regular  employees of
the Corporation by telephone and personal solicitation. Banks, brokerage houses,
custodians,  nominees  and  fiduciaries  are  being  requested  to  forward  the
soliciting  material to their  principals  and to obtain  authorization  for the
execution of proxies,  and may be reimbursed  for their  out-of-pocket  expenses
incurred in that connection. In addition, the Corporation has retained D.F. King
& Co., Inc. of New York, New York, a proxy solicitation organization,  to assist
in the  solicitation  of proxies.  The fee of such  organization  in  connection
therewith is estimated to be $7,000, plus reasonable out-of-pocket expenses.

SUBMISSION OF SHAREHOLDER PROPOSALS

     Proposals  of  shareholders  intended  to be  presented  at the 2000 annual
meeting of the Corporation [or the 2000 annual meeting of CH Energy Group,  Inc.
("Holding  Company"),  if the  Holding  Company  restructuring  approved  by the
shareholders in September 1998 is effected] to be included in the proxy material
relating to that  meeting  must be received by the  Corporation,  or the Holding
Company, as the case may be, by October 30, 1999.

SHAREHOLDER COMMUNICATIONS

     Highlights of the 1999 annual meeting will be included on the Corporation's
website  (www.cenhud.com)  and in the  Corporation's  or the  Holding  Company's
August 1, 1999 Report to Shareholders.

     Shareholders'  comments related to any aspect of the Corporation's business
are  welcome.  Space  for  comments  is  provided  on the  proxy  card  given to
shareholders  of  record.   Other   shareholders  may  submit  comments  to  the
Corporation, or to the Holding Company when the Holding Company restructuring is
effected,  in care of the  Chief  Financial  Officer,  Treasurer  and  Corporate
Secretary.  Although  comments are not answered on an individual  basis, they do
assist the Directors and management in addressing the needs of shareholders.

                                       1

<PAGE>

SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS

     The following table lists the number of shares of Common Stock beneficially
owned by all the  directors,  and  nominees  for  election  as  directors,  each
executive officer listed in the table under the caption "Executive Compensation"
and by all directors and executive officers of the Corporation as a group:

                                                     NO. OF            % OF
NAME                                                 SHARES(1)        CLASS(2)
-----                                                ---------      ------------
Jack Effron ...................................       2,725         Less Than 1%
Frances D. Fergusson ..........................       2,069         Less Than 1%
Heinz K. Fridrich .............................       2,968         Less Than 1%
Edward F. X. Gallagher ........................       2,506         Less Than 1%
Paul J. Ganci .................................       9,701(3)      Less Than 1%
Charles LaForge ...............................       4,085         Less Than 1%
John E. Mack III ..............................      11,638(3)      Less Than 1%
Edward P. Swyer ...............................       8,325         Less Than 1%
Joseph J. DeVirgilio, Jr ......................       1,483         Less Than 1%
Carl E. Meyer .................................       1,658         Less Than 1%
Allan R. Page .................................       2,685         Less Than 1%
All directors and executive officers
  as a group (11 persons) .....................      49,843         Less Than 1%

----------
(1)  Based on  information  furnished to the  Corporation  by the  directors and
     executive officers as of December 31, 1998.
(2)  The percentage  ownership  calculation  for each owner has been made on the
     basis that there are outstanding  16,862,087  shares of Common Stock on the
     record date.
(3)  Includes shares owned by the respective spouses of the named individuals as
     follows:  Mrs.  Mack--873 shares and Mrs.  Ganci--2,062  shares. The shares
     owned by Mrs. Mack and Mrs. Ganci are considered to be  beneficially  owned
     by Mr. Mack and Mr. Ganci, respectively, only for the purpose of this proxy
     statement and the  respective  named  individuals  disclaim any  beneficial
     interest in such shares for all other purposes.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a)  of  the  Securities  Exchange  Act  of  1934  requires  the
Corporation's  officers and  directors and persons who own more than ten percent
of a  registered  class  of  the  Corporation's  equity  securities  ("Reporting
Persons")  to file  initial  reports  of  ownership  and  reports  of changes in
ownership with the Securities and Exchange  Commission  ("SEC") and the New York
Stock  Exchange.  Such  Reporting  Persons are  required by SEC  regulations  to
furnish the Corporation  with copies of all Section 16(a) forms they file. Based
solely on a review of the copies of such forms  furnished to the Corporation and
written  representations  from the  Corporation's  officers and  directors,  all
requisite filings were made on a timely basis in 1998.

RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS

     The Board of Directors has appointed the firm of PricewaterhouseCoopers LLP
as independent  accountants for the Corporation for the year 1999 and recommends
to shareholders ratification of such appointment.

     The appointment of the independent  accountants is approved annually by the
Board of Directors and is based on the recommendation of the Committee on Audit,
which reviews the  qualifications  of independent  accountants and which reviews
and  approves  the  audit  scope,  reasonableness  of fees and also the types of
non-audit services for the coming year.

                                       2

<PAGE>


     While there is no legal requirement that this appointment be submitted to a
vote of  shareholders  for  ratification,  such  action  is being  requested  in
response  to past  suggestions  by  shareholders  and also  because the Board of
Directors  believes that the selection of the  independent  accountants to audit
the books,  records and accounts of the Corporation is of sufficient  importance
to seek  such  ratification.  If this  action  were not  ratified,  the Board of
Directors  would,  in due course and having  regard for the  requirements  of an
orderly transition, select other independent accountants upon the recommendation
of the Committee on Audit.

     Representatives of PricewaterhouseCoopers LLP will be present at the annual
meeting of shareholders and will have an opportunity to make a statement if they
desire to do so. They will be available to respond to appropriate questions.

