CENTRAL HUDSON GAS & ELECTRIC CORP
10-Q, 1995-11-13
ELECTRIC & OTHER SERVICES COMBINED
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                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D. C. 20549

                                                        
(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE      
   SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended.............September 30, 1995
                                      OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE     
   SECURITIES EXCHANGE ACT OF 1934

For the transition period from............to...................
Commission file number...................................1-3268

              CENTRAL HUDSON GAS & ELECTRIC CORPORATION        
        (Exact name of registrant as specified in its charter)

           NEW YORK                                    14-0555980   
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification No.)

284 SOUTH AVENUE, POUGHKEEPSIE  NEW YORK                 12601-4879   
(Address of principal executive offices)                 (Zip Code)

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


      Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes   X   No      

      Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.  Common stock, par value $5.00 per share; 17,442,286 shares
outstanding as of October 31, 1995.

<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION

              FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995

                                     INDEX



                                                                    

        PART I - FINANCIAL INFORMATION

Item 1 - Consolidated Financial Statements                         

         Consolidated Statement of Income -
          Three Months Ended September 30, 1995 and 1994     1-2

         Consolidated Statement of Income - 
          Nine Months Ended September 30, 1995 and 1994      3-4  
 
         Consolidated Balance Sheet - September 30, 1995 
          and December 31, 1994                              5-6 

         Consolidated Statement of Cash Flows - 
          Nine Months Ended September 30, 1995 and 1994      7-8 

         Notes to Consolidated Financial Statements          9-10


Item 2 - Management's Discussion and Analysis of            11-18
          Financial Condition and Results of 
          Operations 



        PART II - OTHER INFORMATION

Item 1 - Legal Proceedings                                  19-21

Item 5 - Other Information                                  21-28
 
Item 6 - Exhibits and Reports on Form 8-K                   28-29

Signatures                                                   30







<PAGE>
                        PART I - FINANCIAL INFORMATION

ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                       CONSOLIDATED STATEMENT OF INCOME

                                                 For the 3 Months Ended 
                                                      September 30,
                                                    1995            1994  
                                                  (Thousands of Dollars)
Operating Revenues
 Electric..............................         $  106,489       $ 103,315
 Gas...................................             15,780          10,963
  Total - own territory................            122,269         114,278
 Electric sales to other utilities.....              5,278           1,813
                                                   127,547         116,091
Operating Expenses
 Operation:
  Fuel used in electric generation.....             17,982          16,922
  Purchased electricity................             13,787          10,571
  Purchased natural gas................             10,525           5,793
  Other expenses of operation..........             23,730          24,827
 Maintenance...........................              7,650           7,274
 Depreciation and amortization.........             10,488          10,149
 Taxes, other than income tax..........             16,660          16,370
 Federal income tax....................              7,908           6,645
                                                   108,730          98,551

Operating Income.......................             18,817          17,540

Other Income and Deductions
 Allowance for equity funds 
  used during construction.............                126             242
 Federal income tax....................                306             240
 Other - net...........................              1,424           1,865
                                                     1,856           2,347

Income Before Interest Charges.........             20,673          19,887

Interest Charges
 Interest on mortgage bonds............              4,215           4,893
 Interest on other long-term debt......              2,232           1,979
 Other interest........................                545             328
 Allowance for borrowed funds 
  used during construction.............               (113)           (151)
 Amortization of expense on debt.......                252             404
                                                     7,131           7,453





                                     - 1 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                       CONSOLIDATED STATEMENT OF INCOME

                                                For the 3 Months Ended 
                                                     September 30,
                                                   1995            1994 
                                                (Thousands of Dollars)
    
Net Income...........................              13,542          12,434

Dividends Declared on Cumulative
 Preferred Stock.....................               1,282           1,282
Income Available for Common Stock....              12,260          11,152
Dividends Declared on 
 Common Stock........................               9,156           8,925

Balance Retained in the Business.....           $   3,104        $  2,227 


Common Stock:
 Average Shares Outstanding (000s)...              17,416          17,138

 Earnings Per Share..................               $ .70           $ .65

 Dividends Declared..................               $.525           $ .52
























                See Notes to Consolidated Financial Statements.

                                     - 2 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                       CONSOLIDATED STATEMENT OF INCOME

                                                 For the 9 Months Ended 
                                                      September 30,
                                                    1995            1994  
                                                  (Thousands of Dollars)
Operating Revenues
 Electric..............................         $  300,113       $ 305,600
 Gas...................................             79,821          81,012
  Total - own territory................            379,934         386,612
 Electric sales to other utilities.....             10,918           9,529
                                                   390,852         396,141
Operating Expenses
 Operation:
  Fuel used in electric generation.....             45,494          54,464
  Purchased electricity................             40,889          32,365
  Purchased natural gas................             46,860          44,958
  Other expenses of operation..........             72,587          75,092
 Maintenance...........................             20,976          24,263
 Depreciation and amortization.........             31,463          30,386
 Taxes, other than income tax..........             50,473          50,381
 Federal income tax....................             24,358          24,018
                                                   333,100         335,927

Operating Income.......................             57,752          60,214

Other Income and Deductions
 Allowance for equity funds 
  used during construction.............                621             668
 Federal income tax....................                504             978
 Other - net...........................              6,130           4,975
                                                     7,255           6,621

Income Before Interest Charges.........             65,007          66,835

Interest Charges
 Interest on mortgage bonds............             12,647          15,409
 Interest on other long-term debt......              6,744           5,699
 Interest on short-term debt...........                  6            - 
 Other interest........................              1,400           1,135
 Allowance for borrowed funds 
  used during construction.............               (559)           (415)
 Amortization of expense on debt.......                817           1,579
                                                    21,055          23,407






                                  - 3 -     
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                       CONSOLIDATED STATEMENT OF INCOME

                                                For the 9 Months Ended 
                                                     September 30,
                                                   1995            1994 
                                                (Thousands of Dollars)
    
Net Income...........................              43,952          43,428

Dividends Declared on Cumulative
 Preferred Stock.....................               3,844           3,844
Income Available for Common Stock....              40,108          39,584
Dividends Declared on 
 Common Stock........................              27,274          26,577

Balance Retained in the Business.....           $  12,834        $ 13,007


Common Stock:
 Average Shares Outstanding (000s)...              17,347          17,065

 Earnings Per Share..................               $2.31           $2.32

 Dividends Declared..................               $1.57          $1.555
























                See Notes to Consolidated Financial Statements.

                                     - 4 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                          CONSOLIDATED BALANCE SHEET
                                          September 30,    December 31,
                                               1995               1994    
                                               (Thousands of Dollars)
                   ASSETS
Utility Plant
 Electric.......................           $1,143,279         $1,114,574
 Gas............................              138,242            131,830
 Common.........................               83,967             80,652
 Nuclear fuel...................               32,653             31,525
                                            1,398,141          1,358,581
 Less: Accumulated depreciation.              487,142            462,105
       Nuclear fuel amortization               25,458             23,655
                                              885,541            872,821
 Construction work in progress..               45,907             58,252
                                              931,448            931,073
Other Property and
 Investments....................               11,477             10,948

Current Assets
 Cash and cash equivalents......               41,816              5,792
 Accounts receivable from 
  customers-net of allowance for
  doubtful accounts.............               39,839             43,908
 Accrued unbilled utility 
  revenues......................               10,138             15,076
 Other receivables..............                3,939              5,953
 Fuel, materials and supplies, 
  at average cost...............               29,826             33,389
 Special deposits and 
  prepayments...................               21,124             12,092
                                              146,682            116,210
Deferred Charges
 Deferred finance charges -
  Nine Mile 2 Plant.............               71,046             71,904
 Income taxes recoverable.......               65,451             69,331
 Unamortized debt expense.......               10,309             11,072
 Deferred energy efficiency 
  costs.........................               10,010              9,583
 Deferred gas costs.............                3,942              6,983
 Other..........................               19,183             23,677
                                              179,941            192,550

Accumulated Deferred Income Tax.               53,790             58,629
                                           $1,323,338         $1,309,410



                See Notes to Consolidated Financial Statements.

                                     - 5 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                          CONSOLIDATED BALANCE SHEET
                                           September 30,   December 31,
                                               1995               1994    
                                               (Thousands of Dollars)
                   LIABILITIES
Capitalization 
 Common Stock Equity
  Common stock, 30,000,000 
  authorized; shares out-
  standing ($5 par value):
  1995 - 17,440,163
  1994 - 17,238,464.............           $   87,201         $   86,192
 Paid-in capital................              281,544            277,205
 Retained earnings..............               92,118             79,284
 Capital stock expense..........               (6,722)            (6,773)
 Unrealized gain on investments.                  747                823
                                              454,888            436,731
 Cumulative Preferred Stock
  Not subject to mandatory
   redemption...................               34,030             46,030
  Subject to mandatory
   redemption...................               35,000             35,000
                                               69,030             81,030
 Long-term Debt.................              389,372            389,364
                                              913,290            907,125
Current Liabilities
 Current maturities 
  of long-term debt.............                4,137              3,525
 Current redemption 
  of preferred stock............               12,000               -
 Notes payable..................                 -                 3,000
 Accounts payable...............               31,262             29,441
 Accrued taxes and interest.....               15,927              6,829
 Dividends payable..............               10,438             10,246
 Accrued vacation...............                4,157              4,081
 Customer deposits..............                3,846              3,763
 Other..........................                7,390              5,556
                                               89,157             66,441
Deferred Credits and Other
 Liabilities
 Deferred finance charges -                      
  Nine Mile 2 Plant.............               29,931             34,431
 Income taxes refundable........               27,934             28,383
 Accrued pension costs..........                1,734              9,705
 Operating reserves.............                5,420              5,663
 Other..........................               15,236             19,078
                                               80,255             97,260
Accumulated Deferred Income Tax               240,636            238,584
                                           $1,323,338         $1,309,410
                See Notes to Consolidated Financial Statements.
                                     - 6 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                                                For the 9 Months Ended
                                                     September 30,
                                                  1995           1994
                                                (Thousands of Dollars)
Operating Activities
  Net Income..........................          $ 43,952       $43,428
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:                                                
    Depreciation, amortization and 
     nuclear fuel amortization........            34,160        33,640
    Deferred income taxes, net........            10,362         6,803   
    Allowance for equity funds used 
     during construction..............              (621)         (668)
    Nine Mile 2 Plant deferred 
     finance charges, net.............            (3,642)       (3,642)
    Provision for uncollectibles......             2,625         2,661
    Accrued pension costs.............            (7,971)       (1,521)
    Deferred gas costs................             3,041         2,125
    Deferred gas refunds..............            (1,220)        3,026
    Gain on sale of long-term
     investments......................              (923)          -
    Other - net.......................             2,527          (658)
  Changes in current assets and
   liabilities, net:
    Accounts receivable and unbilled
     utility revenues.................             8,395        12,329
    Fuel, materials and supplies......             3,562         4,505
    Special deposits and prepayments..            (9,032)       (9,094)
    Accounts payable..................             1,821        (3,583)
    Accrued taxes and interest........             9,098        10,572
    Other current liabilities.........             1,992            83
  Net cash provided by operating
   activities.........................            98,126       100,006
Investing Activities
  Additions to plant..................           (33,696)      (43,164)
  Allowance for equity funds used
   during construction................               621           668
  Net additions to plant..............           (33,075)      (42,496)
  Proceeds from sale of long-term
   investments........................             1,299           -
  Roseton Plant restoration costs 
   related to fire damage.............              -             (913)
  Insurance recoveries related to
   Roseton Plant restoration..........              -            4,371
  Nine Mile 2 Plant decommissioning 
   trust fund.........................            (1,409)         (873)
  Other - net.........................              (901)        4,088
  Net cash used in investing
   activities.........................           (34,086)      (35,823)
                                     - 7 -<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                     CONSOLIDATED STATEMENT OF CASH FLOWS

                                                For the 9 Months Ended
                                                     September 30,
                                                   1995         1994
                                                 (Thousands of Dollars)

Financing Activities
   Proceeds from issuance of:
      Long-term debt.................              1,000           -  
      Common stock...................              5,347         5,960
   Repayments of short-term debt.....             (3,000)          -  
   Retirement and redemption of 
    long-term debt ..................               (433)      (50,119)
   Dividends paid on cumulative 
    preferred and common stock.......            (30,926)      (30,121)
   Issuance and redemption costs.....                 (4)          (65)

   Net cash used in financing 
    activities.......................            (28,016)      (74,345)

Net change in Cash and Cash 
 Equivalents.........................             36,024       (10,162)
Cash and Cash Equivalents - 
 Beginning Year......................              5,792        27,172

Cash and Cash Equivalents - 
 End of Period.......................           $ 41,816       $17,010


Supplemental Disclosure of
 Cash Flow Information
   Interest paid (net of amounts 
    capitalized).....................           $ 14,330       $17,158
   Federal income tax paid...........             10,100         9,300











                See Notes to Consolidated Financial Statements.



                                     - 8 -
<PAGE>
                   CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                  Notes to Consolidated Financial Statements

1.   General

     The accompanying consolidated financial statements of
Central Hudson Gas & Electric Corporation (herein the Registrant
or the Company) are unaudited but, in the opinion of management,
reflect adjustments (which include normal recurring adjustments)
necessary for a fair statement of the results for the interim
periods presented.  These condensed unaudited quarterly
consolidated financial statements do not contain the detail or
footnote disclosure concerning accounting policies and other
matters which would be included in annual consolidated financial
statements and, accordingly, should be read in conjunction with
the audited Consolidated Financial Statements (including the
notes thereto) included in the Company's Annual Report, on Form
10-K, for the year ended December 31, 1994, as amended by
Amendment No. 1 on Form 10-K/A thereto dated March 28, 1995 (as
amended, 10-K Report).  Due to the seasonal nature of the
Company's operations, financial results for interim periods are
not necessarily indicative of trends for a twelve-month period. 
Certain 1994 amounts have been reclassified to conform to the
1995 presentation.

2.   New Accounting Standard

     In March 1995, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" (SFAS 121).  SFAS 121
requires companies, including utilities, to assess the need to
recognize a loss whenever events or circumstances occur which
indicate that the carrying amount of an asset may not be fully
recoverable.  An impairment loss would be recognized if the sum
of the future undiscounted net cash flows expected to be
generated by an asset is less than its book value.  SFAS 121 also
amends SFAS 71 to require the write-off of a regulatory asset if
it is no longer probable that future revenues will recover the
cost of the asset.  SFAS 121, which is applicable to the Company
starting in 1996, may have consequences for a number of
utilities, including the Company, which are facing growing
competitive pressures that may erode prices for future utility
services, and which have relatively high-cost nuclear generating
assets.  The Company does not expect that the adoption of SFAS
121 will have a material impact on the financial position or
results of operations of the Company based on the current
regulatory treatment of its long-lived assets.  



                                     - 9 -
<PAGE>
3.   Financial Instruments

     During June 1995, the Company sold a portion of its
investment in the stock of an insurance company which the Company
held as an "available-for-sale" investment.  The Company
recognized net proceeds of $1.3 million on the stock sold, which
cost $375,000.  This sale resulted in a gross realized gain of
$924,000 which is recorded in the Consolidated Statement of
Income.  The remaining investment has a cost and market value at
September 30, 1995 of $400,000 and $1.6 million, respectively,
and a resulting unrealized net of tax holding gain of $747,000. 
Common stock equity will be adjusted to reflect periodic changes
in the market value of the remaining investment.  A realized gain
or loss would be recorded in the Consolidated Statement of Income
upon sale or other disposition of the remaining investment.

     Effective April 19, 1995, the Company entered into a three-
year interest rate cap agreement with a bank to manage exposure
to upward changes in interest rates.  This interest rate cap
agreement covers all of the Company-secured, tax exempt variable
rate bonds issued by the New York State Energy Research and
Development Authority.  Under this agreement, in the event a
nationally recognized tax-exempt bond interest rate index exceeds
8%, the Company will receive a payment from the counterparty of
the agreement for the excess interest costs over 8%.  This
agreement has the effect of capping the interest rate the Company
would be subject to (on a $115.9 million notional amount) at the
lesser of the actual rate or 8%.  In the event the counterparty
fails to meet the terms of the interest rate cap agreement, the
Company's exposure would be limited to a maximum interest rate of
15%.

4.   Commitments and Contingencies

     The Company faces a number of contingencies which arise
during the normal course of business and which have been
discussed in Note 8 (entitled "Commitments and Contingencies") to
the Consolidated Financial Statements included in the Company's
10-K Report.  Except as may be disclosed in Part II of this
Quarterly Report, on Form 10-Q, for the quarterly period ended
September 30, 1995, the Quarterly Report, on Form 10-Q, for the
quarterly period ended June 30, 1995, the Quarterly Report, on
Form 10-Q, for the quarterly period ended March 31, 1995, and in
any Current Report, on Form 8-K, filed in 1995, there have been
no material changes in the subject matters discussed in said Note
8.





                                     - 10 -
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

CAPITAL RESOURCES AND LIQUIDITY

For the nine months ended September 30, 1995, cash expenditures, 
 related to the construction program of the Company, amounted to
 $32.5 million.  The amount shown on the Consolidated Statement
 of Cash Flows for "Net additions to plant" of $33.1 million
 includes the debt portion of $559,000 of the Allowance for Funds
 Used During Construction ("AFDC", as such term is described in
 Note 1, entitled "Summary of Significant Accounting Policies,"
 to the Consolidated Financial Statements included in the
 Company's 10-K Report).  The cash requirements for such
 expenditures were funded from internal sources and proceeds of
 $5.3 million from the issuance of 201,699 shares of common stock
 under the Company's Automatic Dividend Reinvestment and Stock
 Purchase Plan and the Company's Customer Stock Purchase Plan.  

The Company redeemed all of its outstanding shares of 7.44%
 Cumulative Preferred Stock, Series G on October 1, 1995 at a
 redemption price of 101.22%, or $101.22 per share.  The $12.0
 million principal amount and other associated redemption costs
 were funded through internal sources.  This preferred stock is
 classified as a Current Liability on the September 30, 1995
 Consolidated Balance Sheet.

The growth of retained earnings in the first nine months of 1995 
 contributed to the increase in the book value of common stock
 from $25.34 at December 31, 1994 to $26.08 at September 30,
 1995.  The combined effect of the sales of common stock and the
 growth of retained earnings in the first nine months of 1995
 contributed to the increase in the common equity ratio from
 47.8% at December 31, 1994 to 48.9% at September 30, 1995.

The Company has $52 million of committed short-term credit
 facilities.   It also has uncommitted short-term credit
 facilities with four banks, one for $50 million, another for $30
 million, and two for $25 million each.  Authorization from the
 Public Service Commission of the State of New York (PSC),
 however, limits the short-term borrowing amount the Company may
 have outstanding, at any time, to $52 million in the aggregate. 
 At September 30, 1995, the Company had no short-term debt
 outstanding.  Investments in short-term securities were $35.0
 million at the end of September 1995.






                                    - 11 -
<PAGE>
EARNINGS PER SHARE

Earnings per share of common stock were $.70 for the third
 quarter of 1995, as compared to $.65 for the third quarter of
 1994, an increase of 8%.  Earnings per share of common stock
 were $2.31 for the nine months ended September 30, 1995, as
 compared to $2.32 for the nine months ended September 30, 1994,
 a decrease of .4%.

The increase in earnings per share for the quarter ended
 September 30, 1995, as compared to the same period in 1994,
 resulted primarily from increased electric net operating
 revenues attributable primarily to increased residential and
 commercial sales occurring because of warmer summer weather
 experienced in the third quarter of 1995 when compared to the
 same period in 1994 and a decrease in interest expense due
 primarily to the retirement at maturity of $50 million 8 1/8%
 Series First Mortgage Bonds in September 1994.  This favorable
 variance was partially offset by increased depreciation costs,
 increased property taxes, and a shareholders' contribution for a
 gas system replacement program in accordance with a settlement
 agreement with the PSC.

The decrease in per share earnings for the nine months ended 
 September 30, 1995 resulted primarily from decreased gas and
 electric net operating revenues attributable to decreased sales
 due largely to warmer winter weather experienced in the first
 quarter of 1995 as compared to the same period in 1994.  Also
 contributing to the decrease in the nine-month earnings were
 increased depreciation costs and property taxes.  The
 unfavorable variance in this nine-month period was partially
 offset by decreased maintenance costs of the Company's electric
 generating plants and gas distribution and transmission system.
 This nine-month period was also impacted favorably by decreased
 interest expense, due primarily to the retirement at maturity of
 $50 million 8 1/8% Series First Mortgage Bonds in September
 1994.














                                    - 12 -
<PAGE>
RESULTS OF OPERATIONS

The following tables report the variation in the results of
 operations for the three months and nine months ended
 September 30, 1995 compared to the same periods for 1994:


                                           3 MONTHS ENDED SEPTEMBER 30,

                                                                INCREASE
                                           1995         1994   (DECREASE)
                                              (Thousands of Dollars)
Operating Revenues                       $127,547     $116,091     $11,456
Operating Expenses                        108,730       98,551      10,179 
Operating Income                           18,817       17,540       1,277
Other Income & Deductions                   1,856        2,347        (491)
Income before Interest Charges             20,673       19,887         786
Interest Charges                            7,131        7,453        (322)
Net Income                                 13,542       12,434       1,108
Dividends Declared on Cumulative
 Preferred Stock                            1,282        1,282        -   
Income Available for Common Stock        $ 12,260     $ 11,152     $ 1,108


                                           9 MONTHS ENDED SEPTEMBER 30,

                                                                INCREASE
                                           1995         1994   (DECREASE)
                                              (Thousands of Dollars)
Operating Revenues                       $390,852     $396,141    $ (5,289)
Operating Expenses                        333,100      335,927      (2,827)
Operating Income                           57,752       60,214      (2,462)
Other Income & Deductions                   7,255        6,621         634
Income before Interest Charges             65,007       66,835      (1,828)
Interest Charges                           21,055       23,407      (2,352)
Net Income                                 43,952       43,428         524 
Dividends Declared on Cumulative
 Preferred Stock                            3,844        3,844        -   
Income Available for Common Stock        $ 40,108     $ 39,584    $    524 












                                    - 13 -
<PAGE>
OPERATING REVENUES

Operating revenues increased $11.5 million (10%) for the third
quarter of 1995 as compared to the third quarter of 1994 and
decreased $5.3 million (1%) for the nine months ended 
September 30, 1995 as compared to the nine months ended 
September 30, 1994.  Details of these revenue changes by electric
and gas departments are as follows:
                           INCREASE (DECREASE) FROM PRIOR PERIOD 
                            THIRD QUARTER               NINE MONTHS  
                          Electric      Gas          Electric      Gas 
                                   (Thousands of Dollars)
Customer Sales            $ 1,375     $ 5,520*      $ (9,739)   $ 5,280* 
Increases in Base 
 Rates                        -           -               47        - 
Sales to Other                
 Utilities                  3,465         -            1,389        - 
Fuel and Gas Cost         
 Adjustment                 1,036        (535)         3,156     (5,780)
Deferred Revenues             751        (327)           825       (930)
Miscellaneous                  12         159**          224        239**
                          $ 6,639     $ 4,817       $ (4,098)   $(1,191)

 *Both firm and interruptible revenues.
**Includes revenues from transportation of customer-owned gas.

Revenues collected from or credited to customers under the
 electric fuel and gas cost adjustment clauses do not affect
 earnings since they are offset in fuel costs, with the exception
 of revenues collected pursuant to incentive mechanisms.

SALES

Total kilowatt-hour sales of electricity within the Company's 
 service territory increased 1%, while firm sales of natural gas
 increased 16%, for the third quarter of 1995 as compared to the
 third quarter of 1994.  For the nine months ended September 30,
 1995, electric sales decreased 3% and firm gas sales decreased
 11% compared to the same period last year.  Changes in sales
 from last year by major customer classifications are set forth
 below: 
                          INCREASE (DECREASE) FROM PRIOR PERIOD 
                           THIRD QUARTER                NINE MONTHS  
                          Electric      Gas           Electric    Gas 
    Residential              3 %        (6)%            (4)%     (14)%
    Commercial               4          16               -        (8)    
    Industrial              (5)         28              (7)       (8)   
    Interruptible           N/A        262              N/A      161  
    Transportation of 
     Customer-owned 
     Gas                    N/A        (32)             N/A       47    
                                    - 14 -
<PAGE>
Billing degree days were 6% higher for the quarter ended 
 September 30, 1995 and 17% lower for the nine months ended
 September 30, 1995 when compared to the same periods in 1994.

Sales of electricity to residential customers in the third
 quarter of 1995 increased 3% from the comparable prior year
 period due to the combined effect of a 2% increase in usage per
 customer and a 1% increase in the number of customers. 
 Commercial sales in the third quarter of 1995 increased 4% as
 compared to last year due to the combined effect of a 3%
 increase in the number of customers and a 1% increase in usage
 per customer.  Electric sales to industrial customers decreased
 5% in the third quarter of 1995 due primarily to a decline in
 usage by a large industrial customer.

For the nine months ended September 30, 1995, sales of 
 electricity to residential customers decreased 4% resulting
 primarily from a decrease in usage per customer.  Sales to
 commercial customers were stable when compared to the same
 period last year.  Electric sales to industrial customers
 decreased 7% for such nine-month period due primarily to a
 decline in usage by a large industrial customer.

Sales of gas to residential customers for the third quarter of 
 1995 decreased 6% due primarily to a decrease in usage per
 customer.  Sales of gas to commercial customers for the third
 quarter of 1995 increased 16% due primarily to a 111% increase
 in sales to a large commercial customer.  Excluding this
 effect, sales to commercial customers increased 1% due to the
 net effect of a 4% increase in the number of customers and a 3%
 decrease in usage per customer.  Firm gas sales to industrial
 customers increased 28% for the third quarter of 1995 when
 compared to the same period in 1994, due primarily to an
 increase in usage by a large industrial customer.  Other gas
 sales increased 170% in the third quarter of 1995 largely due
 to increased ignitor gas usage at the Company's electric
 generating plants.

For the nine months ended September 30, 1995, residential gas 
 sales decreased 14% resulting primarily from a decrease in
 usage per customer.  Commercial gas sales decreased 8% despite
 a 29% increase in sales to a large commercial customer. 
 Excluding this customer's effect, gas sales decreased 10%
 primarily from the net effect of a 14% decrease in usage per
 customer and a 4% increase in the number of customers.  Firm
 gas sales to industrial customers for the nine months ended
 September 30, 1995 decreased 8% due largely to a decline in
 usage by two large industrial customers despite a 160% increase
 in usage by another large industrial customer.

Interruptible gas sales increased 262% in the third quarter of 
                                    - 15 -
<PAGE>
 1995 and 161% for the nine months ended September 30, 1995 due
 primarily to the increase in the amount of natural gas sold to 
 the other cotenant owners of the 1,200 MW Roseton Steam
 Electric Generating Plant (Roseton Plant) for use as a boiler
 fuel at the Roseton Plant.

Transportation gas volumes decreased 32% for the third quarter 
 and increased 47% for the nine months ended September 30, 1995. 
 The third quarter decrease is largely the result of decreased
 gas transportation service provided to a large industrial
 customer.  The nine-month variation is attributable primarily
 to increased gas transportation service provided to a large
 industrial customer in the first quarter of 1995.

OPERATING EXPENSES

The following table reports the variation in the operating 
 expenses for the three months and nine months ended September
 30, 1995 compared to the same periods for the prior year:

                                 INCREASE (DECREASE) FROM PRIOR PERIOD
                                   THIRD QUARTER            NINE MONTHS   
                                 Amount      Percent     Amount      Percent
                                        (Dollars in Thousands)  
Operating Expenses
 Fuel and Purchased
  Electricity                    $ 4,276        16%      $   (446)     (1)%
 Purchased Natural Gas             4,732        82          1,902       4 
 Other Expenses of
  Operation                         (823)       (4)        (2,942)     (4)
 Maintenance                         (56)       (1)        (3,131)    (15)
 Nine Mile 2 Plant Operation 
  and Maintenance                    158         4            281      3
 Depreciation and Amortiza-
  tion                               339         3          1,077      4 
 Taxes, Other than 
  Income Tax                         290         2             92       - 
 Federal Income Tax                1,263        19            340       1 
      Total                      $10,179        10%      $ (2,827)     (1)%

The cost of fuel and purchased electricity increased $4.3 million
 (16%) for the third quarter due to a 14% increase in total
 system output.  For the nine months ended September 30, 1995,
 the cost of fuel and purchased electricity decreased $446,000
 (1%) largely because of lower electric sales and an overall
 lower cost mix of electric generation and purchased electricity
 in 1995.

Purchased natural gas costs increased $4.7 million (82%) for the 
 third quarter of 1995 and $1.9 million (4%) for the nine months

                                    - 16 -
<PAGE>
 ended September 30, 1995 due primarily to higher interruptible
 gas sales including gas used as boiler fuel. 

Other expenses of operation decreased $823,000 (4%) for the 
 third quarter of 1995 due primarily to decreased electric
 distribution and transmission costs.  Other expenses of
 operation decreased $2.9 million (4%) for the nine months ended
 September 30, 1995 resulting largely from reduced costs for
 professional services and decreased electric distribution and
 transmission costs.

Maintenance expenses decreased $3.1 million (15%) for the nine 
 months ended September 30, 1995 due primarily to decreased
 costs associated with the maintenance of the Company's electric
 generating plants resulting largely from outage contractor
 costs being significantly less in 1995 than in 1994.  The nine-
 month period was further impacted by reduced costs related to
 the Company's gas distribution and transmission system.  These
 costs were higher in 1994 primarily because of the need to
 repair damage caused by the extremely cold weather experienced
 in the Company's service territory in the first quarter of
 1994.  The decrease for the nine-month period was partially
 offset by increased electric distribution and transmission
 costs resulting largely from increased tree-trimming activity
 in the second quarter of 1995.   

Depreciation and amortization expense increased $1.1 million (4%)
 for the nine months ended September 30, 1995, when compared to
 the same period in 1994, due primarily to the growth in
 depreciable property.

Federal income taxes increased $1.3 million (19%) for the third
 quarter of 1995 due to the variation in pre-tax income when
 compared to the same period in 1994.  

OTHER INCOME AND DEDUCTIONS, INTEREST CHARGES AND PREFERRED
DIVIDENDS

Other income and deductions decreased $491,000 (21%) for the 
 third quarter of 1995 due primarily to a shareholders'
 contribution for a gas system replacement program in accordance
 with a settlement agreement with the PSC.  Other income and
 deductions for the nine months ended September 30, 1995
 increased 634,000 (10%) due largely to the gain on the sale of
 long-term stock investments in the second quarter of 1995.

Total interest charges decreased $2.4 million (10%) for the nine
 months ended September 30, 1995, resulting primarily from the
 retirement at maturity of $50 million of the Company's 8 1/8%
 Series First Mortgage Bonds in September 1994. 

                                    - 17 -
<PAGE>
COMMON STOCK DIVIDENDS

Reference is made to the subcaption "Common Stock Dividends and 
 Price Ranges" on Page 30 of Exhibit 13 to the 10-K Report, and
 which is incorporated by reference in Part II, Item 5 of said
 Report, for a discussion of the Company's dividend policies. 
 On September 22, 1995, the Board of Directors of the Company 
 declared a quarterly dividend of $.525 per share, payable
 November 1, 1995 to shareholders of record as of October 10,
 1995.









































                                    - 18 -
<PAGE>
                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

      ASBESTOS LITIGATION.  Reference is made to Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1994, as amended by Amendment No. 1 on Form 10-K/A thereto dated
March 28, 1995 (collectively, the "10-K Report"), and to the
caption "Asbestos Litigation" in Part I, Item 3 (Legal
Proceedings) of the 10-K Report, to Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1995 ("First Quarter
10-Q Report") and to the caption "Asbestos Litigation" in Part
II, Item 1 (Legal Proceedings) therein and to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
and to the caption "Asbestos Litigation" in Part II, Item 1
(Legal Proceedings) therein for a discussion of the lawsuits
regarding asbestos currently pending against Registrant, which
discussions are hereby incorporated herein by reference.

      By complaints dated June 29, 1995, July 17, 1995, August 3,
1995, September 6, 1995 and September 18, 1995, the Registrant
was made a defendant in eighty-nine (89) new cases, all filed in
the New York State Supreme Court, County of New York.  As of
October 23, 1995, 483 cases were pending against the Registrant
in New York State Supreme Court, County of New York, and two (2)
cases were pending against Registrant in the United States
District Court for the Southern District of New York.  Four
hundred seventy-three (473) of these plaintiffs each seek
$10,000,000 in compensatory damages, plus punitive damages, nine
(9) plaintiffs seek $10,500,000 in compensatory damages, plus
punitive damages, one (1) plaintiff seeks $27,000,000 in
compensatory damages, plus punitive damages, one (1) plaintiff
seeks $70,000,000 in compensatory damages, plus punitive damages,
and, in one case, in which the Registrant was joined as a third-
party defendant by Owens-Corning Fiberglas ("OCF"), the complaint
alleges that the Registrant is responsible to OCF for the amount
of any recovery obtained by the plaintiff against OCF in the
lawsuit.

      In summary, as of October 23, 1995, the Registrant is a
defendant or third-party defendant in 485 asbestos lawsuits. 
Although the Registrant is presently unable to assess the
validity of these 485 lawsuits, based on information known to the
Registrant at this time, including its experience in settling
asbestos cases and in obtaining dismissals of asbestos cases, the
Registrant believes that the costs to be incurred in connection
with these lawsuits will not have a material adverse effect on
the Registrant's financial position.  However, if the Registrant
were ultimately held liable under these lawsuits and insurance
coverage were not available, the cost thereof could have a

                                    - 19 -



material adverse effect (a reasonable estimate of which cannot be
made at this time) on the financial condition of the Registrant
if the Registrant could not recover all or a substantial portion
thereof through rates.  Registrant's insurance does not extend to
punitive damages.

      ENVIRONMENTAL CLAIMS - NEWBURGH MANUFACTURED GAS SITE. 
Reference is made to Registrant's 10-K Report, and to the caption
"Environmental Claims - Newburgh Manufactured Gas Site" in Item 3
of Part I thereof for a discussion of the letters received from
the City of Newburgh, New York ("City") purporting to be notices
pursuant to the "Citizens' Suit" provisions of the following
federal laws: the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA") and the Emergency Planning and
Community Right to Know Act ("EPCRA").  Reference is also made to
Registrant's Current Report, on Form 8-K, dated June 13, 1995,
for a description of the filing by the City on May 26, 1995, of a
Complaint and Demand for Jury Trial, dated May 26, 1995, against
Registrant in the United States District Court, Southern District
of New York, pursuant to said Citizens' Suit provisions ("Suit"),
including the allegations made in such complaint, the relief
sought by the City, and Registrant's response thereto.

      On October 24, 1995, Registrant and the New York State
Department of Environmental Conservation ("NYSDEC") entered into
an Order on Consent regarding the development and implementation
of an investigation and remediation program for Registrant's
former manufactured gas plant site ("Site") and the City's
property, both located in Newburgh, New York, which Order would
achieve the following goals: 
 
                  (i) the development and implementation of a
                  Remedial Investigation and the preparation of a
                  Feasibility Study, known as a "RI/FS", to
                  determine the nature, extent and source of the
                  contamination; 
 
                  (ii) the remediation of the Site, and the City's
                  property to the extent Registrant is responsible,
                  if NYSDEC determines there is a need for such
                  remediation, on a schedule and to an extent
                  acceptable to NYSDEC; and 

                  (iii) the payment of the NYSDEC's reasonable
                  administrative and oversight costs associated with
                  the implementation of the Order on Consent.  




                                    - 20 -



The provisions of the Order on Consent set forth the procedures
and requirements necessary to carry out such goals.  Pursuant to
the terms of the Order on Consent, Registrant neither admits nor
denies NYSDEC's authority to require investigation and
remediation of hazardous substances at, or associated with, the
Site.  The City will receive documents and reports developed in
the Remedial Investigation and the Feasibility Study, and has the
opportunity of commenting thereon under the Order on Consent.

      Registrant cannot at this time predict the outcome of the
Suit, nor the ultimate costs of implementing the terms of said
Order on Consent.

      By letter petition dated September 22, 1995, the Registrant
has petitioned the PSC for authorization to defer on the
Registrant's books of account all costs including legal defense
costs, but excluding Registrant labor, related to environmental
site investigation and remediations actions that are being or are
likely to be incurred by the Registrant in 1995 and thereafter in
connection with the assessment of the need for potential
environmental response actions at the Site.   These expenses are
not reasonably known or estimatable to the Registrant at this
time, nor can Registrant predict at this time what action the PSC
will take on such letter petition.


Item 5.  Other Information.

      1. RATE PROCEEDINGS - GAS  On November 10, 1995, Registrant 
filed a request with the PSC to increase its base rates for firm
natural gas service to produce a net increase in firm gas
revenues of $2.422 million based on projected operations during
the rate year comprised of the period November 1, 1996 -        
October 31, 1997 ("Rate Year").  This represents an overall
increase in firm gas revenues of 3%.

      The higher rates have been requested to cover increases in
capital and operating costs that are projected for the Rate Year
that are not adequately provided for in present rates and will
not be provided for by increased sales.

      In its filing, Registrant requested an 11.50% return on
common equity and a 9.22% return on total invested capital.  It
is not expected that any new gas rates resulting from this filing
will become effective before October 1, 1996.

      Based on Registrant's proposed allocation between firm
customer classes, the proposed increase would be approximately
4.9% for residential customers and 1.0% for commercial/industrial
customers.

                                    - 21 -



      Registrant can make no prediction as to what action the PSC
will take on its request, including the amount of any gas rate
increase which may be authorized by the PSC.              
 
      2. COMPETITION  Reference is made to (i) Part I, Item 1 of
Registrant's 10-K Report, and to the caption "Business-Other
Matters-Competition" for a discussion with respect to competition
as it generally affects the Company, and with respect to electric
and natural gas service, and the Company's response to such
competition; (ii) Part II, Item 5 of Registrant's First Quarter
10-Q Report, and to the caption "FERC NOPR" for a discussion with
respect to a Notice of Proposed Rulemaking issued on March 29,
1995 by the Federal Energy Regulatory Commission ("FERC") on
generic requirements for transmission tariffs, the functional
unbundling of transmission services under these tariffs and each
ancillary service offered by utilities in their rates, and the
endorsement by FERC of the principle of "stranded cost recovery";
and (iii) the caption "Other Developments - Competition -
General" starting on page 12 of Exhibit 13 to Registrant's 10-K
Report for a discussion of a proceeding instituted by the Public
Service Commission of the State of New York ("PSC") to address
numerous issues related to competition in the energy markets in
New York State, which proceeding is currently in "Phase II"
thereof.

(a)  Energy Association Proposal

      On October 5, 1995, The Energy Association of New York State
("Energy Association"), which is a group comprised of the eight
major investor-owned gas and electric utilities serving New York
State (including the Registrant), has, separately from the
Niagara Mohawk proposal described in (b) below, proposed its own
plan for restructuring the electric industry on a state-wide
basis, to promote wholesale competition through a carefully
planned period of transition.

            The key elements of this restructuring plan include: 
 
            (i) setting up a market for competitively selling
            wholesale bulk power into a pool, regardless of whether
            that power is provided by investor-owned utilities,
            non-utility generators, power marketers, cooperatives
            or on-site generators.  Utilities would buy their power
            needs from this pool.  Rather than the PSC setting
            regulated rates for generation, prices would be
            established competitively through a separate commercial
            entity, sometimes referred to as a Pool Market
            Mechanism or Power Exchange;



                                    - 22 -



            (ii) allowing bilateral wholesale agreements between
            utilities and generators outside the Pool Market
            Mechanism;

            (iii) creating an Independent System Operator, which
            would not be a party to power sales agreements, to
            direct the operation of the State's transmission system
            so that bulk power will be delivered safely and
            reliably;

            (iv) providing clear, "visible," market signals for the
            price of electricity so that customers can make more
            informed decisions on their use of electricity; and

            (v) using performance-based incentives to guide the
            functions of the industry which are not subject to
            competition, such as transmission and distribution.

      The Energy Association's support for the implementation of
full wholesale competition is conditioned on four essential
requirements:

            (i) implementation by the PSC of its recently affirmed
            principle that utilities will be provided a reasonable
            opportunity fully to recover "stranded investments";

            (ii) support by the PSC for the utilities' option of
            continuing to remain in the generation business,
            subject to a functional separation of their generation
            business from the regulated business, with separate
            accounting for, but without a mandated divestiture of,
            generation;

            (iii) appropriate treatment of nuclear plants which,
            because of their unique characteristics, cannot be
            operated on a deregulated basis.  This should include
            an exploration of governmental actions to reduce
            embedded cost of nuclear plants, such as cost-effective
            refinancing; and

            (iv) the development and adoption of a clearly defined
            transition plan to ensure that, in the transition to
            the new wholesale industry structure, system
            reliability and the interests both of customers and
            investors (many of whom are also customers) are
            adequately protected.





                                     - 23 -



      The Energy Association has stated in its proposal that
direct retail access, under which retail customers would have a
choice of their electricity supplier, would involve a number of
risks and uncertainties that require careful analysis, and the
Energy Association believes that experience under a competitive
wholesale market will facilitate a better understanding of these
risks, uncertainties and other key issues.

      The Energy Association has also proposed that certain
issues, such as the reform of State and local tax policies, the
resolution of problems regarding uneconomic independent power
contracts between independent power producers and the state's
utility companies, a moratorium on regulatory programs that would
increase the price of electricity, the elimination of State
assessments on utilities to fund State agencies and programs, and
the removal of regulatory oversight from the utilities' provision
of non-utility services, must be addressed immediately in an
effort to reduce the current level of electricity prices in New
York State.

(b) Niagara Mohawk Proposal

      On October 6, 1995, as reported in a Current Report on Form
8-K dated October 12, 1995 filed by Niagara Mohawk Power
Corporation ("NMPC"), NMPC filed a proposal with the PSC which
provides for a corporate restructuring designed to create an
open, competitive electricity market, deregulate electricity
generation in NMPC's service area, allow all customers, by the
year 2000, to choose their electricity supplier and freeze or
reduce electricity prices over the next five years.  The
restructuring would place NMPC's power plants (which would
include NMPC's interest in the Nine Mile 2 Plant, which is
described in Note 2 to the Registrant's 1994 financials, starting
on page 48 of Exhibit 13 to Registrant's 10-K Report, and NMPC's
interest in the Roseton Plant, which is described in Note 8 to
the Registrant's 1994 financials, starting on page 66 of Exhibit
13 to Registrant's 10-K Report) and unregulated generator
contracts in a separate generating company, with the remaining
business being separated into a holding company with regulated
subsidiaries that would transmit and distribute electricity and
natural gas and supply energy services to core customers.  This
holding company would also have unregulated subsidiaries that
will engage in marketing, brokering and service activities.  In
addition, NMPC also put forth in its proposal a request for
"relief from overpriced unregulated generator contractors that
were mandated by public policy."  In its proposal, NMPC indicated
that if it was unable to negotiate new contracts with unregulated
generators, NMPC would propose to take possession of the
unregulated generator projects and compensate their owners
through NMPC's power of eminent domain.  NMPC would then resell

                                    - 24 -



the projects, allowing the projects to sell electricity into the
competitive pool at market prices.  NMPC has indicated that its
proposals are offered as an integrated package, and not
piecemeal.