                                        3

<PAGE>


                              ELECTION OF DIRECTORS

     Eight  directors  are to be elected by a plurality of the votes cast at the
annual  meeting of  shareholders  by holders of shares  entitled  to vote.  Such
directors  shall hold office until the next annual  meeting of  shareholders  or
until  their  successors  are duly  elected and  qualify.  Mr. John E. Mack III,
currently  Chairman of the Board,  has indicated that he will retire as Chairman
of the Board as of the date of the  annual  meeting of  shareholders,  April 27,
1999. If reelected by the  shareholders  at the annual meeting of  shareholders,
Mr. Mack will continue as a director of the Corporation.  It is the intention of
the Board of Directors to elect,  effective April 27, 1999, Mr. Paul J. Ganci as
Chairman  of the Board  and  Chief  Executive  Officer.  The Board of  Directors
proposes  the  following  nominees,  all  of  whom  are  now  directors  of  the
Corporation, and recommends a vote in favor thereof:

<TABLE>
<CAPTION>

                           PRINCIPAL OCCUPATION OR EMPLOYMENT                                      PERIOD OF
                           AND POSITIONS AND OFFICES WITH THE       BUSINESS EXPERIENCE           SERVICE AS
NAME AND AGE                         CORPORATION(1)              DURING PAST FIVE YEARS(1)      DIRECTOR BEGAN
-------------              ----------------------------------    -------------------------      --------------
<S>                        <C>                                   <C>                                 <C> 
Jack Effron ............   President of Efco Products, a         Present positions                   1987
  65                         bakery ingredients corporation;
[PHOTO]                      Chairman of the St. Francis
                             Health Care Foundation; Chairman
                             of the Chief Executive's Network
                             for Manufacturing of the Council
                             of Industry of Southeastern New
                             York Poughkeepsie, NY

Frances D. Fergusson ...   President and Professor of Art,       Present positions                   1993
  54                         Vassar College; Member, Board of
[PHOTO]                      Trustees of the Ford Foundation
                             and Chair of its Education,
                             Media, Arts and Culture
                             Committee; Trustee of the Mayo
                             Foundation and Chair of its
                             Development Committee; Trustee of
                             Historic Hudson; Director, Marine
                             Midland Bank, N.A. and Chair of
                             its Personnel Committee
                             Poughkeepsie, NY

Heinz K. Fridrich ......   Courtesy Professor, University of     Present position since             1988
  65                         Florida at Gainesville; Chairman      April 1995; Courtesy
[PHOTO]                      of Committee on Audit Fernandina      Professor, University of
                             Beach, FL                             Florida at Gainsville
                                                                   since 1994; Board of
                                                                   Trustees, Mount St. Mary
                                                                   College

</TABLE>

                                       4

<PAGE>

<TABLE>
<CAPTION>

                           PRINCIPAL OCCUPATION OR EMPLOYMENT                                      PERIOD OF
                           AND POSITIONS AND OFFICES WITH THE       BUSINESS EXPERIENCE           SERVICE AS
NAME AND AGE                         CORPORATION(1)              DURING PAST FIVE YEARS(1)      DIRECTOR BEGAN
-------------              ----------------------------------    -------------------------      --------------
<S>                        <C>                                   <C>                                 <C> 
Edward F. X. Gallagher .   Owner of Gallagher Transportation     Present positions                  1984
  65                         Services, a group of companies
[PHOTO]                      engaged in the sale and leasing
                             of commercial motor vehicles, the
                             distribution of wholesale
                             automotive parts and the
                             operation, under the trade name
                             of Leprechaun Lines and Tours, of
                             several bus companies Newburgh,
                             NY

Paul J. Ganci ..........   President and Chief Executive         Present position since             1989
  60                         Officer of the Corporation            August 1, 1998-
[PHOTO]                      Poughkeepsie, NY                      President and Chief
                                                                   Operating Officer of
                                                                   the Corporation,
                                                                   December 1993-
                                                                   July 31, 1998

Charles LaForge ........   President of Wayfarer Inns and        Present positions                  1987
  68                         owner of the Beekman Arms in
[PHOTO]                      Rhinebeck, NY; Trustee of Rondout
                             Savings Bank in Kingston, NY;
                             Trustee emeritus of the Culinary
                             Institute of America in
                             Poughkeepsie, NY Rhinebeck, NY

</TABLE>

                                       5

<PAGE>

<TABLE>
<CAPTION>

                           PRINCIPAL OCCUPATION OR EMPLOYMENT                                      PERIOD OF
                           AND POSITIONS AND OFFICES WITH THE       BUSINESS EXPERIENCE           SERVICE AS
NAME AND AGE                         CORPORATION(1)              DURING PAST FIVE YEARS(1)      DIRECTOR BEGAN
-------------              ----------------------------------    -------------------------      --------------
<S>                        <C>                                   <C>                                 <C> 
John E. Mack III .......   Chairman of the Board of the          Present positions since            1981
  64                         Corporation; Chairman of the          August 1, 1998, except
[PHOTO]                      Executive, Finance and Retirement     Chairman of the Board
                             Committees Poughkeepsie, NY           and Chief Executive
                                                                   Officer, December 1993,
                                                                   -July 31, 1998

Edward P. Swyer ........   President of the Swyer Companies,     Present position                   1990
  49                         a real estate firm engaged in the
[PHOTO]                      construction, development and
                             management of commercial
                             properties in the Capital
                             District Region Albany, NY

</TABLE>

-------
(1) Based on  information  furnished  to the  Corporation  by the nominees as of
December 31, 1998.

     IT IS THE  INTENTION  OF THE  PERSONS  NAMED IN THE PROXY FORM TO VOTE SUCH
PROXIES FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ABOVE.  ALTHOUGH THE
BOARD OF DIRECTORS DOES NOT CONTEMPLATE  THAT ANY OF THE NOMINEES WILL BE UNABLE
TO SERVE,  SHOULD SUCH A SITUATION ARISE PRIOR TO THE MEETING,  THE PROXIES WILL
BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS ACTING THEREUNDER.