      NMPC has stated that if it appears that NMPC's proposal is
unachievable, NMPC could not rule out the possibility of a
restructuring under Chapter 11 of the United States Bankruptcy
Code.  Under procedures established by the PSC, Niagara Mohawk
and the parties to its rate case will negotiate the NMPC proposal
with the goal of achieving a PSC-approved settlement by year end.

      As a result of NMPC's filing and related public statements,
ratings on certain of NMPC's securities have been downgraded to a
level below investment grade by certain rating agencies.

      The Registrant cannot predict whether NMPC's proposal will
be effected or, if effected, what impact, if any, NMPC's proposal
would have on the gas and electric utility business in New York
State, or what effect NMPC's proposal and/or a restructuring
under Chapter 11 of the United States Bankruptcy Code would have
on Registrant's 9%, non-operating interest in the Nine Mile 2
Plant, or NMPC's 25% interest in the Roseton Plant, in which the
Registrant is the managing co-tenant with a 35% interest.

(c)  Competitive Opportunities Proceeding

      By Opinion and Order issued and effective June 7, 1995, the
PSC adopted, in Phase II, principles to guide the transition to
competition in the electric industry in New York State, modifying
principles that had been proposed by the PSC's Opinion and Order
issued and effective December 22, 1994, as certain of those
proposed principles, as applicable to Registrant, were described
under the caption "Other Developments - Competition - New York -
Electric" on pages 12 and 13 of Exhibit 13 to Registrant's 10-K
Report.

      As adopted, the PSC's principles provide the electric
utilities with an opportunity to recover prudent and verifiable
expenditures (stranded costs) and call for further investigation
of whether vertically integrated utility corporate structures
would impede or obstruct development of effective wholesale or
retail competition.

      As part of Phase II of this proceeding, the PSC directed a
review of alternative models for competition within New York
State's electric industry, which models are labeled "evolving
regulatory environment," "wholesale" and "retail."  The parties
to such proceeding, on or about October 25, 1995, filed their
initial papers addressing these models.  

                                    - 25 -



      The Energy Association filed its comments, which followed
the Energy Association's proposal described in (a) above, and
which supported the wholesale poolco model.

      Included in the other filings on October 25, 1995 were those
of the Staff of the New York Power Authority ("NYPA") which
supported a retail bilateral model under which all customers
would have the choice to select their electricity suppliers
according to individually contracted arrangements.  The bilateral
model supported by NYPA Staff would incorporate a power exchange
that would accommodate the development of a spot market and a
single transmission system operator that would have the ultimate
responsibility for the reliable operation of the system.  NYPA
advocates the establishment of this single transmission entity
for the State as a supporting platform for the retail bilateral
model and recommends that consideration be given to NYPA assuming
the role of the single owner and operator of the bulk power
transmission system in New York State.  NYPA Staff took no
position as to the appropriate level of stranded cost recovery.

      Also included in such filings were those of the Staff of the
PSC which recommended a flexible poolco model of competition that
provides a full range of competitive alternatives, including
retail and wholesale competition, market-clearing "spot" prices
for electricity purchases and physical bilateral contracts.  The
PSC Staff model includes divestiture of utility generation assets
through sale or spin-off.  The PSC Staff believes that utilities
should have a reasonable opportunity to recover past investments
that are legitimate and verifiable, but that full recovery is no
longer a reasonable expectation of utilities in an increasingly
competitive market.  Thus, the PSC Staff finds that some sharing
of strandable costs by utilities is reasonable, but, as part of
the divestiture/restructuring process, the PSC should, in
proceedings specific to each utility, determine each company's
stranded costs, as well as the level of sharing and recovery of
these stranded costs.

      Although the Registrant does not believe the PSC has the
power to require divestiture of any of its assets or to mandate
any specific form of corporate structure, any such mandated
divestiture, if sustained, could be costly and there could be
legal barriers to divestiture in corporate debt instruments.

      The Registrant can make no prediction as to the ultimate
outcome of Phase II of this proceeding, or when such Phase II
will be concluded.  In the June 1995 Opinion and Order, the PSC
indicated that a recommended decision or report setting forth a
full description of the proposed model or models for
restructuring the electric industry, along with the potential
benefits and risks of each, is expected to be completed by the
end of 1995.  
                                    - 26 -



      Depending on the outcome of Phase II of this proceeding, the
eligibility of electric utilities in New York State to continue
applying SFAS 71, referred to in Note 2 to the Consolidated
Financial Statements in Part I of this Report on Form 10-Q, could
be affected.  If the Registrant could no longer meet the criteria
of SFAS 71 for all or a part of its business, the Registrant
would have to charge against income certain previously deferred
costs.  Although the Registrant believes it will continue to meet
the criteria of SFAS 71 in the near future, it cannot predict
what effect a competitive marketplace or future actions of the
PSC will have on its ability to continue to do so.

      Restructuring of the utility industry in New York could have
an uncertain effect on the value of utility securities.
 
      3.  TAKE-OR-PAY GAS COSTS  Reference is made to Part I, Item
1 of Registrant's 10-K Report and the caption "Business-Rates-
Take-or-Pay Gas Liability" thereof for a discussion of the PSC
proceeding commenced in 1988 to determine, among other things,
whether recovery of some or all of take-or-pay costs should be
denied New York gas distribution companies.

      On September 15, 1995, the Registrant submitted to the PSC a
Motion for Approval of a settlement agreement entered into
between the Registrant and PSC Staff which would allow for
Registrant to recover through its rates approximately $2.9
million of deferred take-or-pay costs and to allow for permanent
collection of take-or-pay costs, which amount will be reduced by
an associated $1.5 million of refunds received from various gas
transmission companies in 1994.

      Such settlement agreement allows the Registrant to amortize
and recover in rates the supplier take-or-pay charges deferred as
of June 30, 1995 (an amount estimated to be, including interest,
$2.9 million as of June 30, 1995), together with interest accrued
on such deferral up to the dates rates reflecting such
amortization are made effective (the "Effective Date"). 
Amortization periods and specific rate recovery methods will
vary, depending on the type of customer.  As of the Effective
Date, the Registrant will terminate the accrual of interest on
the balances of deferred costs to be amortized and shall not be
entitled to accrue additional interest on such deferred costs
during the amortization period.  The settlement agreement also
provides for the recovery of take-or-pay charges incurred after
July 1, 1995 on a current basis until the total of such charges
(excluding interest) equals $5.2 million; for amounts in excess
of such figure, Registrant will be able to recover take-or-pay




                                    - 27 -



charges on a sliding scale.  Take-or-pay charges relating to
Columbia Gas Transmission System are handled separately, owing to
that system's involvement in bankruptcy proceedings.

      The PSC is currently in the process of reviewing such
settlement agreement.  Registrant is unable to predict whether
the PSC will approve or reject such settlement agreement.

      4.  ELECTRIC - OPERATIONAL MATTERS - NUCLEAR PLANT
DECOMMISSIONING COSTS  Reference is made to Registrant's 10-K
Report and to the caption "Properties - Electric - Operational
Matters - Nuclear Plant Decommissioning Costs" in Item 2 of Part
I thereof for a discussion of the Registrant's share of the
estimated costs to decommission the Nine Mile 2 Plant.

      Registrant has received a draft of the Nine Mile 2 Plant
Decommissioning Cost Study recently completed by ABZ, Inc.  The
preliminary findings of this study indicate that the Registrant's
9% of costs to decommission the plant is estimated to be
approximately $72.5 million (first quarter 1996 dollars) instead
of $25.1 million (1994 dollars) as reported in Registrant's 10-K
Report.  This draft is currently under review by the cotenants of
the Nine Mile 2 Plant.  The final report is slated to be issued
in December of 1995.

Item 6.  Exhibits and Reports on Form 8-K.

      (a) EXHIBITS.  The following exhibits are furnished in
accordance with the provisions of Item 601 of Regulation S-K:

           Exhibit No.
         Regulation S-K
           Item 601
          Designation                 Exhibit Description


      (10)    -- Material Contracts

         (i)104   --    Fuel Oil Supply Contract between Montello Oil
                        Corporation and Central Hudson Gas & Electric
                        Corporation, Consolidated Edison Company of
                        New York, Inc. and Niagara Mohawk Power
                        Corporation for the Roseton Electric
                        Generating Plant.  [Certain portions of this
                        contract setting forth or relating to pricing
                        provisions are omitted and filed separately
                        with the Securities and Exchange Commission
                        pursuant to a request for confidential
                        treatment under the rules of said
                        Commission.]

                                    - 28 -



         (i)105   --    Fourth Amendment, dated as of November 1,     
                        1995, to the Agreement for the Sale and
                        Purchase of Coal, dated as of January 1,
                        1987, among Registrant, Kentucky Carbon
                        Corporation and The Carbon Fuel Sales Company
                        (Exhibit (10)(i)40 to Registrant's 10-K
                        Report).  [Certain portions of this contract
                        setting forth or relating to pricing
                        provisions are omitted and filed separately
                        with the Securities and Exchange Commission
                        pursuant to a request for confidential
                        treatment under the rules of said
                        Commission.]

         (12)     --    Statement Showing Computation of the Ratio of
                        Earnings to Fixed Charges and the Ratio of
                        Earnings to Combined Fixed Charges and
                        Preferred Stock Dividends.

         (27)     --    Financial Data Schedule, pursuant to Item
                        601(c) of Regulation S-K.

         (99)(i)5 --    Order on Consent signed on behalf of the New
                        York State Department of Environmental
                        Conservation and Registrant relating to
                        Registrant's former manufactured gas site
                        located in Newburgh, New York.
              

      (b)  REPORTS ON FORM 8-K.  Registrant filed no Current
Reports on Form 8-K during the quarter for which this Quarterly
Report on Form 10-Q is filed.



















                                    - 29 -
<PAGE>
                                  SIGNATURES
      Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunder duly authorized.

                                     CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                                   (Registrant)               

                                     By:                                      
                                                          Donna S. Doyle      
                                                            Controller        
                                                  Authorized Officer and Chief
                                                         Accounting Officer   

Dated:  November 13, 1995




































                                     -30-
</PAGE>

<TABLE>                                                                                                           EXHIBIT 12
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
<CAPTION>
                                                          1995              
                                              3 Months    9 Months   12 Months
                                                Ended      Ended       Ended                 Year Ended December 31,     
                                               Sept 30    Sept 30     Sept 30      1994       1993       1992       1991     1990
<S>                                           <C>        <C>         <C>         <C>        <C>        <C>        <C>      <C>
   Earnings:
A.  Net Income                                $13,542     $43,952    $ 51,452    $ 50,929   $ 50,390   $ 47,688   $ 42,941 $ 41,035
B.  Federal Income Tax                          7,602      23,854      27,620      26,806     27,158     24,363     21,361   20,374
C.   Earnings before Income Taxes              21,144      67,806      79,072      77,735     77,548     72,051     64,302   61,409
D.  Total Fixed Charges 1                       7,540      22,794      30,470      32,679     33,820     34,888     37,737   42,906
E. Total Earnings                             $28,684     $90,600    $109,542    $110,414   $111,368   $106,939   $102,039 $104,315

   Preferred Dividend Requirements:
F.  Allowance for Preferred Stock
     Dividends Under IRC Sec 247              $ 1,282     $ 3,844    $  5,127    $  5,127   $  5,562   $  5,544   $  5,659 $  5,681
G.  Less Allowable Dividend Deduction             132         396         528         528        528        544        544      544
H.  Net Subject to Gross-up                     1,150       3,448       4,599       4,599      5,034      5,000      5,115    5,137
I.  Ratio of Earnings before Income
     Taxes to Net Income (C/A)                  1.561       1.543       1.537       1.526      1.539      1.511      1.497    1.497

J.  Pref. Dividend (Pre-tax) (HxI)              1,795       5,320       7,069       7,018      7,747      7,555      7,657    7,690
K.  Plus Allowable Dividend Deduction             132         396         528         528        528        544        544      544
L. Preferred Dividend Factor                    1,927       5,716       7,597       7,546      8,275      8,099      8,201    8,234
M. Fixed Charges (D)                            7,540      22,794      30,470      32,679     33,820     34,888     37,737   42,906
N.  Total Fixed Charges
     and Preferred Dividends                  $ 9,467     $28,510    $ 38,067    $ 40,225   $ 42,095   $ 42,987   $ 45,938 $ 51,140
O. Ratio of Earnings to Fixed
    Charges (E/D)                                3.80        3.97        3.60        3.38       3.29       3.07       2.70     2.43
P. Ratio of Earnings to Fixed Charges
    and Preferred Dividends (E/N)                3.03        3.18        2.88        2.74       2.65       2.49       2.22     2.04
<FN>
             <FN1> Includes a portion of rent expense deemed to be representive of the interest factor.                    
</FN>
</TABLE>
</PAGE>

<TABLE> <S> <C>

<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED
STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1995
<PERIOD-END>                               SEP-30-1995
<BOOK-VALUE>                                  PER-BOOK
<TOTAL-NET-UTILITY-PLANT>                     $931,448
<OTHER-PROPERTY-AND-INVEST>                    $11,477
<TOTAL-CURRENT-ASSETS>                        $146,682
<TOTAL-DEFERRED-CHARGES>                      $179,941
<OTHER-ASSETS>                                 $53,790
<TOTAL-ASSETS>                              $1,323,338
<COMMON>                                       $87,201
<CAPITAL-SURPLUS-PAID-IN>                     $274,822
<RETAINED-EARNINGS>                            $92,865
<TOTAL-COMMON-STOCKHOLDERS-EQ>                $454,888
                          $35,000
                                    $34,030
<LONG-TERM-DEBT-NET>                          $389,372
<SHORT-TERM-NOTES>                                  $0
<LONG-TERM-NOTES-PAYABLE>                           $0
<COMMERCIAL-PAPER-OBLIGATIONS>                      $0
<LONG-TERM-DEBT-CURRENT-PORT>                   $4,137
                      $12,000
<CAPITAL-LEASE-OBLIGATIONS>                         $0
<LEASES-CURRENT>                                    $0
<OTHER-ITEMS-CAPITAL-AND-LIAB>                $393,911
<TOT-CAPITALIZATION-AND-LIAB>               $1,323,338
<GROSS-OPERATING-REVENUE>                     $390,852
<INCOME-TAX-EXPENSE>                           $24,358
<OTHER-OPERATING-EXPENSES>                    $308,742
<TOTAL-OPERATING-EXPENSES>                    $333,100
<OPERATING-INCOME-LOSS>                        $57,752
<OTHER-INCOME-NET>                              $7,255
<INCOME-BEFORE-INTEREST-EXPEN>                 $65,007
<TOTAL-INTEREST-EXPENSE>                       $21,055
<NET-INCOME>                                   $43,952
                     $3,844
<EARNINGS-AVAILABLE-FOR-COMM>                  $40,108
<COMMON-STOCK-DIVIDENDS>                       $27,274
<TOTAL-INTEREST-ON-BONDS>                           $0
<CASH-FLOW-OPERATIONS>                         $98,126
<EPS-PRIMARY>                                    $2.31
<EPS-DILUTED>                                       $0
        

</TABLE>

<PAGE>
                                             Exhibit (10)(i)105

THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN
REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                          EXHIBIT NO. 1

              CALCULATIONS OF DELIVERED FUEL COSTS

          "Delivered Current Coal Price" shall be the Current
Base Price + the combined Norfolk Southern and Conrail contract
freight charge expressed in cents per million Btu's based on a
13,000 Btu/Lb "as received" heat content.

          "Delivered Current Oil Price" shall be the net price
(including discounts and allowances) to the BUYER under firm term
contract(s) for the supply of Number Six (6) Residual Fuel to the
Danskammer Generating Station of the maximum sulfur content of
fuel oil (currently 1.0%) permitted to be burned in Danskammer
Units 3 and 4 plus all applicable State, Federal or other taxes
and fees required to be paid by BUYER in connection with such
deliveries of number six Fuel Oil to Danskammer expressed in
cents per million Btu's based on 150,000 Btu per gallon as
received heat content.

          "Delivered Current Gas Price" shall be the price to the
BUYER of natural gas dispatched to the Danskammer Generating
Station to be burned in Units 3 and 4 plus an efficiency loss of
5% expressed in cents per million Btu's.

          "Delivered Current Spot Coal Price" shall be the price
to the BUYER for spot coal, having the same specifications as
provided in the Contract, delivered to the Danskammer Generating
Station to be burned in Units 3 and 4 expressed in cents per
million Btu's.

                          EXHIBIT NO. 1

Example IV

Delivered Current Coal Price

Assume the Current Base Price of Coal ($29.00 net per ton) +
freight charges
(Assume $23.00 net per ton for this example) divided by
 13,000 Btu x 2,000 Lbs
(----------------------)=$52.00 per ton / 26 = 200cent per Mmbtu.
       1,000,000





Delivered Current Oil Price

Assume the net price of oil delivered ($12.90 per Bbl) + New York
State Gross Receipts Tax ($0.37 per Bbl) = $13.27 = per Bbl

          150,000 Btu x 42 Gas
$13.27 / (--------------------)=$13.27 / 6.3 = 210cent per Mmbtu.
               1,000,000


Delivered Current Gas Price

Assume the dispatch price of natural gas (220 cent per Mmbtu.) +
efficiency loss 5% = 220 x 1.05 = 231 cent per Mmbtu.


Delivered Current Spot Coal Price

Assume the spot price for coal is $28.00 net per ton and the
freight charge is $21.00 net per ton.

             13,000 x 2,000 Lbs   49 per ton
$49.00/ton / ------------------ = ---------- = 188cent per Mmbtu.
                  1,000,000             26


     Therefore the Delivered Current Spot Coal Price is the
Lowest delivered price of the three fuels.  The Delivered Current
Coal Price would have to be reduced to equal the Delivered
Current Spot Coal Price of 188 cent per Mmbtu. in order to ship
the incremental tonnage train.  The BUYER must indicate to the
ASSIGNEE not later than the 22nd of the month preceding each
proposed incremental tonnage shipment if the then-Delivered
Current Price of oil, natural gas or spot coal is below the
Delivered Current Price of Coal.
















<PAGE>
                          EXHIBIT NO. 5

   EXAMPLES OF ADJUSTMENTS TO CURRENT BASE PRICES FOR QUALITY



PREIMUMS - xxxcent/100 Btu/Lb in excess of 13,000 Btu/Lb,
          fractions pro rata, on a shipment.

1.   Shipment Btu value is 13,050 Btu/Lb.  Btu Value falls within
     12,850 to 13,150 Btu/Lb range and, therefore, no premiums
     are due to ASSIGNEE.

2.   Shipment Btu Value is 13,200 Btu/Lb.  Premium due is:
          13,200 Btu/Lb - 13,000 Btu/Lb = 200 Btu/Lb X xxcent/100
          Btu/Lb =                                $x.xxx/Ton.

3.   Shipment Btu Value is 13,300 Btu/Lb.  Premium due is:
          13,300 Btu/Lb - 13,000 Btu/Lb = 300 Btu/Lb X xxcent/100
          Btu/Lb =                                $x.xxx/Ton.

PENALTIES - xxcent/100 Btu/Lb in deficit of 13,000 Btu/Lb,
          fractions pro rata, on a shipment.

1.   Shipment Btu Value is 12,950 Btu/Lb.  Btu Value falls within
     12,850 to 13,150 Btu/Lb range and, therefore, no penalties
     are charged to ASSIGNEE.

2.   Shipment Btu Value is 12,700 Btu/Lb.  Penalty charged is:
          13,000 Btu/Lb - 12,700 Btu/Lb = 300 Btu/Lb X xxcent/100
          Btu/Lb =                                $x.xxx/Ton.

3.   Shipment Btu Value is 12,750 Btu/Lb.  Penalty charged is:
          13,000 Btu/Lb - 12,750 Btu/Lb = 250 Btu/Lb X xxcent/100
          Btu/Lb =                                $x.xxx/Ton.

4.   Average Btu Value for January shipments is 12,850 Btu/Lb.
     Average Btu Value falls under 12,900.  Penalty charged is:
          13,000 Btu/Lb - 12,850 Btu/Lb = 150 Btu/Lb X xxcent/100
          Btu/Lb =                                $x.xxx/Ton

     on all January shipments not previously penalized.






CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.


<PAGE>
                          EXHIBIT NO. 6

       EXAMPLES OF ADJUSTMENT TO BASE PRICE FOR ASH VALUE


1.   If shipment ash value falls within 7.5% to 8.5% range no
     premium or penalty is incurred.


2.   If shipment ash value is 6.9% the premium due is 8.00% - 
     6.9% = 11 (tenths) x $x.xxx (ash value per .1%) = $x.xxx.
          Therefore, each ton of coal will receive a premium of
     $x.xxx added to the base price.