                                       6

<PAGE>


                        BOARD OF DIRECTORS AND COMMITTEES

MEETINGS AND ATTENDANCE

     During  1998,  there  were 12  meetings  of the  Board  of  Directors.  All
directors  attended at least 75% of the  aggregate  of the total number of Board
meetings  and  meetings of  Committees  of the Board on which they  served.  The
average attendance at all such meetings during 1998 was 93%.

     The five standing Committees of the Board of Directors are the Committee on
Audit,  the Committee on Compensation and Succession,  the Executive  Committee,
the Committee on Finance and the Retirement Committee.  Information with respect
to the Committee on Audit and the Committee on  Compensation  and  Succession is
set forth below.

COMMITTEE ON AUDIT

     The members of this Committee are Messrs.  Fridrich  (Chairman) and LaForge
and Dr.  Fergusson.  The Committee had three  meetings  during 1998,  which were
attended  by  representatives  of  the  Corporation's  independent  accountants,
PricewaterhouseCoopers   LLP.  The  Committee   examines  the  adequacy  of  the
Corporation's  internal  audit  activities,  reviews  the  scope of the audit by
PricewaterhouseCoopers  LLP and related matters pertaining to the examination of
the  financial  statements,  reviews  the  nature  and  extent of any  non-audit
services  provided by the  Corporation's  independent  accountants,  consults at
least  three  times a year with them and makes  recommendations  to the Board of
Directors  with respect to the foregoing  matters as well as with respect to the
appointment of the Corporation's independent accountants.

COMMITTEE ON COMPENSATION AND SUCCESSION/INTERLOCKS AND INSIDER PARTICIPATION

     The members of this Committee ("Compensation Committee") are Messrs. Effron
(Chairman) and Swyer and Dr.  Fergusson.  The  Compensation  Committee had three
meetings during 1998. The Compensation Committee considers and recommends to the
Board of Directors the  compensation  (and special terms, if any, of employment)
of directors, officers of the Board of Directors and the salaries of officers of
the Corporation. The Compensation Committee also considers and recommends to the
Board of Directors the  candidates to be nominated for election to the Board and
candidates  for  appointment  by the Board as officers of the  Corporation.  The
Compensation Committee is charged with receiving  recommendations of nominees by
shareholders  for election of the Board of Directors and reviewing and comparing
the qualifications of such nominees with those of other potential nominees.  Any
shareholder  desiring to submit the name of a nominee  should send it,  together
with a  statement  of  the  candidate's  qualifications,  to  the  Committee  on
Compensation  and  Succession,  c/o the Chief Financial  Officer,  Treasurer and
Corporate  Secretary,  Central  Hudson  Gas &  Electric  Corporation,  284 South
Avenue, Poughkeepsie, New York 12601-4879.

     No Compensation Committee interlock relationship existed in 1998.

COMPENSATION OF DIRECTORS AND OFFICERS OF THE BOARD

     Each non-employee  member of the Board of Directors  ("Outside  Directors")
(Messrs. Mack and Ganci are employee-directors),  receives an annual retainer of
$15,000,  $750  for  attendance  at each  meeting  of the  Board  and  $650  for
attendance  at each meeting of any committee of the Board of which such director
is a member if such  meeting  is held on the same day as a meeting of the Board,
and $750 for such committee  meeting if held on a day other than that on which a
Board  meeting  is held.  Only  Outside  Directors  serving as  chairpersons  of
Committees  of the Board  received  additional  annual  compensation  in 1998 as
follows: Mr. Effron, as Chairman of the Compensation Committee--$2,500;  and Mr.
Fridrich, as Chairman of the Committee on Audit--$2,500.

                                       7

<PAGE>


DIRECTORS DEFERRED COMPENSATION PLAN

     The Corporation's  Directors' Deferred Compensation Plan applies to Outside
Directors  of the  Corporation,  and  permits a director to elect at any time or
from  time to time to  defer  all or part of such  director's  compensation  for
services  thereafter  rendered to the  Corporation.  For  purposes of such Plan,
compensation  is  defined  to  include  the  amount  of  money to be paid to the
director for serving as a member of the Board of Directors  and any committee of
the Board, for serving as an officer of the Board of Directors and any committee
of the Board and for any other services rendered  individually by agreement with
the Corporation. A director's compensation deferred in accordance with such Plan
is paid to said  director  (together  with an  interest  equivalent  computed by
applying  monthly a rolling  average of the United States  Treasury Bill rate to
the amount of compensation  then deferred from the time the  compensation  would
ordinarily  have been paid until the time it is  actually  paid) at such time as
the  director  ceases  being a member of the Board of Directors or at such other
time after  ceasing to be a director as the director may specify when making the
original  election  to defer  compensation.  The  commencement  of such  pay-out
period,  however,  must be at least one year  after the  effective  date of such
election.

STOCK PLAN FOR OUTSIDE DIRECTORS

     In  response  to  suggestions  by  shareholders  that at least a portion of
compensation of the Outside  Directors of the Corporation be made in the form of
Common  Stock,  the Board of  Directors  adopted,  effective  January 1, 1996, a
"Stock Plan for Outside  Directors"  ("Stock Plan").  The Stock Plan is not only
responsive  to  shareholders'  interests,  but will also  continue to enable the
Corporation to retain and attract qualified Outside Directors.

     Pursuant to the terms of the Stock Plan, for each full quarterly  period of
each year of service,  an Outside Director is credited with 25 Share Equivalents
(a Share Equivalent being equal to one share of Common Stock). Generally,  Share
Equivalents  credited to an Outside  Director are  distributed  quarterly to the
participant in the form of shares of Common Stock. In addition,  when an Outside
Director  ceases to be a director for any reason,  other than removal for cause,
that director will receive,  quarterly,  25 shares of Common Stock for each full
quarterly  period (but not beyond 40 such  periods)  during which that  director
served as an  Outside  Director,  including  periods  prior to  January 1, 1996;
however, no such distribution will be made after that director's death.