3.   If shipment ash value is 8.8% the penalty due is 8.8% - 8% =
     8 (tenths) x $x.xxx (ash value per .1%) = $x.xxx.
          Therefore, each ton of coal will receive a penalty of
     $x.xxx deducted from the base price."






























CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

</PAGE>

<PAGE>
                                             Exhibit (10)(i)105

THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN
REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                     FOURTH AMENDMENT TO THE
           AGREEMENT FOR THE SALE AND PURCHASE OF COAL

          THIS FOURTH AMENDMENT ("AMENDMENT"), dated as of
November 1, 1995 TO THAT AGREEMENT ("AGREEMENT") FOR THE SALE AND
PURCHASE OF COAL made and entered into as of the 1st day of
January 1987 by and between CENTRAL HUDSON GAS & ELECTRIC
CORPORATION, (hereinafter referred to as "BUYER") and KENTUCKY
CARBON CORPORATION (hereinafter referred to as "SELLER" or
"PRODUCER") and THE CARBON FUEL SALES COMPANY (hereinafter
referred to as "SALES AGENT") and as later assigned by "SELLER"
and "PRODUCER" with the consent of "BUYER" to MASSEY COAL SALES
COMPANY ("ASSIGNEE").

                           WITNESSETH:

          WHEREAS, Article I of the AGREEMENT provides that
beginning July 1, 1991, and six months prior to the end of each
contract year thereafter, BUYER, SALES AGENT and SELLER shall
commence good faith negotiations with respect to quantity,
quality and price of coal for the next Contract Year; and

          WHEREAS, the ASSIGNEE assumed the contractual
responsibilities of SALES AGENT and SELLER pursuant to an
AGREEMENT OF ASSIGNMENT, ASSUMPTION, CONSENT AND RELEASE dated
February 29, 1992, by and among BUYER, SALES AGENT and SELLER
(collectively referred to as "ASSIGNOR") and ASSIGNEE; and

          WHEREAS, notice was duly given and BUYER and ASSIGNEE
entered into good faith negotiations; and

          WHEREAS, after completion of good faith negotiations,
BUYER and ASSIGNEE desire to amend the AGREEMENT to provide for a
replacement pricing mechanism for coal sold and bought thereunder
and to revise certain other AGREEMENT provisions; and

          WHEREAS, THIS SECOND AMENDMENT replaces the FIRST
AMENDMENT TO THE AGREEMENT FOR THE SALE AND PURCHASE OF COAL,
dated November 1, 1991 in its entirety, effective January 1,
1994;

          WHEREAS, THIS THIRD AMENDMENT replaces the SECOND
AMENDMENT TO THE AGREEMENT FOR THE SALE AND PURCHASE OF COAL,
dated November 1, 1993 in its entirety, effective January 1,
1995.



          WHEREAS, THIS FOURTH AMENDMENT replaces the THIRD
AMENDMENT TO THE AGREEMENT FOR THE SALE AND PURCHASE OF COAL,
dated November 1, 1994 in its entirety, effective January 1,
1996.

          NOW, THEREFORE, in consideration of the premises and
the mutual covenants set forth herein, the parties hereto agree
as follows:


          1.   For only the Contract Year occurring during the
Calendar Year 1996, Article II (Deliveries), Article III
(Specifications and Quality and Weight), Article IV (Payment),
Article V (Base Price) and Article VII (Adjustment in Current
Base Price for Quality) of the AGREEMENT shall be respectively
amended in their entirety to read as follows:

                           ARTICLE II
                           DELIVERIES

          Section 1.     Quantities/Delivery Schedule:  Except as
provided for below, the quantity of coal sold and purchased
hereunder shall be a firm tonnage of no less than 240,000 tons
per year ("Firm Tonnage").  In addition, there will be 120,000
tons per year called incremental tonnage ("Incremental Tonnage")
which will be sold and purchased hereunder provided that the
delivered cost per million Btu's of oil, natural gas or spot coal
usable at BUYER's Danskammer Point Plant ("Danskammer Plant" or
"BUYER's Plant") exceeds the then-applicable delivered Current
Base Price of coal in delivered cost per million Btu's.

          The ASSIGNEE will assume that three trains of approxi-
mately 10,000 tons each will be loaded for shipment each month. 
Two of those trains will be Firm Tonnage and one will be
Incremental Tonnage.  The BUYER must indicate to the ASSIGNEE not
later than the 22nd of the month preceding each proposed
Incremental Tonnage shipment if the then current delivered price
of oil, natural gas or spot coal to the Danskammer Plant is below
the delivered Current Base Price of coal.  If such written notice
is not received by the ASSIGNEE by the 22nd then three trains
will be shipped the next month at the then Current Base Price. 
In the event such a written notice is received, and the ASSIGNEE
wishes to match the then current price of oil, natural gas or
spot coal as so delivered, the ASSIGNEE must notify the BUYER of
the same in writing not later than the last working day of that
month.  In the event that such notification is given then, the
coal will be shipped as scheduled, with the Incremental Tonnage
at the matched price and the Firm Tonnage at the then-Current
Base Price.  If the written notice to match the price is not
received by the BUYER by the last working day of the month, the
Incremental Tonnage train will not be shipped as scheduled.  The
ASSIGNEE reserves the right to re-offer any unshipped Incremental
Tonnage to the BUYER at another time in the ensuing 12 months
(commencing with the month during which the unshipped Incremental
Tonnage would otherwise have been shipped) at the then-Current
Base Price.  In each such instance, BUYER will then have the
option to accept that Incremental Tonnage or permanently cancel
that Incremental Tonnage.  The delivered coal cost, the delivered
oil cost, the delivered natural gas cost and the delivered spot
coal cost shall be determined as shown on Exhibit No. 1.

          Section 2.     Limitations on Quantities:  Notwith-
standing any of the above, BUYER will not be obligated to
purchase Firm and Incremental Tonnage coal from ASSIGNEE under
this AGREEMENT if BUYER is unable to utilize such coal because
the Danskammer Plant is not in "economic dispatch".  If, because
of economic reasons, the Danskammer Plant does not then require
all  coal contracted for under all then-existing contracts, BUYER
shall notify ASSIGNEE in writing and BUYER will reduce the
tonnage taken from all such contract suppliers on a proportional
basis.  The tonnage taken from each such contract supplier will
be in proportion to the annual Firm Tonnage in each such
contract.  In the event that contract shipments are so reduced,
BUYER will take no spot coal during the period of reduction. 
Following said period of reduction, BUYER will elect either to
increase shipments or to extend the Initial Term of this AGREE-
MENT until such deferred Firm and Incremental Tonnage has been
shipped in the total quantities provided for in this AGREEMENT. 
The prices for the tonnage then shipped will be the prices in
effect at time of shipment.  In the event the Initial Term is so
extended, the term of this AGREEMENT shall be extended for the
same number of days that the Initial Term was so extended and the
beginning and end of each Contract Year following such an
extension of the Initial Term shall be respectively set back for
the same number of days that the Initial Term was so extended and
the "Contract Year" shall be adjusted accordingly.

          Section 3.     Delivery Schedule Limitations:  All Firm
Tonnage necessary to meet the 20,000 tons per month schedule will
be delivered before any Incremental Tonnage is delivered.  Both
Firm Tonnage and Incremental Tonnage can be delivered during the
same month, but ASSIGNEE will not be obligated to deliver more
than four (4) 10,000 ton shipments of coal during any one month,
unless otherwise mutually agreed.  There shall be a minimum of
seven (7) calendar days between shipment releases from the
Operations unless otherwise mutually agreed.

          Section 4.     Passage of Title:  The coal sold and
delivered to BUYER hereunder is f.o.b. railway car at the Opera-
tions; and, title to and risk of loss of the coal supplied
hereunder shall pass to BUYER when ASSIGNEE completes loading
coal and tenders the loaded cars to the carrier for destination
to BUYER's Plant.

          Section 5.     Initial Quality Notification:  The
parties recognize the need to know the quality of the coal prior
to receipt of the shipment at the Danskammer Plant.  Therefore,
the coal shall be sampled as it is loaded into railway cars and
analyzed by an independent laboratory acceptable to BUYER and
ASSIGNEE within 48 hours after the coal is loaded, who shall
notify BUYER and ASSIGNEE by telephone, telegram, or facsimile of
the average "as received" analytical results of each shipment. 

          Section 6.     Shipping Notice:  For each shipment of
coal hereunder, ASSIGNEE shall promptly mail to BUYER's Plant and
to Financial Records Section, Central Hudson Gas & Electric
Corporation, 284 South Avenue, Poughkeepsie, New York 12601-4879,
a shipping notice showing weight, type of car and number of each 

railway car contained in the shipment, shipping date and origin
mine.

          Section 7.     Railroad:  Except as otherwise expressly
provided herein, ASSIGNEE shall deliver coal sold and purchased
hereunder in accordance with the contract between BUYER and
railroad and the applicable railroad tariff provisions all as
specified in Exhibit 2 - RAILROAD PROVISIONS, attached hereto and
made a part hereof.  BUYER shall be responsible for providing any
applicable amendments or revisions to said railroad tariff
provisions to ASSIGNEE.

          BUYER shall cooperate with ASSIGNEE in its scheduling
of work at its Operations, shall be responsible for arranging and
coordinating with the railroad (also referred to herein as
"carrier") the arrival of rail cars for loading.  BUYER shall pay
carrier for all rail transportation charges for coal purchased
from ASSIGNEE under this AGREEMENT, except as provided for in the
remainder of this Section 7.

          ASSIGNEE will pay all additional freight charges,
required by BUYER's rail transportation agreements or the
applicable railroad tariffs, on coal delivered hereunder that are
a result of ASSIGNEE's failure to deliver the quantity of coal as
scheduled by BUYER, in accordance with this AGREEMENT unless the
tonnage deficiency is excused by other provisions of this
AGREEMENT.

          BUYER shall be responsible for payment of any and all
increased freight charges which result solely from or on account
of the coal being shipped to more than one destination. 

          ASSIGNEE shall pay all additional freight charges,
required by the applicable railroad tariffs or BUYER's rail
transportation agreements on coal delivered hereunder that are a
result of ASSIGNEE's failure to notify the railroad, in writing,
in accordance with the applicable railroad tariffs or BUYER's
rail transportation agreement, of ASSIGNEE's inability to make
shipment as scheduled.

          ASSIGNEE shall pay all detention and switching charges
at ASSIGNEE's Operations resulting from ASSIGNEE's failure to
load and ship the coal in accordance with the applicable railroad
tariffs or BUYER's rail transportation agreement.  ASSIGNEE shall
load coal so as to permit loading of 10,000-ton trains within a
24-hour period. 

          ASSIGNEE shall pay all charges resulting from
overloading or underloading cars in accordance with the
applicable tariffs or BUYER's rail transportation agreement.

                           ARTICLE III
                SPECIFICATIONS & QUALITY & WEIGHT

          Section 1.     Origin:  The coal shall be from the
Sidney Pond Creek Seam or other such seams as approved and con-
firmed in writing by BUYER and which meets the specifications
herein.  Deliveries shall originate from ASSIGNEE's Sidney Mine
unless other arrangements are made and confirmed in writing with
BUYER to deliver coal from another facility.

          Section 2.     Quality Specifications:  The quality of
coal sold and purchased hereunder shall meet the following
specifications:
                                                          ASTM
                         Expected   Minimum   Maximum    Method
As Received:
 Moisture %                  6.1         4        10     D3173
 Volatiles %                34.9        30        36     D3175
 Fixed Carbon %               51        47        60     D3172
 Ash %                       8.0        --        10     D3174
 Btu/LB.                  13,000    12,500        --     D3286
 Sulphur %                  0.66      0.47      0.70   D3177/4239
 SO2 (LBS./MMBTU)            1.0        --       1.1   Calculated
 Grind (HGI)                  52        48        60     D409-85
   Sidney Pond Creek Only     42        40        --     D409-85
 Ash Fusion (I.D., F)      2,700     2,300               D1587

          This coal shall be free of extraneous material and
shall have a maximum top size of two inches.

          Section 3(a).  BUYER's Remedies Related to Quality
Specifications:  In lieu of any other remedies related to
ASSIGNEE's failure to meet the quality specifications provided
for herein, except for the price adjustments for quality provided
for in Article VII herein, BUYER shall have the rights and
remedies described in this Section 3 upon ASSIGNEE's failure to
deliver coal in accordance with the specifications set forth in
Sections 2 and 3 of this Article III.

                   (b).  BUYER's Right to Reject Individual
Shipments:  BUYER's ability to use the coal being dependent on 
the coal meeting the specifications set forth above, it is agreed
that BUYER shall have the right to reject any and all shipments
which fail to meet any of the individual shipment rejection
limits shown below:

              INDIVIDUAL SHIPMENT REJECTION LIMITS

          Sulphur                         0.7% Maximum 
          Volatiles                        25% Minimum
          Ash Fusion (I.D.)            2,300 F Minimum
          Grind (HGI)                       47 Minimum
            Sidney Pond Creek Only          39 Minimum
          Btu                           12,500 Minimum
          SO2 (LBS./MMBTU)                 1.1 Maximum

          ASSIGNEE shall pay all freight, diversion, demurrage,
testing and other expenses in connection with any such rejected
shipment, or shipment found by ASSIGNEE to be non-conforming,
unless such shipment is accepted by BUYER.  Furthermore, ASSIGNEE
certifies that it will not make any shipment shown by sampling
and analyses to exceed the Maximum allowable Sulphur levels or to
be below the Minimum acceptable Btu level.

                   (c).  BUYER's Right to Suspend or Have Price
Adjustments For Moisture/Ash Limitations:  In addition to the
limits for individual shipments shown in Section 3(b) above, the 
delivered coal must meet the following weighted average specifi-
cations for each six (6) consecutive shipments (first through
sixth, seventh through twelfth, thirteenth through eighteenth,
and so on):

                SIX CONSECUTIVE SHIPMENTS LIMITS

                 Ash               10% Maximum
                 Moisture          10% Maximum

          If the weighted average ash or moisture quality of coal
in a series of six (6) consecutive shipments delivered hereunder,
as determined by sampling and analysis, does not meet the above
Six Consecutive Shipments Limits, BUYER shall have the right to
suspend further shipments under this AGREEMENT or to have the
Current Base Price for such coal adjusted all in accordance with
the following:

                    (i)  BUYER's Right to Suspend:  In the event
six consecutive shipments do not so meet said Six Consecutive
Shipments Limits, BUYER shall thereupon have the right to suspend
shipments under this AGREEMENT until ASSIGNEE has furnished
reasonable assurance to BUYER in writing that the deviation from
such limits or specifications can and will be corrected.  If
ASSIGNEE fails to promptly furnish reasonable assurance that such
correction can and will be made within 60 days after BUYER's
suspension of shipments (or within such longer period as shall be
reasonably requested by ASSIGNEE and agreed to in writing by
BUYER), or if corrections are not made within such 60-day period
(or such longer period agreed to by BUYER), BUYER shall have the
right at any time thereafter to terminate this AGREEMENT by
giving written notice of such termination to ASSIGNEE, and
thereupon BUYER shall stand discharged of any and all further
obligations or liability under the terms of this AGREEMENT or as
a result of such termination without waiver of any rights that
BUYER may have under this AGREEMENT.  If BUYER, after having
suspended shipments for a period of 180 days, has not elected to
terminate this AGREEMENT, then ASSIGNEE shall have the option of
terminating this AGREEMENT by giving BUYER written notice of such
termination within 60 days after the expiration of such 180-day
period;

                    (ii) BUYER's Right to Price Adjustment:  In
the event six consecutive shipments do not meet the Six Consecu-
tive Shipments Limits, as an alternative to suspending shipments
as provided for above, BUYER may cause ASSIGNEE to adjust Current
Base Price for such coal (in addition to any adjustment for
quality as provided in Article VII) for such failure of the
delivered coal to meet the Six Consecutive Shipments Limits, as
follows:

                    (1)  For each one percent the ash of such
               coal exceeds the Six Consecutive Shipments Limits,
               the Current Base Price, adjusted, to be paid
               ASSIGNEE by BUYER for such shipment shall be
               reduced by one dollar ($1.00), fractions pro rata;
               and also

                    (2)  For each one percent the moisture of
               such coal exceeds the Six Consecutive Shipments
               Limits, the Current Base Price, adjusted, to be
               paid ASSIGNEE by BUYER for such shipments shall be
               reduced by one dollar ($1.00), fractions pro rata.

          The analyses obtained in accordance with Article ___,
with respect to moisture and ash, shall be the analyses upon
which rejection of shipments, as provided in Section 3(b) above
and application of Current Base Price adjustments or suspension
of shipments, as provided in this Section 3(c), is based. 
Sampling and analyses shall be in accordance with ASTM standards
and tolerances.

                   (iii)  Effect of Termination:  In the event
that BUYER exercises its right to terminate this AGREEMENT
pursuant to above Section 3(c)(i), or ASSIGNEE exercises its
right to terminate this AGREEMENT under said Section, neither
party shall have any further obligations or liabilities hereunder
from and after the effective date of such termination, provided, 

however, that such termination shall not affect the rights or
obligations of the parties which accrued prior to the effective
date of termination.

                   (d).  Grind Limitations:  In addition to the
limits for individual shipments shown in Section 3(b) above and
the Limitations for Six Consecutive Shipments shown in Section
3(c) above, the delivered coal must meet the following weighted
average specifications for each three consecutive shipments
(first through third, fourth through sixth, seventh through
ninth, and so on):

               THREE CONSECUTIVE SHIPMENTS LIMITS
            Grind (HGI)                    48 Minimum
            Sidney Pond Creek Only         40 Minimum

          If the average grind of coal in a series of three (3)
consecutive shipments delivered hereunder, as determined by
sampling and analysis, does not meet the above Three Consecutive
Shipments Limits, BUYER shall have the right to reject any of the
immediately following three (3) consecutive shipments in the
event that such shipment does not meet said Minimum Grind (HGI)
limitation.  The basis of any such rejection shall be the
averaged results of 3 different independent laboratories as
provided for in Article ___.

          Section 4.     ASSIGNEE's Duty of Care:  ASSIGNEE
shall, at all times, exercise reasonable care and diligence in
its efforts to ship to BUYER coal which conforms to the
specifications set forth in above Section 2 and 3.  Nothing in
this Article III shall be construed to relieve ASSIGNEE of its
obligation to conduct its mining and coal cleaning operations in
a competent manner, consistent with good industry practices, so
as to produce coal which will meet the specifications set forth
above.

          Section 5.     Weight Measurement:  The weight of coal
sold hereunder shall be determined on BUYER's scales at the
Danskammer Plant, which scales shall be maintained and certified
in accordance with the provisions of Exhibit No. 3.  If such
scales are inoperative at the time of any coal delivery, the
weight of coal shall be the weight upon which BUYER bases its
payment to the railroad.

                           ARTICLE IV
                             PAYMENT

          Section 1.     Price:  For coal delivered and accepted,
BUYER shall pay ASSIGNEE the Current Base Price herein provided
by cash or check in United States Funds for all coal delivered,
and accepted hereunder. 

          Section 2.     Submission of Weight to ASSIGNEE:  BUYER
shall submit to ASSIGNEE the certified weights within five (5)
working days after the certified weights become available.

          Section 3:     Invoice:  Thereafter, an invoice for any
adjustments for quality as hereinafter defined, and all coal
shipped based on certified weights will be submitted by the
ASSIGNEE to the BUYER.  The coal shipped will be invoiced at the
Current Base Price (hereinafter defined).

          Section 4:     Payment:  BUYER shall make payment to
ASSIGNEE within thirty (30) calendar days from shipment of the
coal from the Operations.  There shall be no discounts.

          Payment to ASSIGNEE shall be made by check, as follows:
                    Massey Coal Sales Company
                    P.O. Box 26765
                    Richmond, Virginia  23261

The above address may be changed by ASSIGNEE upon written notice
to BUYER.

                            ARTICLE V
                        CURRENT BASE PRICE

          Section 1:     The Current Base Price for Firm Tonnage
and Incremental Tonnage for the Contract Year 1996 shall be
$xx.xx (U.S. Dollars) per net ton, except as otherwise provided
in THIS THIRD AMENDMENT, f.o.b. railcar at ASSIGNEE's loading
facility.

          Section 2.     The Current Base Price shall be subject
to adjustment for BTU Value and Ash Value as provided for herein.


                           ARTICLE VII
          ADJUSTMENT IN CURRENT BASE PRICE FOR QUALITY

          Section 1.     BTU Value:  The Current Base Price and
matching incremental price to be paid to ASSIGNEE by BUYER is
based upon coal with 13,000 BTU/LB heat content (BTU Value) for
each ton of coal in each shipment.  The BTU Value of the coal
sold hereunder may vary, and the price for such coal shall be
adjusted to compensate for variations in BTU Value, as described
below. 

          Section 2.     Adjustments for BTU Value:  If the BTU
Value of the coal shipment is between 12,850 BTU/LB and 13,150
BTU/LB, there will be no adjustment for BTU Value variation.  If
the BTU Value is less than 12,850 BTU/LB or greater than 13,150
BTU/LB, the price for a shipment shall be adjusted, based upon
variations from the 13,000 BTU/LB BTU Value, as follows:

          (a)  For a coal shipment with a BTU Value greater than
13,150 BTU/LB, a premium shall be paid by BUYER to ASSIGNEE at
the rate of xxcent/100 BTU/LB, fractions pro rata; or

          (b)  For a coal shipment with a BTU Value less than
12,850 BTU/LB, a penalty shall be deducted from the Current Base
Price at the rate of xxcent/100 BTU/LB, fractions pro rata.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

          (c)  If the weighted average BTU Value for all ship-
ments shipped in any one month, excluding the BTU Value on ship-
ments on which a penalty was previously applied, is less than
12,900 BTU/LB, then the Current Base Price as applied to such
shipments, excluding shipments on which a penalty was previously
applied, shall be retroactively reduced at the rate of xxcent/100
BTU/LB, fractions pro rata.