                                       8

<PAGE>


                             EXECUTIVE COMPENSATION

     The  Summary  Compensation  Table set  forth  below  includes  compensation
information  on the  Chairman  of the Board of the  Corporation  and each of the
Corporation's  four most highly  compensated  executive officers whose salary in
1998 exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                               ANNUAL COMPENSATION
                                                                     -----------------------------------------
NAME AND PRINCIPAL POSITION                                YEAR      SALARY(1)       BONUS     COMPENSATION(2)
---------------------------                                ----      --------      ---------   ---------------
<S>                                                        <C>       <C>           <C>            <C>   
John E. Mack III,......................................    1998      $391,580      $36,000(3)     $5,000
  Chairman of the Board                                    1997       355,000       34,000(3)      4,750
                                                           1996       336,250       19,500(3)      4,750

Paul J. Ganci,.........................................    1998       322,500       22,800(3)      5,000
  President and Chief Executive Officers                   1997       280,250       21,280(3)      4,750
                                                           1996       263,250       10,200(3)      4,750

Carl E. Meyer,.........................................    1998       212,000        3,582(4)      5,000
  Executive Vice President--Operations                     1997       186,750        6,331(4)      4,750
                                                           1996       176,625        1,024(4)      4,750

Allan R. Page, ........................................    1998       189,199        3,180(4)      5,000
  Executive Vice President Energy Resources &              1997       165,750        6,331(4)      4,750
    Development                                            1996       156,000          991(4)      4,750

Joseph J. DeVirgilio, Jr...............................    1998       162,870        2,925(4)      5,000
  Senior Vice President Corporate Services &               1997       152,720        6,194(4)      4,750
    Administration                                         1996       146,860          966(4)      4,750

</TABLE>

----------
(1)  This  base  salary  amount  includes  amounts  deferred   pursuant  to  the
     Corporation's  (i)  Flexible  Benefits  Plan,  which  Plan  is  established
     pursuant to Section 125 of the Internal  Revenue  Code of 1986,  as amended
     ("Code")  which  permits  those  electing to  participate  to defer salary,
     within specified  limits,  to be applied to qualified  medical and/or child
     care benefit payments and (ii) Savings  Incentive Plan ("SIP"),  a "defined
     contribution" plan which meets the requirements of the Code, including Code
     Section 401(k),  which, among other things,  permits,  within  limitations,
     participants  to tax-defer base salary,  and,  within limits,  provides for
     Corporation contributions to participants.

(2)  These are amounts  contributed  by the  Corporation  for the benefit of the
     named individual under the SIP.

(3)  Compensation  paid  pursuant  to the terms of the  Corporation's  Executive
     Incentive  Compensation Plan ("Executive  Incentive Plan"), which terms are
     more  fully   described  below  under  the  caption  "Report  on  Executive
     Compensation--Executive Incentive Plan".

(4)  Compensation  paid  pursuant to the terms of the  Corporation's  Management
     Incentive  Plan,  which  terms are more  fully  described  below  under the
     caption "Report on Executive Compensation--Management Incentive Plan."

                                       9

<PAGE>


PENSIONS/DEFERRED COMPENSATION PLANS

RETIREMENT INCOME PLAN

     The Corporation's  Retirement Income Plan ("Retirement Plan") is a "defined
benefit"  plan,  which meets the  requirements  of the Code,  and applies to all
employees of the Corporation.  In 1998, there were no contributions  made to the
Retirement  Plan as a result of its  full-funding  status for Federal income tax
purposes.  The Retirement Plan provides for retirement  benefits  related to the
participant's   annual  base  salary  for  each  year  of  eligible  employment.
Retirement  Plan benefits  depend upon length of service,  age at retirement and
earnings  during  years  of   participation  in  the  Retirement  Plan  and  any
predecessor  plans.  A  participant's  benefits  under the  Retirement  Plan are
determined as the accumulation,  over that participant's career, of a percentage
of each  year's  base  salary.  For  periods on and after  October 1, 1998,  the
percentage is 2% of base salary,  except that for years in which the participant
is over 50 years of age such  percentage  is increased to 2.5%.  The  Retirement
Plan also  provides a benefit  for  service  prior to October 1, 1998 based on a
percentage of a participant's  average earnings at October 1, 1998 (being 50% of
each of the base  salaries  at  October 1, 1995 and 1998 and 100% of each of the
base  salaries  at  October 1, 1996 and 1997) and the number of years of service
while a member of the  Retirement  Plan prior to October 1, 1998, all subject to
certain limitations.  A cash balance account benefit provided by the Corporation
is also available upon  retirement  under the  Retirement  Plan,  which benefit,
generally,  provides for a credit to those  participants in the Retirement Plan,
on January 1, 1987,  of 10% of their base salary on that date, a credit to those
participants in the Retirement  Plan, on September 30, 1991, of 5% of their base
salary on that date and a further credit to those participants in the Retirement
Plan, on September  30, 1997, of 5% of their base salary on that date,  with, in
all three  cases,  annual  interest  earned  thereon.  While  the  amount of the
contribution  payment or accrual with  respect to a specified  person is not and
cannot readily be separately or individually calculated by the regular actuaries
for the Retirement  Plan,  estimated  annual  benefits under the Retirement Plan
upon  retirement  at age 65 for the  individuals  listed in the table  under the
above caption "Executive Compensation",  assuming continuation of present annual
salaries and giving effect to applicable benefit limitations in the Code, are as
follows: Mr.  Mack--$130,000;  Mr.  Ganci--$130,000;  Mr.  Meyer--$128,685;  Mr.
Page--$125,778 and Mr. DeVirgilio--$130,000.

RETIREMENT BENEFIT RESTORATION PLAN

     Effective  May 1, 1993,  the  Corporation  adopted an  unfunded,  uninsured
pension  benefit  plan  for a  select  group of  highly  compensated  management
employees  called the Retirement  Benefit  Restoration  Plan ("RBRP").  The RBRP
provides an annual  retirement  benefit to those  participants in the Retirement
Plan who hold the following offices with the Corporation: Chairman of the Board,
President and Chief  Executive  Officer,  Vice  President  (including all levels
thereof), Secretary,  Treasurer,  Controller, and Assistant Vice President. Such
benefit  is  equal  to the  difference  between  (i)  that  received  under  the
Retirement  Plan,  giving  effect to applicable  salary and benefit  limitations
under the Code and (ii) that which would have been received under the Retirement
Plan,  without giving effect to such limitations under the Code. The individuals
listed in the table  under the above  caption  "Executive  Compensation"  have a
current salary level which,  if continued to retirement at age 65, would provide
a benefit under the RBRP.  The  estimated  annual  benefits  under the RBRP upon
retirement at age 65 for those  individuals,  assuming the continuation of their
present salaries,  are as follows: Mr. Mack--$110,415;  Mr. Ganci--$85,175;  Mr.
Meyer--$35,588; Mr. Page--$16,552.

EXECUTIVE DEFERRED COMPENSATION PLAN

     The Corporation's  Executive  Deferred  Compensation Plan ("EDCP") covers a
select group of highly compensated management employees as an incentive for them
to remain with the  Corporation.  Under that Plan, an annual benefit is payable,
commencing  on  retirement,  to eligible  participants  (who retire at age 60 or
older  and with 10 or more  years  of  service)  for 10  years of the  following
percentage  of annual base  compensation  at  retirement:  60 to 63--10%;  63 to
65--15%;  65 or over -20%. In view of changes in the Code which became effective
January  1,  1994,   the  EDCP  was  amended  prior  thereto  so  that  eligible
participants,  who reached age 55 at Decem-

                                       10

<PAGE>

ber 31, 1993, are considered to have accrued  benefits under the EDCP as if they
were age 60 and had 10 years of service  with the  Corporation  at December  31,
1993. Upon a Change in Control (as defined in the EDCP) of the Corporation,  all
participants  who have not then  reached age 60 and 10 years of service with the
Corporation,  shall be eligible to receive all accrued benefits at retirement as
if they had reached age 60 and had 10 years of service with the  Corporation  as
of the date of such change in control.  No amounts  were paid under the EDCP for
the  individuals  named  in  the  table  under  the  above  caption   "Executive
Compensation"  for the year 1998.  Estimated annual benefits under the EDCP upon
retirement at age 65 for such named individuals,  assuming continuation of their
present annual salaries, are as follows: Mr. Mack--$80,000;  Mr. Ganci--$67,000;
Mr. Meyer--$43,400; Mr. Page--$38,600; and Mr. DeVirgilio--$32,700.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

     On December  1,1998,  the Corporation  entered into  Employment  Agreements
(each, the "Agreement")  with each of the individuals  listed in the table under
the  above  caption  "Executive  Compensation"  ("Officers").  Until a Change in
Control occurs, each Agreement is automatically renewed for one (1) year on each
July 31 commencing  July 31, 1999,  unless a notice not to extend is given. If a
Change in  Control  (defined  in the  Agreement)  occurs  during  the term of an
Agreement, then the Agreement becomes operative for a fixed three-year period.

     Upon a Change  in  Control,  each  Agreement  provides  generally  that the
Officers' terms and conditions of employment (including position, location, base
salary,  bonus and benefits) will not be adversely  changed during the three (3)
year period after a Change in Control. If the Officer's employment is terminated
by the Corporation  for reasons other than death,  Cause or Disability (as those
terms are  defined in each  Agreement),  by the Officer for Good Reason (as that
term is defined in each Agreement),  by the Officer regardless of reason (during
the 30 day period beginning on the first  anniversary of the Change in Control),
upon certain  terminations prior to a Change in Control or in connection with or
in anticipation of a Change in Control,  the Officer, in addition to all amounts
accrued  to the  date  of his  termination,  will  receive  a  lump-sum  payment
("Lump-Sum  Payment")  equal to the sum of (i) the Officer's base salary through
the date of termination,  (ii) a proportionate  bonus based on the higher of the
Officer's  most recent annual bonus and the Officer's  annual bonus for the last
fiscal year ("Highest Annual Bonus"),  (iii) accrued vacation and (iv) three (3)
times the sum of the  Officer's  base salary and the  Officer's  Highest  Annual
Bonus.  In  addition,  such  Officers  would be entitled to  continued  employee
welfare benefits and to credit for pension purposes for the three (3) years from
the date of such termination.

     Mr. Ganci's  Agreement is  substantially  identical to the other  Officers,
except  that it is  modified  to limit the term of his  Agreement  to his normal
retirement date, May 1, 2003. In addition, Mr. Ganci will not receive a Lump Sum
Payment  if his  employment  is  terminated  at any time on or after a Change in
Control  through May 1, 2003,  by the  Corporation,  for reasons  other than for
Cause or  Disability,  by Mr. Ganci for any reason,  upon  certain  terminations
prior to a Change in  Control  or in  connection  with or in  anticipation  of a
Change in Control. In such case, he will receive all amounts accrued to the date
of his  termination  and will be treated as if he had retired on May 1, 2003 for
all employee welfare benefits of the Corporation.  If Mr. Ganci's  employment is
so terminated for any reason other than by the Corporation for Cause,  Mr. Ganci
or his beneficiaries, as the case may be, will receive collective benefits under
the EDCP, the RBRP and the  Retirement  Plan as if Mr. Ganci had continued to be
employed  through  May 1,  2003,  and as if  his  base  salary  and  other  cash
compensation  had  increased  by 10% annually on each October 1 from the date of
his termination of employment to May 1, 2003.