          Exhibit No. 5 illustrates adjustments for BTU Value to
the Current Base Price.

          Section 3.     Ash Value:  The Current Base Price and
matching incremental price to be paid to ASSIGNEE by BUYER is
based upon coal with an ash content ("Ash Value") of eight
percent (8%) by weight of the "as received" analysis for the coal
in each shipment.  The Ash Value of the coal sold hereunder may
vary and the price shall be adjusted to compensate for variations
as described below.

          Section 4.     Adjustment for Ash Value:  If the Ash
Value of the coal shipment is between 7.5% and 8.5%, there will
be no adjustment for ash content.  If the Ash Value is less than
7.5% or greater than 8.5% the price for a shipment shall be
adjusted, based upon variations from 8% as follows:

          (a)  For a coal shipment with an Ash Value less than
7.5%, a premium of $x.xxx per ton shall be paid to ASSIGNEE for
each .1% Ash Value variation below 8.0%.

          (b)  For a coal shipment with an Ash Value greater than
8.5%, a penalty of $x.xxx shall be deducted from the price for
each .1% Ash Value variation in excess of 8.0%."

          2.   Commencing on January 1, 1996 and continuing for
the remaining term of this AGREEMENT, Articles II, III, IV, V and
VII of the AGREEMENT shall respectively read as they are set
forth in the AGREEMENT and not how they are set forth in the
SECOND, THIRD or FOURTH AMENDMENT unless otherwise agreed upon by
the parties hereto.

          3.   For only the Contract Year occurring during the
Calendar Year 1996, Article VI (Base Price Adjustment) shall have
no force and effect and, for that Contract Year, be deemed
deleted in its entirety from the AGREEMENT.

          4.   Except as may be amended herein, all terms and
conditions of the AGREEMENT shall remain in full force and effect
as of the date of this FOURTH AMENDMENT.  The addresses of the
parties hereto are as set forth in the AGREEMENT.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

          5.   All terms defined in the AGREEMENT shall have the
same meaning in the FOURTH AMENDMENT unless otherwise defined
herein.

          6.   For only the Contract Year occurring during the
Calendar Year 1996, Exhibit 1 (Calculations of Delivered Fuel
Costs) and Exhibit 5 (Examples of Adjustments to Current Base
Prices for Quality) to the AGREEMENT shall be respectively
amended in their entirety to read in the form attached to the
FOURTH AMENDMENT.

          7.   For only the contract year occurring during the
Calendar Year 1996, Exhibit 6, attached hereto, shall be an
Exhibit to the AGREEMENT.



<PAGE>
          IN WITNESS WHEREOF, each party hereto has caused this
AGREEMENT to be executed in its behalf by its proper officer
thereunder duly authorized, all as of the day and year first
above written.




BUYER:    CENTRAL HUDSON GAS & ELECTRIC CORPORATION


          
BY   (SGD.) PAUL J. GANCI
     Paul J. Ganci
ITS  President and Chief Operating Officer         


ASSIGNEE:  MASSEY COAL SALES COMPANY

BY   (SGD.) TOM MCQUADE
     Tom McQuade
ITS  Senior Vice President































</PAGE>

<PAGE>
                                             Exhibit (10)(i)104


THIS EXHIBIT CONTAINS CONFIDENTIAL INFORMATION WHICH HAS BEEN
REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                    FUEL OIL SUPPLY CONTRACT

                             BETWEEN

                    MONTELLO OIL CORPORATION

                               AND

            CENTRAL HUDSON GAS & ELECTRIC CORPORATION

          CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

                               AND

                NIAGARA MOHAWK POWER CORPORATION




             CENTRAL HUDSON CONTRACT NO. __________

<PAGE>
                        TABLE OF CONTENTS


   SECTION                                                 PAGE
   NUMBER               TITLE                              NUMBER

    1.0           PARTIES                                    1
    2.0           RECITALS AND CONSIDERATION                 2
    3.0           DEFINITIONS                                3
    4.0           TERM                                       5
    5.0           QUANTITY                                   6
    6.0           TITLE, WARRANTIES AND RISK OF LOSS         8
    7.0           QUALITY                                    9
    8.0           DELIVERY                                  11
    9.0           PRICE AND PAYMENT                         15
   10.0           INDEMNIFICATION                           23
   11.0           FORCE MAJEURE AND NONPERFORMANCE          24
   12.0           COMPLIANCE WITH LAWS, REGULATIONS,
                  CODES AND STANDARDS                       26
   13.0           TAXES                                     27
   14.0           PROPRIETARY INFORMATION                   29
   15.0           NONWAIVER                                 30
   16.0           EFFECT OF SECTION HEADINGS                31
   17.0           APPLICABLE STATE LAW                      32
   18.0           ASSIGNMENT                                33
   19.0           NOTICES AND CORRESPONDENCE                34
   20.0           ARBITRATION                               36
   21.0           COMPLETE AGREEMENT                        37
   22.0           EMPLOYEE INTEREST                         38
   23.0           REPRESENTATIONS AND WARRANTIES
                  OF BOTH PARTIES                           39

ATTACHMENTS:      #6 RESIDUAL FUEL OIL
   ATTACHMENT I-A - 1.5% SULFUR SPECIFICATIONS              41
   ATTACHMENT I-B - 1.3% SULFUR SPECIFICATIONS              42
   ATTACHMENT I-C - 1.0% SULFUR SPECIFICATIONS              43
   ATTACHMENT I-D - 0.3% SULFUR SPECIFICATIONS              44
   ATTACHMENT II  - POSTED PRICE SCHEDULES                  45
<PAGE>
August 31, 1995


                    FUEL OIL SUPPLY CONTRACT

 1.0   PARTIES

       The Parties hereto ("Parties") enter into this Product
       Supply Contract ("Contract") to be effective as of
       September 1, 1995.

       The Parties hereto are:

 1.1   Central Hudson Gas & Electric Corporation, 284 South
       Avenue, Poughkeepsie, NY  12601-4879, Consolidated Edison
       Company of New York, Inc., 4 Irving Place, New York, NY 
       10003, and Niagara Mohawk Power Corporation, 300 Erie
       Boulevard, West, Syracuse, NY  13202 (collectively
       "BUYER")

 1.2   Montello Oil Corporation
       800 South Street
       Box 9161
       Waltham, MA  02254-9161 ("SELLER")




























                              - 1 -
<PAGE>
August 31, 1995


 2.0   RECITALS AND CONSIDERATION

       Whereas this Contract is made with reference to the
       following facts:

 2.1   SELLER, a New Jersey Corporation, existing under the laws
       of the State of New Jersey, is engaged in the sale and
       delivery of Product (as said term is defined herein.)

 2.2   BUYER, three public utilities organized and existing under
       the laws of the State of New York, is engaged in the
       generation, transmission and distribution of electric
       energy.

 2.3   SELLER has offered to sell to BUYER Product of quantity
       and quality specifications as set forth herein.

 2.4   SELLER and BUYER desire by this Contract to define terms,
       conditions, rights, obligations, and remedies with respect
       to the purchase and sale of said Product.  
       IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER SET
       FORTH, SELLER and BUYER hereby mutually agree as follows:


























                              - 2 -
<PAGE>
August 31, 1995


 3.0   DEFINITIONS

       When used herein with initial capitalization, whether in
       the singular or plural, the following terms shall have the
       following meanings:

 3.1   Barrel

       Refers to a standard barrel of Product containing forty-
       two (42) U.S. gallons when measured at sixty degrees
       Fahrenheit (60 degree) according to Table 6B of the latest
       revisions of ASTM-IP Petroleum Measurement Tables, ASTM
       Designation:  D-1250, IP Designation:  200, as supple-
       mented or amended.  Unless mutually agreed by the Parties,
       the then most recent revision of these tables at the time
       of use will be utilized.

 3.2   Contract

       This document, including all other Contract documents
       specifically identified and incorporated herein by
       reference.

 3.3   Contract Volume

       The quantity of Product which SELLER is obligated to sell
       and deliver to BUYER in accordance with this Contract.

 3.4   Contract Year

       The period of September 1 through August 31.

 3.5   Delivery Point

       BUYER's terminal ("Terminal") at its Roseton Electric
       Generating Station ("Roseton Plant") to which SELLER will
       make deliveries of Product in accordance with this
       Contract.

 3.6   Heating Value

       Refers to the Heating Value of Product as measured in BTU
       per gallon using ASTM Test designation D-240 as
       supplemented or amended.  Unless mutually agreed by the
       Parties, the most recent revision of this test will be
       utilized.


                              - 3 -
<PAGE>
August 31, 1995


 3.7   Inspector

       Independent contractor retained to determine the quantity
       and quality of petroleum product delivered.

 3.8   Party or Parties

       BUYER and/or SELLER

 3.9   Product

       No. 6 residual fuel oil of the quality and in the quantity
       required to be provided by SELLER in accordance with this
       Contract.

 3.10  Vessel

       Any watercraft such as tanker or barge used or capable of
       being used as a means of transporting and delivering the
       Product to the Delivery Point.

 3.11  Miscellaneous Terms

       Where "as directed," "as required," "as approved," "as
       accepted," or words of like import are used, it is
       intended that such direction, requirement, approval or
       acceptance be given by the BUYER.





















                              - 4 -
<PAGE>
August 31, 1995

 4.0   TERM

 4.1   The Initial Term of this Contract shall be a period of one
       (1) year from September 1, 1995 through August 31, 1996. 
       The Term of the Contract shall automatically be extended
       on a yearly basis for each successive Contract Year
       thereafter until the Contract is terminated or canceled by
       either Party in accordance with the terms and procedures
       provided herein.  The word "Term" as used herein shall
       mean the Initial Term and any such extensions.

 4.2   Termination by Notice
       BUYER may terminate this Contract, effective as of the end
       of the Initial Term or any subsequent Contract Year, by
       giving written notice to the SELLER at least sixty (60)
       days prior to the end of such Initial Term or subsequent
       Contract Year.  Specifically, said written notice is due
       on or before July 2 of the then-current Contract Year.

       SELLER may terminate this Contract, effective as of the
       end of the Initial Term or any subsequent Contract Year,
       by giving written notice to the BUYER at least one hundred
       eighty (180) days prior to the end of such Initial Term or
       subsequent Contract Year.  Specifically, said written
       notice is due on or before March 4 of the then-current
       Contract Year.

 4.3   BUYER's Right to Adequate Assurance
       If, during the Term of this Contract, the SELLER's ability
       to meet its obligations under this Contract becomes
       impaired to the point that BUYER has reasonable grounds
       for believing that SELLER may not be able to meet such
       obligations, then BUYER, by a written notice to SELLER,
       may require that SELLER provide adequate assurance that
       SELLER is able to continue to meet its obligations under
       this Contract.  If such adequate assurance is not received
       by BUYER within ten (10) days from receipt of BUYER's
       request thereof, BUYER shall have the right to immediately
       reduce, by the amount in question, BUYER's obligation to
       purchase Product from SELLER.  BUYER may obtain the amount
       of said reduction through purchases from third parties;
       such reduction to be reflected in a notice from BUYER to
       SELLER which thereupon shall become an amendment to this
       Contract. BUYER may subsequently restore its purchases of
       Product to the full amount provided for in this Contract
       at BUYER's sole discretion to be reflected in a notice
       from BUYER to SELLER which thereupon shall become an
       amendment to this Contract.

                              - 5 -
<PAGE>
August 31, 1995


 5.0   QUANTITY

 5.1   Contract Volume

       The Contract Volume of Product to be sold and purchased
       hereunder during the Term shall be one hundred (100)
       percent of BUYER's total Product requirements for such
       Term for its Roseton Plant.  In this regard, during such
       Term, SELLER will deliver all amounts of the Product
       requested by BUYER for its Roseton Plant; but SELLER is
       not obligated to so deliver the Product in excess of the
       Contract Volume and BUYER will request from SELLER not
       less than seventy percent (70%) of the Contract Volume. 
       In the event BUYER, from time to time during the Term of
       this Contract, seeks to purchase Product on the spot
       market to be used at the Roseton Plant; SELLER shall be
       entitled to submit a spot bid.

       All deliveries of Product shall be evenly spread over the
       Initial Term and subsequent Contract Year(s) unless
       otherwise agreed upon by the Parties and confirmed in
       writing.

 5.2   The volumes shown are estimates of the Contract Volume for
       each month of the Initial Term.  The volumes shown allow
       for gas firing.  It is recognized that actual Product
       requirements may vary from said estimates.


       MONTH                ESTIMATED CONTRACT VOLUME (Barrels)

       SEPTEMBER 1995                                0
       OCTOBER                                       0
       NOVEMBER                                400,000
       DECEMBER                                400,000
       JANUARY 1996                            400,000
       FEBRUARY                                400,000
       MARCH                                   400,000
       APRIL                                   200,000
       MAY                                           0
       JUNE                                          0
       JULY                                    200,000
       AUGUST                                  200,000  
            TOTAL                            2,600,000  




                              - 6 -
<PAGE>
August 31, 1995


 5.3   BUYER shall furnish to SELLER by the fifth day of each
       calendar month during the TERM of the Contract, a written
       schedule of desired deliveries for the following three (3)
       months.  Each schedule for the first month following shall
       include proposed five-day date ranges for deliveries.  The
       parties will attempt in good faith to accommodate
       subsequent changes in deliveries to the extent mutually
       satisfactory.  Each schedule for the second and third
       months following will indicate total volumes BUYER expects
       to request from SELLER during those months.  Delivery
       parcels shall be 200,000 barrels plus or minus ten percent
       at SELLER's option.

       SELLER shall have a two (2) bottom option for each
       delivery nomination in which event no individual parcel
       shall be less than 70,000 barrels.

 5.4   The quantity and quality of Product delivered or made
       available hereunder, and those characteristics necessary
       for quantity inspection (temperature and API gravity),
       shall be determined at the time of each delivery by an
       Inspector designated by  BUYER and acceptable to SELLER,
       who, at such time, shall issue certificates showing the
       quantity and quality of Product delivered.  The costs of
       the service of said Inspector will be shared equally by
       SELLER and BUYER.

 5.5   Quantities of Product delivered shall be measured by
       comparing opening and closing gauges of BUYER's shore
       tanks into which the Product is delivered, in accordance
       with recognized petroleum industry standards applicable
       thereto.  Temperature adjustments to 60 degrees F shall be
       made in accordance with Table 6B of ASTM-IP Petroleum
       Measurement Tables, ASTM Designation:  D-1250, IP Designa-
       tion:  200, as supplemented or amended.  Unless mutually
       agreed otherwise by the Parties, the then most recent
       revision of these tables at the time of use shall be
       utilized.










                              - 7 -
<PAGE>
August 31, 1995


 6.0   TITLE, WARRANTIES AND RISK OF LOSS 


 6.1   SELLER warrants it will convey good title to the Product
       supplied hereunder, free and clear of all liens, special
       interests, encumbrances or any other interests of third
       parties whatsoever, and that the Product supplied
       hereunder will meet all the quality specifications of this
       Contract.


 6.2   Title to and risk of loss for Product delivered to BUYER
       by SELLER shall pass from SELLER to BUYER as the Product
       passes through the Vessel's last flange connecting the
       permanent discharge manifold to the Terminal's mechanical
       arms or hose facility at the point of discharge at the
       Delivery Point.































                              - 8 -
<PAGE>
August 31, 1995


 7.0   QUALITY

 7.1   SELLER shall sell to BUYER Product which meets the quality
       specifications for one and one-half (1.5%) percent, one
       and three-tenths (1.3%) percent, one (1.0%) percent and
       three tenths (0.3%) percent maximum sulfur fuel as set
       forth in Attachment I-A, I-B, I-C and I-D (collectively
       termed "Attachment I") to this Contract, which are
       incorporated herein and made a part hereof.  BUYER will
       not accept and will not allow discharge of any non-
       conforming Product and all costs associated with such non-
       conforming Product will be for SELLER's account.

7.2    SELLER shall notify BUYER by teletype, TWX, telegram or by
       other similar means of communication not more than twenty-
       four (24) hours or as soon as practical after each Vessel
       sails from its port of loading, specifying the name of
       Vessel, sulfur quality and quantity of Product and
       scheduled date of arrival at Delivery Point.  SELLER shall
       provide BUYER by teletype, TWX, telegram or other similar
       means of communication at least twenty-four (24) hours
       prior to discharge, a copy of quality specifications of
       the Product certified by an Inspector based upon a loading
       port sample.  

       If the sulfur as tested in this loading port sample is
       greater than or equal to 1.48% for 1.50% maximum sulfur
       Product then a second sulfur test on a second sample of
       the Product to be delivered must be performed and the
       results thereof communicated to BUYER prior to the
       discharge of Product at the delivery point.  If the second
       test yields a sulfur test result at or below 1.5%, the
       Product will be accepted.  Product tested greater than
       1.5% sulfur on the second test will be rejected.  If the
       sulfur as tested in the loading port sample is greater
       than or equal to 1.28 for 1.3% maximum sulfur Product or
       .985% for 1.0% maximum sulfur Product, then the same
       second sampling and sulfur testing provision will apply. 
       Costs of the second sampling and testing will be shared
       equally by BUYER and SELLER.

       Upon arrival of the Vessel at the Delivery Point, the
       Inspector referred to in Subsection 5.4 herein shall
       obtain, by recognized industry procedures, a sample of the
       Product to be tested and a sample to be sealed and
       retained for ninety (90) days.  The results of the tested
       sample shall be reported as specified in Subsection 5.4 

                              - 9 -
<PAGE>
August 31, 1995

       herein.  If there is any dispute as to the results of the
       quality analysis, the sealed sample of the delivery in
       question held by the Inspector, who inspected the Product
       upon arrival, shall be submitted to an independent
       laboratory, mutually agreeable to the Parties, whose
       determinations made in accordance with the test methods
       stated in Attachment I shall be final, binding and
       conclusive upon the Parties as to the disputed quality
       analysis.  The cost of such testing shall be borne equally
       by the Parties.

7.3    BUYER shall have the right to require the removal and
       proper disposal by SELLER, at SELLER's cost, of any
       Product sold to BUYER by SELLER which is not in accordance
       with the Contract's quality specifications, whether the
       noncompliance is found during discharge, or whether BUYER,
       through Inspectors, or by other means, demonstrates to
       SELLER that the source of noncompliance is the Product, at
       any time after the delivery is made.  If nonconforming
       Product is not removed by SELLER, at the end of seven (7)
       days from the date on which BUYER's written notice is
       received by SELLER, BUYER may have the Product removed at
       SELLER's expense.

 7.4   Any delay to Vessel(s) caused by delivery of Product which
       proves to be nonconforming and removal and disposal of
       such nonconforming Product from tank(s) shall be to
       SELLER's account.  If Product proves to be conforming,
       then such delay shall be to BUYER's account.

7.5    BUYER shall have the right by notice to SELLER, by
       teletype, TWX, telegram or other similar means for
       communication, to change the quality specifications set
       forth in Attachment I to other specifications, whether
       more or less restrictive, in order for BUYER to satisfy
       federal, state or local legal or regulatory requirements. 
       SELLER shall make its best efforts to provide the required
       Product.  However, if SELLER is not able, within thirty
       (30) days prior to the date BUYER requires such changed
       Product as specified in BUYER's notice to SELLER, to
       commit such Product to BUYER, then as of the date the
       Product is required by BUYER, BUYER may reduce BUYER's
       obligations to purchase from SELLER by the quantity of
       Product which SELLER does not make available as specified
       in BUYER's notice to SELLER and obtain the amount of such
       reduction through purchases from third parties; such
       reduction to be reflected in a notice from BUYER to SELLER
       which thereupon shall become an amendment to this
       Contract.
                             - 10 -
<PAGE>
August 31, 1995


 8.0   DELIVERY

 8.1   BUYER will provide a safe discharging berth, free of
       wharfage or dockage charges, to which Vessels may proceed
       and from which they may depart, and where they may lie
       safely afloat while discharging the Product.  With
       assistance as necessary from BUYER's dockside personnel,
       it shall be the responsibility of SELLER to secure the
       Vessel to BUYER's berth prior to such discharging of the
       Product.  Hoses, mechanical arms and hose adapters for
       discharging Product shall be furnished by BUYER at the
       Delivery Point without cost to SELLER.  Such hoses or arms
       shall be connected to and disconnected from Vessel's
       permanent discharge manifold flange connection by BUYER. 
       Vessel must have any adapters required to connect to
       BUYER's two (2) ten-inch flanges.

       Roseton Dock Limitations:

       -  LOA - 890 Feet Maximum
       -  Beam - No Restriction
       -  Bow to Centerline Manifold - None
       -  Water Depth in Berth - 36+ Feet MLW
          (Operational Draft 31 Feet MWH Channel at Haverstraw is
          Limiting)
       -  Shore Connection - Two (2) ten-inch flanges
       -  Docking is only permitted during the hours of 8 AM
          through 12 Midnight Eastern Time Zone (unless special
          arrangements are made with BUYER) 7 days per week. 
          Notice of arrival must be given to the Roseton Plant
          personnel by SELLER or SELLER's agents at least 24
          hours prior to actual arrival.

 8.2   BUYER shall pay demurrage charges at Charter Party Rates
       per running hour and pro rata for any part of an hour for
       all time that discharging and used laytime exceed the
       laytime allowed BUYER under Subsection 8.4 herein.  If
       deliveries are made by Time Charter Vessel, Charter Market
       Reports of Dietze, Inc., Stamford, Connecticut, or any
       recognized successor thereto, shall be accepted as
       evidence of the actual foregoing rates.  If, however,
       demurrage is incurred at Delivery Point by reason of fire,
       explosion, storm, strike, lockout stoppage, restraint of
       labor or by breakdown of machinery and equipment in or
       about BUYER's terminal facilities or plants, the rate of
       demurrage shall be reduced to one-half per running hour
       and pro rata for part of an hour for demurrage so 

                             - 11 -
<PAGE>
August 31, 1995

       incurred.  In the event SELLER's Vessel arrives at
       Delivery Point outside its agreed upon five-day date range
       and provided SELLER has not obtained BUYER's permission
       for such early or late arrival, and further provided such
       early or late arrival is not the fault of BUYER, no
       demurrage charges directly resulting from such early or
       late arrival will be applied against BUYER.  In the event
       that such late arrival or departure results in demurrage
       being charged against BUYER by any Vessel making
       deliveries for another supplier to BUYER within that
       supplier's specified date range or time period agreed to
       by BUYER, SELLER will reimburse BUYER for such demurrages
       as may have been paid by BUYER which directly relate
       thereto.

 8.3   Upon arrival of Vessel at the Delivery Point and upon
       obtaining by the SELLER of any and all governmental and/or
       port authority approval(s) required prior to discharge,
       the Master of the Vessel or his representative shall give
       notice to BUYER at Delivery Point that the Vessel is ready
       to dock, such notice of readiness to dock will only be
       accepted by BUYER during the hours of 8 AM through 12
       Midnight Eastern Time Zone.  Laytime shall commence upon
       the expiration of six (6) hours after tender of such
       notice and acceptance of the same by BUYER.  The Vessel
       shall be deemed ready to discharge Product within the
       meaning of this clause only when all fast at BUYER's dock.

 8.4   BUYER shall be allowed laytime of thirty-six (36) hours
       for each ship delivery of Product to the Delivery Point
       and twenty (20) hours laytime for each barge delivery.  If
       Vessel's condition, personnel or facilities do not permit
       discharging in the time allowed, then the additional time
       necessary shall be added to BUYER's allowed laytime, and
       BUYER will be reimbursed for its direct costs incurred
       because of such delay.  If the Vessel is delayed at the
       Delivery Point for Vessel's own purposes, laytime shall
       cease during such delay and if such delays do not permit
       discharging in the time allowed, then the additional time
       necessary shall be added to BUYER's allowed laytime, and
       BUYER will be reimbursed for its direct costs incurred
       because of such delay.  In all other cases, laytime shall
       continue until the hoses or mechanical arms have been
       disconnected.  If governmental regulations or regulations
       of the Vessel's owner prohibit berthing of Vessel or
       discharging of the Product during hours of darkness or
       inclement weather, the time lost shall not count as used
       laytime.

                             - 12 -
<PAGE>
August 31, 1995


       BUYER's regulations currently restrict docking at Roseton
       to the hours of 8 AM to 12 Midnight Eastern Time Zone
       unless special arrangements are made with BUYER.

 8.5   The Product shall be pumped out of Vessel at a maximum
       discharge pressure of 75 psig and minimum discharge
       pressure of 60 psig at the expense of SELLER and at the
       risk and peril of SELLER up to and including discharge of
       the Product through the Vessel's permanent discharge
       manifold flange connection, at which place delivery of the
       Product shall be taken by BUYER.

 8.6   SELLER's Vessel shall depart promptly from the Delivery
       Point after completion of discharging unless it has
       received prior approval of BUYER.  If any Vessel of SELLER
       fails to depart within six (6) hours of discharging
       Product, and BUYER is subjected to extra dockage or port
       charges of any type, then SELLER shall reimburse BUYER for
       such extra charges.  Where a Vessel requests permission
       from BUYER to stay for an additional period, and as a
       result, stays beyond the time period specified in
       Subsection 8.4 herein, BUYER shall not be responsible to
       pay any demurrage charges relating to said permitted stay.

 8.7   Demurrage claims must be accompanied by such supporting
       data as BUYER or SELLER may reasonably request.

 8.8   In the event Product is spilled during the discharge of a
       Vessel delivering Product to BUYER hereunder or when the
       Vessel is in close proximity to BUYER's Terminal, BUYER
       may immediately take all measures it deems necessary and
       appropriate to prevent or mitigate resulting pollution
       damage.  Any such measures taken by BUYER shall be at the
       expense of the Party or Parties responsible for such spill
       or discharge.  After taking any such measures, BUYER shall
       promptly notify SELLER.

       In the event SELLER is notified of such spill, has
       knowledge of such spill or would reasonably be expected to
       have knowledge of the same, SELLER shall promptly
       undertake such measures as are necessary to prevent or
       mitigate resulting pollution damage.  SELLER shall report
       immediately to the U.S. Coast Guard, other agencies as 





                             - 13 -
 <PAGE>
August 31, 1995

       required, and to BUYER at the Roseton Plant, any such
       spillage at or in the proximity to the Delivery Point. 
       SELLER will request that the Master of the Vessel
       undertake such measures as may be required on the Vessel,
       and that he assist BUYER in its actions to prevent or
       mitigate pollution damage.  In the event SELLER is
       responsible for such spill or discharge and BUYER, as a
       result, becomes liable to any party to pay any amount
       related thereto, SELLER will reimburse BUYER as to the
       amount of such liability, including any legal,
       professional or other costs borne by BUYER.






































                             - 14 -
<PAGE>
August 31, 1995
 
 9.0   PRICE AND PAYMENT
       Price per barrel for Product delivered shall be calculated
       to four (4) decimal points and determined as follows:

 9.1   The Product Contract price per barrel for 1.5% maximum
       sulfur Product shall be the xxxxx of the prices calculated
       using the following two formulas.

       A.  1.  xx.xxxxx xx xxxxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           2.  xx.xxxxx xx xxxxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           3.  xx.xxxxx xx xxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           4.  xx.xxxxx xx xxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           5.  A fixed differential of $x.xxxx per Barrel.

           All the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

       B.  1.  xx.xxxxx xx xxxxxxxxxx New York Harbor Spot Cargo
               posting for No. 6 x.xx Sulfur xxxx

           2.  xx.xxxxx xx xxxxxxxxxx New York Harbor Spot Cargo
               posting for No. 6 x.xx Sulfur xxxx

           3.  A fixed differential of $x.xxx per Barrel.

           Both of the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

 9.2   The Product Contract price per Barrel for 1.3% maximum
       sulfur Product shall be the xxxxx of the prices calculated
       using the following two formulas:

       A.  1.  xx.xx xx xxxxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 15 -
<PAGE>
August 31, 1995

           2.  xx.xx xx xxxxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           3.  xx.xx xx xxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           4.  xx.xx xx xxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx

           5.  A fixed differential of $x.xxxx per Barrel.

           All the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

       B.  1.  xx.xx xx xxxxxxxxxx New York Harbor Spot Cargo
               posting for No. 6 x.xx Sulfur xxxx

           2.  xx.xx xx xxxxxxxxxx New York Harbor Spot Cargo
               posting for No. 6 x.xx Sulfur xxxx

           3.  A fixed differential of $x.xxx per Barrel.

           Both of the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

 9.3   The Product Contract price per Barrel for 1% maximum
       sulfur Product shall be the xxxxx of the prices calculated
       using the following two formulas:

       A.  1.  xxx xx xxxxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xxx Sulfur xxxx

           2.  xxx xx xxxxx New York Harbor Cargo Low Spot
               posting for No. 6 x.xx Sulfur xxxx









CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 16 -
<PAGE>
Auugst 31, 1995

           3.  A fixed differential of $x.xxx per Barrel.

           Both of the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

       B.  1.  xxxx xx xxxxxxxxxx New York Harbor Spot Cargo
               posting for No. 6 x.xx Sulfur xxxx

           2.  A fixed differential of $x.xxx per Barrel.

           The above posting is based on a xxxxx-xxx xxxxxxx at
           the time of delivery including xxx xx xxxxxxxxxxxx xx
           xxxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

 9.4   The Product Contract price per Barrel for 0.3% maximum
       sulfur Product shall be the xxxxx of the prices calculated
       using the following formulas:

       A.  1.  xxx xx xxxxxxx New York Harbor Cargo Mean HP (High
               Pour) Spot posting for No. 6 x.xx Sulfur xxxx

           2.  xxx xx xxxxxxxxxx New York Harbor HP (High Pour)
               Spot Cargo posting for No. 6 x.xx Sulfur xxxx

           3.  A fixed differential of $x.xxx per Barrel.

           Both of the above postings are based on a xxxxx-xxx
           xxxxxxx at the time of delivery including xxx xx
           xxxxxxxxxxxx xx xxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

           NOTE:  Each Mean Spot posting shall xxx xxxxxx the
           associated low spot posting by xxxx than $x.xxx per
           Barrel.

       B.  1.  xxxx xx xxxxx New York Harbor Cargo Mean Spot
               posting for No. 6 x.xx Sulfur HP (High Pour) xxxx 








CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 17 -
<PAGE>
August 31, 1995

           2.  A fixed differential of $x.xxx per Barrel.
               
           The above posting is based on a xxxxx-xxx xxxxxxx at
           the time of delivery including xxx xx xxxxxxxxxxxx xx
           xxxxxxxxx, xxx xxxxx xx xxx xxx xxxxx.

           NOTE:  Each Mean Spot posting shall not xxxxxx the
           associated low spot posting by xxxx than $x.xxx per
           Barrel.

 9.5   SELLER shall invoice BUYER for Product delivered under
       this Contract as determined in Subsections 9.1., 9.2.,
       9.3. and 9.4. based on date of xxxxxxxxxxxx of discharge
       at BUYER's designated facilities.  Attachment II, attached
       hereto specifies the posted prices to be used in
       accordance with Subsections 9.1.A., 9.1.B., 9.2.A.,
       9.2.B., 9.3.A., 9.3.B., 9.4.A. and 9.4.B. on days when
       prices are not posted solely due to such day being non-
       business days when such prices are not normally posted.

 9.6   In the event that delivery is made after the date range
       agreed upon by BUYER and SELLER, the Contract price shall
       be the xxxxx of the price based on actual date of
       commencement of delivery or the price should delivery have
       commenced on the last day of the 5-day date range.
       
       In the event that delivery is made before the date range
       agreed upon by BUYER and SELLER, the Contract price shall
       be the xxxxx of the price based on actual date of
       commencement of delivery or the price should delivery have
       commenced on the first day of the 5-day date range.

 9.7   BUYER shall make payment in full by wire transfer of
       federal funds within xxxxxx xxx xxxx calendar days from
       date of commencement of discharge or within xxxxxxx xxxx
       calendar days of receipt of a correct invoice whichever is
       later.  SELLER shall furnish BUYER a telecopy invoice and
       the petroleum Inspector's certificate indicating discharge
       volume for 






CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 18 -
<PAGE>
August 31, 1995


       deliveries by SELLER at the Roseton Terminal within three
       (3) days of completion of discharge.  Invoices received
       after 4 PM Eastern Time Zone will be considered to be
       received on the following BUYER's business day.

       If the date payment is due falls on a Saturday or holiday,
       payment shall be made on the last New York State banking
       day prior to such date and if payment is due on a Sunday,
       or if due on a Monday which is a holiday, payment shall be
       made on the next following New York State banking day
       after such date.

 9.8   BUYER shall notify SELLER of any disputed amount of any
       invoice, so that an attempt may be made to resolve the
       difference before the date payment is due.  If BUYER and
       SELLER do not resolve such dispute before the payment due
       date, the amount of the invoice not in dispute shall be
       paid by BUYER on the due date.  Payment of the disputed
       amount need not be made on the due date but shall be
       subject to adjustment upon final resolution of the
       disputed amount through good faith negotiation between
       BUYER and SELLER and any balance due paid after such
       adjustment.

 9.9   If, as a result of the quality testing provided for in
       Section 7.0 it is determined that the combined volume of
       water and sediment is in excess of x.xx, then the Product
       quantity for invoicing shall be reduced by the percentage
       by which such combined water and sediment actual volume
       exceeds x.xx.

 9.10  If at any time during the term of this Contract a Product
       reference price is not available for a particular sulfur
       grade of Product, then the reference price of such Product
       shall be determined by interpolating between published
       reference prices for the next immediately higher and lower
       sulfur grades of Product in the ratio, proportional to the
       higher and lower sulfur grades required to achieve the
       blend of the Product reference grade.




CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.


                             - 19 -
<PAGE>
August 31, 1995

 9.11  If during the Term of this Contract xxxxxxx and/or xxxxx
       and/or xxxxxxxxxx ceases to publish New York Harbor Spot
       prices, the Parties hereto agree to negotiate to find an
       acceptable substitute price mechanism within forty-five
       (45) days after the last accurate price publication. 
       During the negotiating period, the price for the Product
       will be based upon xxxxxxxxx xxxxxxxxx xxxx xxxxxx xxxxxx. 
       Said price shall be subject to adjustment to the pricing
       derived using the  new formula(s) agreed upon through
       negotiation.  If agreement cannot be reached or a
       substitute price mechanism, then either Party, upon thirty
       (30) days' written notice to the other may terminate this
       Contract.

 9.12  This Fuel Oil Supply Contract shall supersede and replace
       in its entirety the prior Fuel Oil Supply Contract between
       the Parties dated September 1, 1992, as amended, and
       assigned to Seller by Assignment and Assumption Agreement
       dated June 28, 1994.  Notwithstanding the foregoing, the
       obligations of each Party which, by their nature, are to
       be performed following the end of the Term of the prior
       Contract and all the rights of each Party which, by their
       nature, may be exercised following the Term of the prior
       Contract shall be deemed to survive the termination of the
       prior Contract.

 9.13  If, as a result of the quality testing provided for in
       Section 7.0, it is determined that the xxxxxxxx xxxxxxx
       xxxxxxxx xxxx xxxxxxx xxxxx of the Product sold to BUYER
       by SELLER is more than or less than the minimum guaranteed
       heating value specified in the quality specifications
       contained in Attachment I, then BUYER shall apply the
       following formula for calculation of credit due BUYER from
       SELLER or of premium due SELLER from BUYER:
       xxxxxxxx xxxxxxxx xxxxxxxxxxxx =

        xxxxxxxx xxxxxxx 
        xxxxxxxx xxxx          xxxxxxxx xxxxxxx
        xxxxxxx xxxxx          xxxxxxxx xxxx
        xxxxxxx xxxxxxxxxx  X  xxxxxxxx xxxxxxxxxxxx
         xxxxxxx xxxxx


CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.



                             - 20 -
<PAGE>
August 31, 1995


       xxx xxxxxxxx xxxxxxxx xxxxx xxx xxxxxxx xxxxxxx xxx xx
       xxxx xxx xxxxxxx xxxxxx xxxxxxxxxxx xxxx xxx xxxxxxxxxx
       xxxxx xxx xxxxxxx xxxxxxxxxx, will be applied against the
       total Contract quantity of Product sold to BUYER by SELLER
       during the Contract Term in question.  The difference
       between this result and the actual total amount paid by
       BUYER for deliveries of Product made during the  xxxxxxxx
       xxxx shall be credit due BUYER by SELLER if the weighted
       average contract term heating value of the Product sold to
       BUYER by SELLER is less than minimum guaranteed heating
       value or premium due SELLER from BUYER if the weighted
       average contract term heating value of the Product sold to
       BUYER by SELLER is more than the minimum guaranteed
       heating value.  In no case shall premium, if any, due
       SELLER from BUYER under this Contract exceed the amount of
       the final settlement of the heating value deficiency
       accumulated during the prior Contract.

       If, as a result of the quality testing provided for in
       Section 7.0, it is determined that the weighted average
       contract term heating value of the Product sold to BUYER
       by SELLER is xxxx xxxx xx xxxx xxxx the minimum guaranteed
       heating value specified in the quality specifications
       contained in Attachment I, then the net xxxxxx xx xxxxxxx
       shall be carried forward to the next succeeding Contract
       Year.  Final settlement of any net credit or premium due
       BUYER from SELLER or vice versa shall be determined and
       paid, as provided for herein, upon final termination of
       the Contract.

 9.14  If it is determined that the sulfur content of any Product
       sold to BUYER by SELLER is greater than the sulfur content
       agreed to by BUYER, the BUYER shall have the right to
       require that the nonconforming Product be removed at
       SELLER's expense as described in Subsection 7.3.









CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 21 -
<PAGE>
August 31, 1995


 9.15  Computations made with respect to the adjustment specified
       in Subsection 9.13 shall be paid by BUYER (if a premium)
       or SELLER (if a credit) within thirty (30) days of receipt
       of BUYER's or SELLER's invoice based upon which Party is
       owed an adjustment.  Should SELLER fail to make payment
       within said thirty (30) days, BUYER may, as a non-
       exclusive remedy, deduct amount due BUYER from any payment
       due to SELLER.








































                             - 22 -
<PAGE>
August 31, 1995


10.0   INDEMNIFICATION

10.1   SELLER agrees to furnish the Product as an independent
       contractor and not as a subcontractor, agent or employee
       of BUYER.  BUYER does not retain any control or direction
       over SELLER, its employees or subcontractors, or over the
       detail, manner or methods of the performance of SELLER's
       obligations under the Contract.

10.2   Each Party hereto shall indemnify and hold harmless the
       other Party, its employees and agents against any and all
       claims, liability, cost or expense including, without
       limitation, damages for personal injury or property damage
       incurred with respect to the deliveries of Product by
       SELLER pursuant to this Contract, which that Party, its
       employees and agents, individually or collectively, may
       suffer by reason of any act or omission of the
       indemnifying Party, its employees or agents, including,
       without limitation, the negligence of the indemnifying
       party or any of its employees or agents to observe or
       comply with any of that party's duties or obligations
       under this Contract or any failure to comply with or
       observe any laws, ordinances, codes, orders, rules or
       regulations applicable to it, or the failure of that Party
       to comply with any appropriate safety and handling
       precautions.






















                             - 23 -
<PAGE>
August 31, 1995


11.0   FORCE MAJEURE AND NONPERFORMANCE

11.1   Performance of this Contract by each Party shall be
       pursued with due diligence in all requirements hereof;
       however, neither Party shall be liable to the other for
       any loss or damage for delay or for nonperformance
       (including the payment of monies) due to causes not
       reasonably within its control including, but not limited
       to, acts of civil or military authority (including, but
       not limited to, courts or administrative agencies), acts
       of God, war, riot or insurrection, inability to obtain any
       required permits or license, blockades, embargoes,
       sabotage, epidemics, fires, floods, strikes, lockouts or
       other labor disputes or difficulties.

11.2   In the event of any delay or nonperformance caused by any
       of the forces described in Subsection 11.1, the Party
       affected shall,on the next business day, promptly notify
       the other Party verbally and within two business days
       provide the other Party with teletype, TWX, telegram or
       other written confirmation of the nature, cause, date of
       commencement and the anticipated extent of such delay or
       nonperformance.  If SELLER's performance is not resumed
       within (30) days of such notice and BUYER believes its
       Product requirements are not going to be met, BUYER may
       take such steps as it deems necessary to obtain Product,
       including contracting with other suppliers of Product
       during the period of SELLER's nonperformance, and BUYER
       shall have no obligation to make up such deficiencies from
       SELLER at a later time.

11.3   If federal, state or local laws or ordinances, or rules,
       or Roseton Plant fuel requirements or the fuel
       requirements of any nearby power plant restrict or
       prohibit or otherwise render unsuitable or undesirable
       BUYER's use of the Product as fuel for its Roseton Plant,
       BUYER shall have the right to reduce the quantity of
       Product deliverable under this Contract 










                             - 24 -
<PAGE>
August 31, 1995


without penalty.  The amount of such quantity reduction which
BUYER may elect during any Contract Year shall be up to the
amount of Product to which any such restriction, prohibition, or
reduction in use applies, and shall be equally proportioned among
all of BUYER's contract Product suppliers for its Roseton Plant.











































                             - 25 -
<PAGE>
August 31, 1995


12.0   COMPLIANCE WITH LAWS, REGULATIONS, CODES AND STANDARDS

12.1   BUYER shall have the responsibility of complying with all
       applicable laws, rules, regulations, codes and standards
       of all federal, state, local and municipal governmental
       agencies having jurisdiction over the operation or
       maintenance of the facilities and equipment used in
       carrying out its obligations hereunder; including but not
       limited to, applicable environmental regulations governing
       the maximum sulfur content of the Product, the Federal
       Water Pollution Control Act Amendments of 1972, all
       applicable rules and regulations issued by the U.S. Coast
       Guard and all applicable New York State statutes and
       regulations.

       SELLER shall have the responsibility of complying with all
       applicable laws, rules, regulations, codes and standards
       of all federal, state, local and municipal governmental
       agencies having jurisdiction over the operation or
       maintenance of the Vessels, facilities and equipment used
       in carrying out its obligations hereunder including, but
       not limited to, applicable environmental regulations
       governing the maximum sulfur content of the Product, the
       Federal Water Pollution Control Act Amendments of 1972 all
       applicable rules and regulations issued by the U.S. Coast
       Guard and all applicable New York State statutes, rules
       and regulations.





