     In the event any  payments  made to any of the  Officers  on  account  of a
Change in Control,  whether under an Agreement or  otherwise,  would subject the
Officer to the excise tax on certain "excess  parachute  payments" payable under
Code  ss.4999,  or interest or  penalties  with respect to such tax, the Officer
will be entitled to be made whole for the payment of any such taxes, interest or
penalties.  Each  Officer,  while  covered by an  Agreement,  is not entitled to
participate in the  Corporation's  Change-of-Control  Severance  Policy.  In the
event of a Change in Control,  the  Agreements  will  supersede  any  individual
employment and/or severance  agreements entered into by the Corporation with the
Officers, except in certain instances.

                                       11

<PAGE>


     Mr.  Mack's  Agreement  will no longer be  effective  after April 27, 1999,
unless a Change in Control  occurs on or before that date.

REPORT ON  EXECUTIVE COMPENSATION

     The following disclosure is made over the name of each Outside Director, on
the date hereof,  and shall be considered a report of the Outside  Directors and
the Compensation Committee:

     As   described   above  under  the   caption   "Board  of   Directors   and
Committees-Committee  on  Compensation  and  Succession/Interlocks  and  Insider
Participation," the members of the Compensation Committee are Messrs. Effron and
Swyer  and  Dr.  Fergusson.  Among  the  responsibilities  of  the  Compensation
Committee are consideration and  recommendation to the Board of Directors of the
salaries of officers of the  Corporation.  Annual salary  determinations  by the
Board of  Directors  become  effective  as of April 1 of each year and  continue
until the following March 31.

COMPENSATION PHILOSOPHY

     The   Compensation   Committee   based  its  1998  officers'   compensation
recommendations  to the  Board  of  Directors  on an  evaluation  of each of the
following three factors, giving balanced weight to each, which factors reflect a
long-standing executive compensation philosophy of the Corporation:

     (1)  Compensation  comparisons  of  other  comparable  executive  officers.
          Comparisons are made to the compensation of officers of other New York
          State  utilities  and of  other  utilities  with  revenues  and  other
          characteristics  similar  to  those  of the  Corporation,  using  data
          received  from the Edison  Electric  Institute  and the  American  Gas
          Association,  which  utilities are some, but not all, of the utilities
          included on the graph  under the below  caption  "Performance  Graph."
          And, every two years, an executive  compensation study is performed by
          an  independent  consultant  engaged  by  the  Corporation.  The  data
          obtained by these  various  sources  was  evaluated  and  compensation
          levels for the Corporation's officers were established based generally
          on averages of comparative salary ranges.

     (2)  The  experience,  responsibility  and  contribution of each individual
          officer to the Corporation's performance.

     (3)  The incumbent's  performance in carrying out the  responsibilities and
          duties of his or her office, as described below:

     The performance of each officer of the Corporation (other than Messrs. Mack
and  Ganci,  as  discussed  below)  was  also  evaluated,  by  the  Compensation
Committee,  on the basis of how he or she contributed to the extent  applicable,
to furthering the Corporation's mission:

     to provide  customers  with safe,  reliable  utility  service at the lowest
reasonable price;

     to provide a competitive return to the Corporation's shareholders;

     to  provide a safe  working  environment  that  will  attract,  retain  and
motivate employees; and

     to  provide  corporate  resources  to  enhance  the  quality of life in the
Corporation's service territory.

     With the exception of (1) above,  the performance  criteria set forth above
for Mr.  Mack  and each  other  officer  of the  Corporation  were  subjectively
evaluated by the Board of Directors in its deliberations related to compensation
for each  officer,  based on an  assessment  of the  degree  to which  each such
officer (i) met the criteria set forth in his/her position  description and (ii)
accomplished  the  Corporation's  strategic  goals and objectives for which such
officers were responsible.

                                       12

<PAGE>

SECTION 162(M) OF THE CODE

     The  Compensation  Committee and the Board of Directors is aware of and has
considered the qualifying compensation regulations established in Section 162(m)
of the Code, which provides that, unless an appropriate exemption applies, a tax
deduction for the Corporation for remuneration of any officer named in the above
captioned--"Executive  Compensation--Summary  Compensation  Table"  will  not be
allowed to the extent such  remuneration in any taxable year exceeds $1 million.
As no officer of the Corporation  received  remuneration  during the 1998 fiscal
year  approaching  $1 million,  the  Corporation  has not developed an executive
compensation  policy  with  respect  to  qualifying  compensation  paid  to  its
executive officers for deductibility under Section 162(m) of the Code.

MANAGEMENT INCENTIVE PLAN

     The Management  Incentive Plan,  effective January 1, 1991, is a cash bonus
program which bases its awards on the  Corporation  meeting  certain  "Incentive
Goals,"  as such term is  defined in that Plan.  All  management  employees  are
eligible to receive awards except for: (i) the Chairman of the Board (Mr. Mack),
the President and Chief Executive  Officer (Mr. Ganci) 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.

     The  Incentive  Goal  is  established  each  fiscal  year by the  Board  of
Directors.  After the audited  financial results of the Corporation for a fiscal
year have been made public, the Board of Directors of the Corporation determines
whether  or not the  Incentive  Goal has been met for that  fiscal  year,  which
determination  is final. The resulting award is allocated among and paid to each
eligible  management  employee in the same  proportion that each such employee's
compensation  for the fiscal  year bears to base  compensation  paid to all such
eligible management employees for that fiscal year.

EXECUTIVE INCENTIVE PLAN

     The Executive Incentive Plan, established January 1, 1993 and applicable to
Mr. Mack, currently the Chairman of the Board, was amended, effective January 1,
1995, to include Mr. Ganci, currently the President and Chief Executive Officer.

     The  Executive   Incentive  Plan   establishes  the  compensation  for  the
incumbents  in such offices based on two  components:  annual base salary (which
becomes  effective as of April 1 of each year and continues  until the following
March 31) and an incentive feature (which provides an award, as noted below, for
performance for the most recently ended calendar  year).  The  determination  of
annual base salary and  incentive  compensation,  if any, is  determined  by the
Outside Directors,  for Mr. Mack and for Mr. Ganci, by the Outside Directors and
Mr. Mack.

     Under the incentive component of the Executive Incentive Plan, Messrs. Mack
and Ganci have the  opportunity  to earn up to an  additional  10% of their base
salaries,  based on a formula which  measures the  Corporation's  achievement of
goals within the following four categories: (i) shareholder value; (ii) level of
customer electric and gas prices and reliability; (iii) employee safety and (iv)
community involvement.

     A determination as to whether any incentive  compensation is earned is made
within 90 days  after the end of each  calendar  year;  and if an award is made,
compensation will be made in a lump sum within 30 days of such determination.

                                       13

<PAGE>

BASE SALARY AND EXECUTIVE  INCENTIVE  COMPENSATION FOR THE CHAIRMAN OF THE BOARD
AND FOR THE CHIEF EXECUTIVE OFFICER

     The  performance of Mr. Mack, as Chairman of the Board and Chief  Executive
Officer from April 1, 1998--July 31, 1998 and Chairman of the Board  thereafter,
and of Mr.  Ganci,  as  President  and Chief  Operating  Officer  from  April 1,
1998--July 31, 1998 and President and Chief Executive Officer  thereafter,  were
evaluated by the Outside Directors, under the Executive Incentive Plan.

     In  establishing  the annual base salary  component  for Mr. Mack under the
Executive  Incentive Plan,  which for the period April 1, 1998 to March 31, 1999
is  $400,000,  the  Outside  Directors  reviewed  Mr.  Mack's  and  Mr.  Ganci's
performance as Chief Executive Officer during 1998 related to their policies and
leadership  in the goal of building a more  profitable  corporation  and thereby
increasing  shareholder  value while  providing  reliable  service at reasonable
prices. As a measure of this goal, their  performance was evaluated  pursuant to
the following criteria:

     Has  the  confidence  of the  financial  community  and  the  Corporation's
     shareholders been maintained and/or enhanced? Key financial indices, credit
     ratings,  total  return to  shareholders  and the adequacy of cash flow are
     significant quantitative factors.

     Does the Corporation have effective management and other personnel so as to
     assure a high quality of customer service and to meet the changing needs of
     its customers?

     Has the  Corporation's  physical plant and equipment been maintained and/or
     improved  so as to  assure  that  the  Corporation  continues  to meet  its
     objective  of  providing  highly  reliable  utility  service  at the lowest
     reasonable price?

     Is the  Corporation's  strategic plan effective in keeping the  Corporation
     abreast  of or ahead of  changes  that  occur as a result  of  competition,
     technology changes and new regulation?

     With respect to the  relationship  of the Company's  performance in 1997 to
Mr.  Mack's  base  salary  for  1998,  the  Outside  Directors  determined  that
performance  by Mr. Mack of his duties in 1997 more than  satisfied  the related
performance  criteria, as described above. Not all of these performance criteria
lend themselves to objective measurement. However, in 1997 (i) the Corporation's
total  return to  shareholders  was 49.1%,  above the EEI peer  group  return of
29.3%, (ii) Central Hudson's residential electric prices were 20% lower than the
New York State Average,  (iii) the Corporation's Employee Safety Index was lower
than the average of the prior five years,  (iv) the  Corporation  demonstrated a
high  level  of  involvement  in  the  communities  served.  In  addition,   the
Corporation  instituted  its first  common  stock  repurchase  program to manage
growth in the common equity ratio above the target range, and the  Corporation's
bond rating was  increased  from A- to A by Standard and Poor's,  the first time
the Corporation had been so rated by Standard and Poor's since 1975.

     Based on the  recommendation  of the Compensation  Committee,  the Board of
Directors,  on April 1, 1998, awarded Mr. Mack 10% (or $36,000) of his 1997 Base
Salary as incentive compensation.

     Mr. Mack did not participate in the determination of his 1998 compensation.
Mr. Ganci did not participate in the  determination  of either his or Mr. Mack's
1998 compensation.

                                               Jack Effron
                                               Frances D. Fergusson
                                               Heinz K. Fridrich
                                               Edward F. X. Gallagher
                                               Charles LaForge
                                               Edward P. Swyer

                                       14

<PAGE>

PERFORMANCE GRAPH

     The line graph set forth below  provides a comparison of the  Corporation's
cumulative  total  shareholder  return on its Common  Stock with the  Standard &
Poor's 500 Index and,  as a  Corporation  determined  peer  comparison,  the EEI
Combination Gas and Electric Investor-Owned Utilities' Index ("EEI Index"). Such
shareholder return is the sum of the dividends paid and the change in the market
price of stock.

                 COMPARISON OF THE ORPORATION'S FIVE YEAR TOTAL
                  CUMULATIVE RETURN WITH THE S&P 500 INDEX AND
                                 THE EEI INDEX

[The following table represents plot points for a line chart]

           Central Hudson     S&P 500 Index      EEI Index
1993            100               100               100
1994             94               101                87
1995            118               139               111
1996            129               171               110
1997            192               229               143
1998            206               294               166
                                        


                            YEAR ENDING DECEMBER 31,
--------------------------------------------------------------------------------
                               1993     1994     1995     1996     1997     1998
--------------------------------------------------------------------------------
CENTRAL HUDSON                  100       94      118      129      192      206
S&P 500 INDEX                   100      101      139      171      229      294
EEI INDEX                       100       87      111      110      143      166
--------------------------------------------------------------------------------

----------

*   Assumes $100 invested on January 1, 1993 in the Corporation's  Common Stock,
    the S&P 500 Index and the EEI Index

                                       15

<PAGE>


                                  OTHER MATTERS

     The Board of  Directors  does not know of any matters to be brought  before
the  meeting  other than those  referred to in the notice  hereof.  If any other
matters  properly  come before the meeting,  it is the  intention of the persons
named in the form of proxy to vote such proxy in accordance  with their judgment
on such matters.