                             - 26 -
<PAGE>
August 31, 1995


13.0   TAXES

13.1   SELLER shall be responsible, with the exception of the so-
       called "Petroleum Business Tax" (New York Tax Law Article
       13-A), relating to the performance of this Contract,
       currently (June 1, 1995) imposed at a rate of 7.02 cent
       per gallon of Product delivered for which BUYER will
       provide to SELLER a direct payment permit, New York State
       Sales Tax for which BUYER is to provide SELLER with a
       sales tax exemption certificate, and the so-called "Spill
       Tax" (New York Navigation Law Article 12) which currently
       imposes a license fee of $.04 per barrel and a surlicense
       fee of $.0425 per barrel which total $.0825 per barrel,
       for any and all taxes, assessments, excises, and other
       governmental charges now in existence (hereinafter
       collectively referred to as "taxes") arising from the
       performance of SELLER's obligation under this Contract
       including, but not limited to, income taxes, unemployment
       insurance, old age benefits, retirement benefits, life
       pensions, annuities, and business licenses.  SELLER shall
       comply with all laws relating to such taxes and shall
       maintain suitable forms, books, and records connected
       therewith.  Should any tax or fee for which either Party
       is responsible be increased, decreased or replaced by
       similar taxes, the Parties agree to promptly renegotiate
       the price schedule as listed in Section 9.0, only as it
       may relate to such increase or decrease in such tax or
       fee.  

       In this regard BUYER and SELLER shall, in good faith,
       endeavor to agree to a revised price schedule except as
       the same may be restricted by law.  However,
       notwithstanding the foregoing, the Parties agree that
       their intention is that SELLER is not to either:

       a.   Absorb a tax, fee or charge of any kind as the result
            of action by any federal, 











                             - 27 -
<PAGE>
August 31, 1995


            state or local governing body or agency including
            action which prohibits the pass-thru of a
            retroactively passed tax, fee or charge, or
                                
       b.   Benefit as the result of action by a federal, state
            or local governing body or agency.

       In the event either (a) or (b) occurs as described above,
       the Parties agree to promptly meet and negotiate in good
       faith appropriate changes to contract terms and conditions
       to compensate the injured party.  In the event the Parties
       fail to agree, either Party may terminate this Contract
       upon ninety (90) days' written notice to the other.



































                             - 28 -
<PAGE>
August 31, 1995


14.0   PROPRIETARY INFORMATION

14.1   SELLER and BUYER have a proprietary interest in the
       Contract.  Accordingly, the Contract shall not be
       disclosed in whole or in part by either Party, its agents
       or employees to third parties without the prior written
       consent of the other Party; provided, however, that
       nothing contained in this Section 14.0 will be construed
       to prevent either Party from enforcing any rights created
       by this Contract.

14.2   Notwithstanding Subsection 14.1, the Parties shall have
       the right to disclose such proprietary information to any
       governmental or regulatory authority having or purporting
       to have jurisdiction to require such disclosure, but shall
       exert reasonable effort to secure confidential treatment
       of any proprietary information so provided.































                             - 29 -
<PAGE>
August 31, 1995


15.0   NONWAIVER

15.1   Failure of the Parties to insist upon strict performance
       of any provisions hereof, or failure or delay in
       exercising any rights or remedies provided herein or by
       law, or the acceptance of payment for the Product or any
       combination thereof, shall not release the Parties from
       any obligations under this Contract and shall not be
       deemed a waiver of the Parties' right to insist upon
       strict enforcement hereof, or of any right or remedies
       made available under this Contract or by law, nor shall
       any purported oral modification or recision of this
       Contract by any employee or agent of the Parties operate
       as a waiver of any of the provisions hereof.


































                             - 30 -
<PAGE>
August 31, 1995


16.0   EFFECT OF SECTION HEADINGS

16.1   Section headings appearing in this Contract are inserted
       for convenience only, and shall not be deemed to
       establish, modify or affect the rights and obligations of
       the Parties to this Contract.










































                             - 31 -
<PAGE>
August 31, 1995


17.0   APPLICABLE STATE LAW

17.1   The rights, obligations and remedies of the Parties as
       specified under this Contract shall be interpreted in
       accordance with and governed by, in all respects, the laws
       of the State of New York.










































                             - 32 -
<PAGE>
August 31, 1995

18.0   ASSIGNMENT

18.1   Except as otherwise provided in this Section 18.0, this
       Contract shall not be assigned, delegated or otherwise
       disposed of by either of the Parties without the prior
       written consent of the other.

18.2   Subject to the provisions of the Federal Bankruptcy Code,
       this Contract shall not be deemed an asset of either Party
       and, upon five (5) days prior written notice, either Party
       may terminate the Contract without penalty at any time
       during which the other Party is in any voluntary or
       involuntary receivership, bankruptcy, or insolvency
       proceedings.



































                             - 33 -
<PAGE>
August 31, 1995


19.0   NOTICES AND CORRESPONDENCE

19.1   All notices required hereunder or correspondence
       pertaining to or affecting the provisions of this Contract
       shall be by teletype, TWX, telegram or in writing and, if
       in writing, either delivered by hand or sent by certified
       or registered mail, return receipt requested, to the
       Parties at the following addresses:

       19.1.1  Mailed to BUYER:

               Central Hudson Gas & Electric Corporation
               284 South Avenue
               Poughkeepsie, NY   12601-4879
               Attention:  Fuels Buyer

       19.1.2  Delivered to BUYER:

               Central Hudson Gas & Electric Corporation
               284 South Avenue
               Poughkeepsie, NY   12601-4879
               Attention:  Fuels Buyer

       19.1.3  Mailed to SELLER:

               Montello Oil Corporation
               800 South Street
               Box 9161
               Waltham, MA  02254-9161
               Attention:  Vice President - Marketing and Manager
- - Residual Fuels

       19.1.4  Delivered to SELLER:

               Montello Oil Corporation
               800 South Street
               Box 9161
               Waltham, MA  02254-9161
               Attention:  Vice President - Marketing and Manager
- - Residual Fuels

19.2   If either Party changes its address, that Party shall give
       prompt written notice of the change to the other Party.





                             - 34 -
<PAGE>
August 31, 1995


19.3   All notices shall be deemed given on the date the Party,
       to whom such notices are addressed, received or refused
       the same.













































                             - 35 -
<PAGE>
August 31, 1995


20.0   ARBITRATION

20.1   Whenever a dispute arises between the Parties concerning
       this Contract or any of the obligations hereunder, the
       Parties shall use their best efforts to resolve the
       dispute by mutual agreement.  In the event the Parties
       cannot reach such mutual agreement and both Parties agree
       in writing to arbitrate the dispute, then the arbitration
       shall be conducted in accordance with the Commercial Rules
       of Arbitration or the American Arbitration Association
       then in effect.  The decision of the arbitrators with
       respect to such issues shall be reduced to writing with a
       full explanation of its factual and legal basis and shall
       be rendered within thirty (30) days after all evidence and
       arguments have been submitted.  There shall be three
       arbitrators.  The Party demanding arbitration shall inform
       the other Party of the name of its arbitrator and the
       Party receiving demand shall, within twenty (20) calendar
       days thereafter, name its arbitrator.  The two arbitrators
       so designated shall choose a third.  In the event that the
       Party receiving demand for arbitration fails to name an
       arbitrator within the time specified, then an arbitrator
       shall be named by the Chief Judge, United States District
       Court, Southern District of New York.  The Parties shall
       share equally the expenses of the impartial arbitrator's
       fee and shall each pay for their own costs and expenses
       incurred and resulting from arbitration.





















                             - 36 -
<PAGE>
August 31, 1995


21.0   COMPLETE AGREEMENT

21.1   This written Contract is intended as the final, complete
       and exclusive statement of the terms of the agreement
       between the Parties.  The Parties agree that parol or
       extrinsic evidence may not be used to vary or contradict
       the express terms of this Contract and that recourse may
       not be had to alleged prior dealings, usage of trade,
       course of dealing, or course of performance to explain or
       supplement the express terms of this Contract.  This
       Contract shall not be amended or modified, and no waiver
       of any provision hereof shall be effective, unless set
       forth in a written instrument authorized and executed with
       the same formality as this Contract.


































                             - 37 -
<PAGE>
August 31, 1995


22.0   EMPLOYEE INTEREST

22.1   Seller represents to Buyer that Seller has not given and
       will not give, directly or indirectly, anything of value
       to any employee or other representative of Buyer with the
       view of securing this Agreement or obtaining favorable
       treatment with respect to the performance of this
       Agreement.  If such representation is untrue, or becomes
       untrue, Buyer shall have the right to declare this
       Agreement null and void or to terminate it, to sue for
       damages and to take such other action as may be provided
       by law.  If Seller obtains knowledge at any time that any
       such employee has a direct or indirect interest in Seller
       or its affiliates, (excluding routine purchases in the
       open market by such employee of securities issued by
       Seller or its parent corporations) it will immediately
       inform Buyer of such fact.































                             - 38 -
<PAGE>
August 31, 1995


23.0   REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES

23.1   Each Party warrants and represent to the other that:

         (i)  it has all requisite power, authority, licenses,
              permits, permissions, approvals and franchises,
              corporate or otherwise, to execute and deliver this
              Contract and perform its obligations hereunder;

        (ii)  its execution, delivery, and performance of this
              Contract has been duly authorized by, or is in
              accordance with its organic instruments, this
              Contract  has been duly executed and delivered for
              it by the signatories so authorized, and this
              Contract constitutes its legal, valid and binding
              obligation enforceable in accordance with its terms
              except as such enforceability may be limited by
              bankruptcy, insolvency, reorganization, moratorium
              or similar laws affecting the enforcement of
              creditors' rights in general and by general
              principles of equity;

       (iii)  its execution, delivery, and performance of this
              Contract will not result in a breach or violation
              of, or constitute a default under, any contract,
              lease or instrument to which it is a party or by
              which it or its properties may be bound or
              affected; and

        (iv)  it has not received any notice, nor to the best of
              its knowledge is there pending or threatened any
              notice, of any violation of any applicable laws,
              ordinances, regulations, rules, decrees, awards,
              permits or orders which would materially adversely
              affect its ability to perform hereunder.













                             - 39 -
<PAGE>
August 31, 1995


       IN WITNESS WHEREOF, the Parties hereto have caused this
Contract to be signed by their duly authorized officers,
effective as of the date specified in Section 1.0.


                                         MONTELLO OIL CORPORATION


WITNESS AS TO (SELLER):               BY (SGD.) ALFRED SLISKA 
                                            ALFRED SLISKA
                                         _____________________


DATE September 20, 1995 

                               CENTRAL HUDSON GAS & ELECTRIC
                               CORPORATION FOR ITSELF AND AS
                               AGENT FOR CONSOLIDATED EDISON
                               COMPANY OF NEW YORK, INC., AND 
                               NIAGARA MOHAWK POWER CORPORATION



ATTEST AS TO (BUYER):         BY     (SGD.) PAUL J. GANCI
                                         PAUL J. GANCI
                                         PRESIDENT AND
         SECRETARY                  CHIEF OPERATING OFFICER


DATE                        


















                             - 40 -
<PAGE>
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                         ATTACHMENT I-A
                     NO. 6 RESIDUAL FUEL OIL

                   1.5% SULFUR SPECIFICATIONS

                              ASTM
                              TEST       MINIMUM          MAXIMUM

Sulfur (X-Ray)-Wt %       D-2622/D-4294     --              1.5

Gravity, degree API          D-287        10.5               25

Flash Point, degree F        D-93          150               --

Visc. SSF @ 122 degree F     D-445          35              xxx

Pour Point, degree F         D-97           --               xx

Water Content, Vol. %        D-95           --              x.x x

Sediment, Vol. %             D-473          --              0.4 *

Con Carbon, Wt %          D-189/D-4530      --               16**

Vanadium, PPM                D-2788         --              300

Ash, Wt %                    D-482          --              0.1

Heating Value,
 Btu./Gallon                 D-240       151,750 ***         --

Sodium                       D-2788         --               75

     Product must not contain petrochemical wastes or residues,
chemicals, including but not limited to caustics and acids, tar
bottoms, styrenes, olefins, or any matter foreign to No. 6
residual fuel oil.  Product must have a marketable odor of
residual fuel oil.

  *  xxxxxxxx xx xx xxxxxxxx xxx xxxxxxxx xxxxxx xx xxxxx xxx
     xxxxxxxx xx xxxxxx xx x.xx xxxxxxxxxxx x.xx.

 **  Weighted annual average and weighted average of two
     consecutive deliveries not to exceed 13%.

***  Weighted average for Contract Term.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.

                             - 41 -
<PAGE>
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                         ATTACHMENT I-B
                     NO. 6 RESIDUAL FUEL OIL

                   1.3% SULFUR SPECIFICATIONS

                          ASTM
                          TEST           MINIMUM          MAXIMUM

Sulfur (X-Ray)-Wt %       D-2622/D-4294     --              1.3

Gravity, degree API          D-287         10.5              25

Flash Point, degree F        D-93           150              --

Visc. SSF @ 122 degree F     D-445           35             xxx

Pour Point, degree F         D-97           --               xx

Water Content, Vol. %        D-95           --              x.x x

Sediment, Vol. %             D-473          --              0.4 *

Con Carbon, Wt %          D-189/D-4530      --               16**

Vanadium, PPM                D-2788         --              300

Ash, Wt %                    D-482          --              0.1

Heating Value,
 Btu./Gallon                 D-240       151,750 ***         --

Sodium                       D-2788         --               75

     Product must not contain petrochemical wastes or residues,
chemicals, including but not limited to caustics and acids, tar
bottoms, styrenes, olefins, or any matter foreign to No. 6
residual fuel oil.  Product must have a marketable odor of
residual fuel oil.

  *  xxxxxxxx xx xx xxxxxxxx xxx xxxxxxxx xxxxxx xx xxxxx xxx
     xxxxxxxx xx xxxxxx xx x.xx xxxxxxxxxxx x.xx.

 **  Weighted annual average and weighted average of two
     consecutive deliveries not to exceed 13%.

***  Weighted average for Contract Term.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
                             - 42 -
<PAGE>
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                         ATTACHMENT I-C
                     NO. 6 RESIDUAL FUEL OIL

                    1% SULFUR SPECIFICATIONS

                          ASTM
                          TEST           MINIMUM          MAXIMUM

Sulfur (X-Ray)-Wt %       D-2622/D-4294     --              1.0

Gravity, degree API          D-287        10.5               25

Flash Point, degree F        D-93          150               --

Visc. SSF @ 122 degree F     D-445          35              xxx

Pour Point, degree F         D-97           --               xx

Water Content, Vol. %        D-95           --              x.x x

Sediment, Vol. %             D-473          --              0.4 *

Con Carbon, Wt %          D-189/D-4530      --               16**

Vanadium, PPM                D-2788         --              300

Ash, Wt %                    D-482          --              0.1

Heating Value,
 Btu./Gallon                 D-240       151,750 ***         --

Sodium                       D-2788         --               75
 
     Product must not contain petrochemical wastes or residues,
chemicals, including but not limited to caustics and acids, tar
bottoms, styrenes, olefins, or any matter foreign to No. 6
residual fuel oil.  Product must have a marketable odor of
residual fuel oil.

  *  xxxxxxxx xx xx xxxxxxxx xxx xxxxxxxx xxxxxx xx xxxxx xxx
     xxxxxxxx xx xxxxxx xx x.xx xxxxxxxxxxx x.xx.

 **  Weighted annual average and weighted average of two
     consecutive deliveries not to exceed 13%.

***  Weighted average for Contract Term.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
                             - 43 -
<PAGE>
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                         ATTACHMENT I-D
                     NO. 6 RESIDUAL FUEL OIL

                    0.3% SULFUR SPECIFICATIONS

                              ASTM
                              TEST       MINIMUM          MAXIMUM

Sulfur (X-Ray)-Wt %       D-2622/D-4294    --               0.3

Gravity, degree API           D-287       10.5               25

Flash Point, degree F         D-93         150               --

Visc. SSF @ 122 degree F      D-445         35              xxx

Pour Point, degree F          D-97         --               xxx

Water Content, Vol. %         D-95         --               x.x x

Sediment, Vol. %              D-473        --               0.4 *

Con Carbon, Wt %          D-189/D-4530     --                13**

Vanadium, PPM                D-2788        --               300

Ash, Wt %                    D-482         --               0.1

Heating Value,
 Btu./Gallon                 D-240       147,000 ***        --

Sodium                       D-2788        --                75

     Product must not contain petrochemical wastes or residues,
chemicals, including but not limited to caustics and acids, tar
bottoms, styrenes, olefins, or any matter foreign to No. 6
residual fuel oil.  Product must have a marketable odor of
residual fuel oil.

  *  xxxxxxxx xx xx xxxxxxxx xxx xxxxxxxx xxxxxx xx xxxxx xxx
     xxxxxxxx xx xxxxxx xx x.xx xxxxxxxxxxx x.xx.

 **  Weighted annual average and weighted average of two
     consecutive deliveries not to exceed 10%.

***  Weighted average for Contract Term.

CONFIDENTIAL INFORMATION REPRESENTED IN THIS FILING BY AN "X" HAS
BEEN REDACTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION.
                             - 44 -
<PAGE>
            CENTRAL HUDSON GAS & ELECTRIC CORPORATION

                          ATTACHMENT II

     Posted prices to be used in accordance with Subsections
9.1a., 9.1b., 9.2a., 9.2b., 9.3a., 9.3b., 9.3c. and 9.4a. on days
when prices are not posted solely due to such days being non-
business days.

          1.  Prices for Saturday and Sunday when
              Friday or Monday is not a holiday. 

              Saturday - use preceding Friday price.
              Sunday - use following Monday posted
              prices.

          2.  Prices for Friday, Saturday and Sunday
              when Friday is a holiday.

              Friday - use preceding Thursday price.
              Saturday - use preceding Thursday
              price.
              Sunday - Use following Monday posted
              prices.

          3.  Prices for Saturday, Sunday and Monday
              when Monday is a holiday.

              Saturday - use preceding Friday price.
              Sunday - use following Tuesday price.
              Monday - use following Tuesday posted
              prices.

          4.  Prices for Tuesday when Tuesday is a
              holiday.

              Tuesday - use preceding Monday posted
              prices.

          5.  Prices for Wednesday when Wednesday is
              a holiday.

              Wednesday - use following Thursday
              posted prices.

          6.  Prices for Thursday when Thursday is a
              holiday.

              Thursday - use preceding Wednesday
              posted prices.

                       - 45 -
/PAGE
<PAGE>
<TABLE>
                         CENTRAL HUDSON GAS & ELECTRIC CORPORATION
                                       ATTACHMENT II
                                          PAGE 2
                                    EXAMPLE OF PRICES 
                                           FOR 
                                   HOLIDAYS AND WEEKENDS
                                                     HOLIDAY                       
<S>       <C>      <C>       <C>       <C>       <C>        <C>         <C>
                    NO        FRIDAY    MONDAY    TUESDAY     WEDNESDAY  THURSDAY
DAY       DATE     HOLIDAY      4         7         8             9         10    
THURSDAY  3         Actual    Actual    Actual   Actual      Actual       Actual
                    Postings  Postings  Postings Postings    Postings     Postings

FRIDAY    4         Actual    Thurs. 3  Actual   Actual      Actual       Actual
                    Postings  Postings  Postings Postings    Postings     Postings

SATURDAY  5         Fri. 4    Thurs. 3  Fri. 4   Fri. 4      Fri. 4       Fri. 4
                    Postings  Postings  Postings Postings    Postings     Postings

SUNDAY    6         Mon. 7    Mon. 7    Tues. 8  Mon. 7      Mon. 7       Mon.7
                    Postings  Postings  Postings Postings    Postings     Postings

MONDAY    7         Actual    Actual    Tues. 8  Actual      Actual       Actual
                    Postings  Postings  Postings Postings    Postings     Postings

TUESDAY   8         Actual    Actual    Actual   Mon. 7      Actual       Actual
                    Postings  Postings  Postings Postings    Postings     Postings

WEDNESDAY 9         Actual    Actual    Actual   Actual      Thurs. 10    Actual
                    Postings  Postings  Postings Postings    Postings     Postings
THURSDAY  10        Actual    Actual    Actual   Actual      Actual       Wed. 9
                    Postings  Postings  Postings Postings    Postings     Postings

FRIDAY    11        Actual    Actual    Actual   Actual      Actual       Actual
                    Postings  Postings  Postings Postings    Postings     Postings 

</TABLE>
                                          - 46 -



<PAGE>
                                                      Exhibit (99)(i)5
                                NEW YORK STATE
                   DEPARTMENT OF ENVIRONMENTAL CONSERVATION
- -----------------------------------------------------------------
In the Matter of the Development                      ORDER ON CONSENT
and Implementation of a Former                        Index #D3-0001-95-06
Manufactured Gas Plant (MGP) Sites
Investigation and Remediation Program
by Central Hudson Gas & Electric Corporation
- -----------------------------------------------------------------
WHEREAS:

1.  The New York State Department of Environmental Conservation
(the "Department") is responsible for enforcement of the
Environmental Conservation Law, which INTER ALIA, requires the
Department to carry out the environmental policy of the State set
forth of the ECL 1-0101.  ECL 3-0301.1.

2.  Central Hudson Gas & Electric Corporation ("Respondent") is a
business corporation organized under the laws of the State of New
York.