     Pursuant to Section 727(d) of the New York Business Corporation Law, notice
is hereby given to  shareholders  that the Company has provided  Directors'  and
Officers' Liability Insurance through various contracts.  These contracts became
effective  June 1, 1998 and provide  aggregate  coverage of $60 million with the
following carriers:  Chubb Group of Insurance  Companies,  Associated Electric &
Gas Insurance Services, Ltd. and American Casualty Excess Insurance, Ltd.

     The aggregate  premium costs for this  insurance,  which covers the Company
and its directors and executive officers, are approximately $455,000, a decrease
of $128,000 when compared to 1997.

                      By Order of the Board of Directors,

                      Steven V. Lant
                      CHIEF FINANCIAL OFFICER, TREASURER AND CORPORATE SECRETARY

March 1, 1999

                                       16

<PAGE>


                                        P
                                        R
                                        O
                                        X
                                        Y

                    CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                          PROXY OF COMMON SHAREHOLDERS
                  SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints JOHN E. MACK III, JACK EFFRON, HEINZ K. FRIDRICH
and  PAUL J.  GANCI,  or any one or more of  them,  proxy,  with  full  power of
substitution, to vote, as designated on the reverse hereof, all shares of Common
Stock owned by the  undersigned at the annual meeting of shareholders of Central
Hudson Gas & Electric  Corporation to be held at the office of the  Corporation,
284 South Avenue,  in the City of Poughkeepsie,  Dutchess  County,  New York, on
April  27,  1999,  or any  adjournment  thereof,  upon all such  matters  as may
properly come before the meeting, including the following proposals described in
the Proxy  Statement,  dated March 1, 1999, a copy of which has been received by
the undersigned:

1. Election of Directors, Nominees:

   Jack Effron, Frances D. Fergusson, Heinz K. Fridrich, Edward F. X. Gallagher,
   Paul J. Ganci, Charles LaForge, John E. Mack III, Edward P. Swyer.

2. Ratification of Appointment of Independent Accountants.

Change of Address/Comments (If Any)

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

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

-----------------------------------------
(If you have written in the above space,  please mark the  corresponding  box on
the reverse side of this card)

                                   SEE REVERSE
                                      SIDE

                              FOLD AND DETACH HERE

ROUTE TO CENTRAL HUDSON

[Map Here]

FROM NEW YORK CITY AREA:
o  Taconic State Parkway North to Interstate 84 (I-84)
o  I-84 West to Exit 13 (Route 9)
o  Turn right off ramp onto Route 9 North
o  Route 9  approximately  12 miles to the Academy  Street / South Avenue Exit
o  Bear left at end of ramp and go under the overpass
o  Turn right into Central Hudson entrance

FROM CONNECTICUT:
o  I-84 West to Exit 13 (Route 9)
o  Continue as above

FROM PENNSYLVANIA:
o  I-84 East to Exit 13 (Route 9)
o  Turn left off ramp onto Route 9 North
o  Continue as above

FROM NEW JERSEY AND UPSTATE NEW YORK:
o  New York Thruway (I-87) to Exit 18 (New Paltz)
o  Turn right onto Route 299
o  Route 299  approximately  5 miles,  turn right onto route 9W South
o  Route 9W approximately 2 miles, bear right for Mid-Hudson Bridge
o  After crossing bridge, take first right (Route 9 South)
o  Route 9 approximately 1 mile to Academy Street/South Avenue Exit
o  Bear right off exit ramp into Central Hudson entrance

<PAGE>

                                                                            1535

[X]
PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.

THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM

1. Election of Directors   FOR   WITHHELD
  (see reverse)

For, except vote withheld from the following nominee(s):

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

THE DIRECTORS RECOMMEND A VOTE "FOR" THIS ITEM

2. Ratification  of  Appointment  of  PricewaterhouseCoopers  LLP as Independent
   Accountants

FOR   AGAINST   ABSTAIN

SPECIAL ACTION

If you plan to attend the Annual Meeting place an X in this box.

If you wish us to discontinue Annual Report mailing for this account, place an X
in this box.   [ ]

If you indicated a change of address below or comments on reverse side, place an
X in this box.   [ ]

Please sign exactly as name appears hereon.  Joint owners should each sign. When
signing as attorney, executor, ad-ministrator,  trustee or guardian, please give
full title as such.

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

--------------------------------------------------------------------------------
  SIGNATURE (S)                                               DATE

================================================================================

                                ADMISSION TICKET
            Present this to the Central Hudson Representative at the
                           entrance to the auditorium

                         ANNUAL MEETING OF SHAREHOLDERS
                            April 27, 1999, 10:30 am
                            Office of the Corporation
                       284 South Avenue, Poughkeepsie, NY

================================================================================
                                     AGENDA
                           ELECTION OF EIGHT DIRECTORS

            RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
                                   ACCOUNTANTS
================================================================================

        IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING,
                WHETHER OR NOT YOU ATTEND THE MEETING IN PERSON.
                    TO MAKE SURE YOUR SHARES ARE REPRESENTED,
             WE URGE YOU TO COMPLETE AND MAIL THE PROXY CARD ABOVE.

================================================================================
            IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THE
          APPROPRIATE BOX ON THIS SIDE OF THE PROXY CARD. PRESENT THIS
                     ADMISSION TICKET TO THE REPRESENTATIVE
                   AT THE ENTRANCE TO THE ANNUAL MEETING ROOM.
================================================================================