3.  Respondent owns a former manufactured gas plant ("MGP")
located on South Water Street in the City of Newburgh, Orange
County, New York at which coal tar and associated hazardous
substances ("MGP wastes") may have been disposed at various times
in the past by Respondent or its predecessors or affiliates (the
"Site").

4.  On May 26, 1995, the City of Newburgh (the "City") filed a
complaint in the United States District Court in the Southern
District of New York, alleging that MGP wastes have been released
from Respondent's former MGP in violation of law and that the
alleged releases have occurred on and under a City right of way
and City property (the "City lawsuit").  The City has demanded in
its complaint that such releases cease, that a City right of way
and City property be remediated and that the City recover from
Respondent damages and penalties.

5.  The Department's authority to require abatement and
remediation of releases of, INTER ALIA, hazardous substances as
that term is defined in 42 USC 9601(14), including MGP wastes,
that are in violation of law or that exceed, or that cause an
exceedance of, State environmental quality standards (as those
set forth in 6 NYCRR Part 703) ("hazardous substances"), is
varied, including, but not limited to, ECL 1-0101, 3-0301, 71-
1929, 71-2703, and 71-2705.  In addition, the Department has the
power, INTER ALIA, to provide for the prevention and abatement of
all water, land, and air pollution caused by, INTER ALIA, the
release of hazardous substances into the environment.  ECL 3-
0301.1.i.  Furthermore, the Department has authority to require
abatement and remediation of significant threats to the public
health or the environment caused by threatened releases of
hazardous substances that are hazardous wastes as that term is
defined in ECL 27-1301.

6.  The Department and Respondent agree that the goals of this
Order are for Respondent to (i) develop and implement a Remedial
Investigation ("RI") and prepare a Feasibility Study ("FS"); (ii)
remediate the Site, and to remediate off-Site areas to the extent
Respondent is responsible, if the Department determines there is
a need for remediation, on a schedule and to an extent acceptable
to the Department, including authorizing Respondent to develop
and implement Interim Remedial Measures ("IRMs") that the
Department determines to be appropriate; and (iii) pay for the
State's reasonable administrative and oversight costs associated
with implementation of this Order.

7.  Respondent, without admitting or denying the Department's
authority to require investigation and remediation of hazardous
substances at, or associated with, the Site and having waived its
right to a hearing herein as provided by law, and having
consented to the issuance and entry of this Order, agrees to be
bound by its terms.  Respondent consents to and agrees not to
contest the authority or jurisdiction of the Department to issue
or enforce this Order; and agrees not to contest the validity of
this Order or its terms.  However, should the Department request
that this Order be revised, Respondent reserves all of its rights
provided by law and the New York Environmental Conservation Law.

      NOW, having considered this matter and being duly advised,
IT IS ORDERED THAT:

I.  INITIAL SUBMITTALS

      The Department acknowledges having received before the
issuance of this Order two studies, "Phase I Investigation"
prepared by EA Science and Technology, dated January 1987 and
"Phase II Investigation Report, Former Coal Gasification Plant
Site Newburgh Site" prepared by Blasland, Bouck & Lee for
Respondent, dated December 1988, revised September 1989.  No
later than 30 days after the effective date of this Order,
Respondent shall submit to the Department any other data and
information it has in its possession respecting the Site.  The
other data and information shall include, to the extent known and
in Respondent's possession:

      A.  A brief history and description of the Site, including
operations, facilities, and equipment and the types, quantities,
physical state, location, and, if applicable, dates of disposal
of hazardous substances, including methods of disposal and
spillage of such substances:

      B.  A comprehensive list and copies of all existing relevant
reports and memoranda with titles, authors, and subject matter,
as well as a description of the results of all previous
investigations of the Site and areas in the vicinity of the Site,
including copies of all available plans, drawings, topographic
and property surveys, engineering studies and surface and aerial
photographs; and

      C.  An 8.5 inch by 11 inch portion of a United States
Geological Survey topographic map of the Site which contains the
name of the quadrangle and an arrow indicating the orientation of
a northern compass point.

If any of the data or information is contained in documents
concerning which a claim of privilege may be asserted, including
such claims of privilege relating to the City lawsuit, Respondent
shall provide such data and information but need not disclose the
privileged mental impressions, conclusions, opinions, or legal
theories of counsel or Respondent's staffs request for same, as
provided under applicable New York State law.

II.  PERFORMANCE AND REPORTING OF REMEDIAL INVESTIGATION

      A.    1.  An outline for an RI/FS work plan is approved by
the Department and is attached to, and is incorporated into, this
Order as Exhibit "A".

            2.  Within 45 days after the effective date of this
Order, Respondent shall submit to the Department and to the City
a chronological description of the anticipated RI activities
together with a schedule for the performance of those activities
and, within 90 days after the effective date of this Order, shall
submit to the Department and to the City a work plan for the Site
and other areas of investigation that is consistent with Exhibit
"A" and that shall incorporate all appropriate elements of an
RI/FS as set forth in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA") [42 USC 9601
ET SEQ.], as amended; the National Contingency Plan ("NCP") of
March 8, 1990 [40 CFR Part 300]; the USEPA guidance document
entitled "Guidance for Conducting Remedial Investigations and
Feasibility Studies under CERCLA," dated October 1988 and any
subsequent revisions to that guidance document in effect at the
time the RI/FS Work Plan is submitted; and appropriate USEPA and
Department technical and administrative guidance documents (the
"RI/FS Work Plan").  Respondent may request that certain
requirements contained in the items listed in the preceding
sentence not be followed because they are unnecessarily and
needlessly burdensome for obtaining additional data at the Site
and other areas of investigation.  The Department shall not
unreasonably deny such requests when reviewing Respondent's RI/FS
Work Plan.

      B.  In accordance with the schedule contained in the Site's
Department-approved RI/FS Work Plan, Respondent shall commence
the Site's Remedial Investigation.

      C.  Respondent shall perform the Remedial Investigation in
accordance with the Site's Department-approved RI/FS Work Plan.

      D.  During the performance of the Site's Remedial
Investigation, Respondent shall have at the Site and at other
areas covered by the Remedial Investigation a full-time
representative who is qualified to supervise the work done. 
Respondent's designated representative may be a qualified
employee of a consultant or contractor.

      E.  In accordance with the schedule contained in the Site's
Department-approved RI/FS Work Plan, Respondent shall prepare a
Remedial Investigation Report that shall:

            1.  include all data generated and all other
information obtained during the remedial investigation of the
Site and other areas covered by the Remedial Investigation;

            2.  identify any additional data that must be
collected; and

            3.  provide all appropriate assessments and evaluations
set forth in CERCLA, the NCP, and the guidance documents
identified in Subparagraph II.A.2 of this Order; and

            4.  include a certification by the individual or firm
with primary responsibility for the day to day performance of the
Remedial Investigation at the Site and other areas of
investigation that all activities that comprised the Remedial
Investigation were performed in full accordance with the
Department-approved RI/FS Work Plan.

III.  FEASIBILITY STUDY

      A.    1.  Upon review and approval of the Remedial
Investigation Report, the Department shall determine whether
hazardous substances found at the Site and other areas of
investigation that have migrated from or otherwise originated
from the Site (the "hazardous substances at issue") constitute a
significant threat to the environment.  Such determination shall
be in writing and provided to Respondent and the City.

            2.  Within 150 days after receipt of the Department's
approval of the Remedial Investigation Report, Respondent shall
submit to the Department and to the City a Feasibility Study
evaluating on-Site and off-Site remedial actions to eliminate, to
the maximum extent practicable, all health and environmental
hazards and potential hazards attributable to disposal or release
of hazardous substances at issue.  Such evaluation may include
remediation cleanup levels based upon a site-specific risk
assessment that shall consider a range of exposure scenarios and
assumptions that take into account the form, nature,
biodegradation, fate, and transport of the contaminants present,
available toxicological data that are based upon generally
accepted and peer-reviewed scientific evidence or methodologies,
and current and expected future uses of the Site and other areas
covered by the Remedial Investigation, which may include
appropriate institutional controls.  The site-specific risk
assessment shall be consistent with guidance and regulations for
exposure assessment developed by the United States Environmental
Protection Agency pursuant to CERCLA and other statutory
authorities as applicable; and any proposed remediation cleanup
level based upon a site-specific risk assessment shall be
protective of the public health and safety and of the
environment.  In the event that Respondent intends to undertake
such evaluation using a Site-specific risk assessment, Respondent
shall submit such risk assessment to the Department and to the
City for their respective review no later than 90 days before
Respondent shall be required to submit the Feasibility Study. 
Unless the Department determines that such risk assessment is not
consistent with the expected future uses of the Site, the City's
property, or other covered areas and or not consistent with peer-
reviewed scientific evidence or methodologies, or appropriate
guidance and regulations--in which case, the Department shall
provide Respondent with a written explanation of the basis for
such a determination--the Site-specific risk-based remediation
cleanup level determined by application of the risk assessment
shall be approved by the Department and shall be used for
purposes of selecting the remedial alternative for the Site and
other areas covered by the Remedial Investigation.  Such
evaluation also shall take into account any and all Department-
approved IRMs that were implemented at the Site and other areas
covered by the Remedial Investigation.  The Feasibility Study
shall be prepared by and have the signature and seal of a
professional engineer who shall certify that the Feasibility
Study was prepared in accordance with this Order.

      B.  Respondent shall perform and prepare the Feasibility
Study in accordance with the Department-approved RI/FS Work Plan
in a manner consistent with appropriate sections of CERCLA, the
NCP, and the guidance documents identified in Subparagraph II.A.2
of this Order.

      C.    1.  Within 30 days after the Department's approval of
the Feasibility Study, Respondent shall cooperate and assist the
Department in soliciting public comment on the RI/FS and the
proposed remedial action plan identified therein, in accordance
with appropriate provisions of CERCLA, the NCP, the guidance
documents identified in Subparagraph II.A.2. of this Order, and
with any Department policy and guidance documents in effect at
the time the public comment period is initiated.  

            2.  The Department shall afford Respondent and the City
an opportunity to review and comment upon the proposed remedial
action plan before its release to the public using the following
procedure:  the Department shall prepare a proposed remedial
action plan and shall mail a copy of same to Respondent and to
the City at least fifteen business days before the scheduled date
of publication of the notice of availability of the document. 
Respondent and the City shall have ten business days to meet with
the Department to discuss it.  In the event that Respondent
disputes the proposed remedial action plan within that ten day
period, it may request in writing a resolution of its dispute
using the procedures contained in Subparagraph XVI.A of this
Order.  Any resolution of this dispute through the use of those
procedures shall concern only the contents of the proposed
remedial action plan to be released to the public and shall not
preclude the Department from selecting a final remedial
alternative for the Site or other area covered by the Remedial
Investigation that shall have been released to the public.

            3.  After the close of the public comment period, the
Department shall select a final remedial alternative for the Site
and other areas covered by the Remedial investigation in a Record
of Decision ("ROD").  The ROD shall be incorporated into and
become an enforceable part of this Order.

IV.  IRMs

      A.    1.  Respondent may propose one or more IRMs for the
Site or other area of investigation.

            2.  In proposing each IRM, Respondent shall submit to
the Department--and to the City, if the IRM is proposed to be
undertaken on City property--a work plan that includes a
chronological description of the anticipated IRM activities
together with a schedule for performance of those activities (an
"IRM Work Plan" for the Site or other area of investigation).

            3.  Upon the Department's determination that the
proposal is an appropriate IRM and upon the Department's approval
of such work plan, the IRM Work Plan shall be incorporated into
and become an enforceable part of this Order; and Respondent
shall submit to the Department--and to the City, if the IRM is
proposed to be undertaken on City property--for review and (as
appropriate) Department approval, in accordance with the schedule
contained in the Department-approved IRM Work Plan, detailed
documents and specifications prepared, signed, and sealed by a
professional engineer to implement the Department-approved IRM. 
Such documents shall include a health and safety plan,
contingency plan, and (if the Department requires such) a citizen
participation plan that incorporates appropriate activities
outlined in the Department's publication, "New York State
Inactive Hazardous Waste Citizen Participation Plan," dated
August 30, 1988, and any subsequent revisions thereto. 
Respondent shall then carry out such IRM in accordance with the
requirements of the approved IRM Work Plan, detailed documents
and specifications, and this Order.  Respondent shall notify the
Department--and the City, if the IRM were being undertaken on
City property--of any significant difficulties that may be
encountered in implementing the Department-approved work plan,
detailed documents, or specifications and shall not modify any
obligation unless first approved by the Department.

            4.  During implementation of all construction
activities identified in the Department-approved IRM Work Plan,
Respondent shall have at the location where the IRM is being
undertaken a full-time representative who is qualified to
supervise the work done.

            5.  Within the schedule contained in the Department-
approved IRM Work Plan, Respondent shall submit to the
Department--and to the City, if the IRM were undertaken on City
property--a final engineering report prepared by a professional
engineer that includes a certification by that individual that
all activities that comprised the IRM were performed in full
accordance with the Department-approved IRM Work Plan, detailed
documents and specifications, and this Order.

                  i.  If the performance of the Department-approved
IRM encompassed construction activities, the final engineering
report shall include a detailed post-remedial operation and
maintenance plan ("O&M Plan"); "as-built" drawings and a final
engineering report (each including all changes made to the
Remedial Design during construction); and a certification by a
professional engineer that the IRM was implemented and all
construction activities were completed in accordance with the
Department-approved detailed documents and specifications for the
IRM.  The O&M Plan, "as built" drawings, final engineering
report, and certification must be prepared, signed, and sealed by
a professional engineer.

                  ii.  Upon the Department's approval of the O&M
Plan, Respondent shall implement the O&M Plan in accordance with
the requirements of the Department-approved O&M Plan.

            6.  After receipt of the final engineering report and
certification, the Department shall notify Respondent--and the
City, if the IRM were undertaken on City property--in writing
whether the Department is satisfied that the IRM was completed in
compliance with the Department-approved IRM Work Plan and design.

      B.    1.  In implementing any IRM approved by the Department
under this Order, Respondent shall be exempt from the requirement
to obtain any permit issuable by the Department for an activity
satisfying the criteria set out in Subparagraph III.B.2 of this
Order.
            2.  The following criteria must be met:

                  i.  The activity is conducted on the Site.  For
purposes of this Order, an activity is on the Site:

                        (a) if it is conducted on the same premises
as the Site, or
                        (b) If it is conducted on different premises
that are under common control or are contiguous to or physically
connected with the Site and the activity manages exclusively
hazardous substances for which Respondent is liable (except in
situations where the Remedial Investigation Report discloses the
existence of off-Site hazardous substance deposits derived from,
or otherwise related to materials deposited on-Site, in which
case such deposits shall be deemed "on-Site" and subject to this
Order to the Extent Respondent is able to obtain access for
purposes of investigation and/or removal); and
            
                        (c) the activity is conducted in a manner
which satisfies all substantive technical requirements applicable
if the activity were conducted pursuant to a permit issued by the
Department.

V.    REMEDIAL DESIGN

      A.  Unless the ROD selects the "no action" alternative,
within 180 days after the ROD is signed, or as otherwise
specified in the ROD, Respondent shall submit to the Department
and to the City a remedial design to implement the remedial
alternative for the Site and areas covered by the Remedial
Investigation selected by the Department in the ROD (the
"Remedial Design").  The Remedial Design shall be prepared by and
have the signature and seal of a professional engineer who shall
certify that the Remedial Design was prepared in accordance with
this Order.

      B.  The remedial Design shall included the following:

            1.  A detailed description of the remedial objectives
and the means by which each essential element of the selected
remedial alternative will be implemented to achieve those
objectives, including, but not limited to:

                    i. the construction and operation of any
structures; 

                   ii. the collection, destruction, treatment,
and/or disposal of hazardous substances and their constituents
and degradation products, and of any soil or other materials
contaminated thereby;

                  iii. the collection, destruction, treatment,
and/or disposal of contaminated groundwater, leachate, and air;

                   iv. physical security and posting of the Site and
other areas covered by the Remedial Investigation;

                    v. health and safety of persons living and/or
working at or in the vicinity of the Site and areas covered by
the Remedial Investigation;

                   vi. quality control and quality assurance
procedures and protocols to be applied during implementation of
the Remedial Design; and

                  vii. monitoring which integrates needs which are
present on-Site and off-Site during implementation of the
Department-selected remedial alternative.

            2.  "Biddable quality" documents for the Remedial
Design including, but not limited to, documents and
specifications prepared, signed, and sealed by a professional
engineer.  These plans shall satisfy all applicable local, state
and federal laws, rules and regulations;

            3.  A time schedule to implement the Remedial Design;

            4.  The parameters, conditions, procedures, and
protocols to determine the effectiveness of the Remedial Design,
including, if the Remedial Design encompasses groundwater
monitoring, a schedule for periodic sampling of groundwater
monitoring wells on-Site and off-Site;

            5.  A description of operation, maintenance, and
monitoring activities to be undertaken after the Department has
approved construction of the Remedial Design, including the
number of years during which such activities will be performed;

            6.  A contingency plan to be implemented if any element
of the Remedial Design fails to achieve any of its objectives or
otherwise fails to protect human health or the environment;

            7.  A health and safety plan for the protection of
persons at and in the vicinity of the Site and other areas
covered by the Remedial Investigation during construction and
after completion of construction.  This plan shall be prepared in
accordance with 29 CFR 1910 by a certified health and safety
professional;

            8.  A citizen participation plan which incorporates
appropriate activities outlined in the Department's publication,
"New York State Inactive Hazardous Waste Citizen Participation
Plan," dated August 30, 1988, and any subsequent revisions
thereto; and

            9.  A plan for coordination with affected property
owners on whose properties remediation activities will occur.

VI.   REMEDIAL CONSTRUCTION

      A.  Within such time as identified in the Department's
approval of the Remedial Design, Respondent shall commence
construction of the Remedial Design.  The Department will extend
this period if reasonably necessary to accommodate weather-
related limitations or other restrictions upon the construction
season, or problems with accessing property not owned or
controlled by Respondent.

      B.  Respondent shall implement the Remedial Design in
accordance with the Department-approved remedial Design.

      C.  During implementation of all construction activities
identified in the Remedial Design, Respondent shall have at the
location of construction activities a full-time representative
who is qualified to supervise the work done.

      D.  Within 90 days after completion of the construction
activities identified in the Remedial Design, Respondent shall
submit to the Department and the City a detailed post-remedial
operation and maintenance plan ("O&M Plan"); "as-built" drawings
and a final engineering report (each including all changes made
to the Remedial Design during construction); and a certification
by a professional engineer that the Remedial Design was
implemented and all construction activities were completed in
accordance with the Department-approved Remedial Design.  The O&M
Plan, "as-built" drawings, final engineering report, and
certification must be prepared, signed, and sealed by a
professional engineer.

      E.  Upon the Department's approval of the O&M Plan,
Respondent shall implement the O&M Plan in accordance with the
requirements of the Department-approved O&M Plan.

      F.  After receipt of the "as-built" drawings, final
engineering report, and certification, the Department shall
notify Respondent and the City in writing whether the Department
is satisfied that all construction activities have been completed
in compliance with the approved Remedial Design.

      G.  If the Department concludes that any element of the
Remedial Program fails to achieve is objectives or otherwise
fails to protect human health or the environment, Respondent
shall take whatever action the Department determines necessary to
achieve those objectives or to ensure that the Remedial Program
otherwise protects human health and the environment.

VII.  PROGRESS REPORTS AND MEETINGS

      A.  Respondent shall submit to each of the parties set forth
in Paragraph XV of this Order two copies of written monthly
progress reports that:

            1.  describe the actions which have been taken toward
achieving compliance with this Order during the previous month;

            2.  identify all work plans, reports, and other
deliverables required by this Order that were completed and
submitted during the previous month;

            3.  describe all actions, including, but not limited
to, data collection and implementation of work plans, that are
scheduled for the next month and provide other information
relating to the progress at the Site and other areas of
investigation;

            4.  include information regarding percentage of
completion, unresolved delays encountered or anticipated that may
affect the future schedule for implementation of the Respondent's
obligations under the Order, and efforts made to mitigate those
delays or anticipated delays; and

            5.  include any modifications to any work plans that
Respondent has proposed to the Department or that the Department
has approved.  Respondent shall submit these progress reports to
the Department and to the City by the 10th day after the end of
the month to which the report pertains.

      B.  Respondent shall allow the Department and the City to
attend and shall provide the Department and the City at least
seven days advance notice of the occurrence of, any of the
following:  prebid meetings, job progress meetings, substantial
completion meeting and inspection, and final inspection and
meeting; provided, however, that if circumstances are such as to
prevent Respondent from providing the Department or the City with
such seven day notice period, Respondent shall provide as much
advance notice as possible, under the circumstances.

VIII.  REVIEW OF SUBMITTALS

      A.    1.  The Department shall review each of the submittals
Respondent is required to make pursuant to this Order to
determine whether it was prepared, and whether the work done to
generate the data and other information in the submittal was
done, in accordance with this Order and generally accepted
technical and scientific principles.  Respondent shall include
all results of sampling and tests and all other data received or
generated by Respondent or Respondent's contractors or agents,
including quality assurance/quality control information, whether
conducted pursuant to this Order or conducted independently by
Respondent, in the submittal to which such sampling, tests, and
other data pertain.  The Department shall notify Respondent and
the City in writing of its approval or disapproval of the
submittal, except for the health and safety plains identified in
Subparagraphs IV.A(3) and V.B(7) of this Order.  All Department-
approved submittals shall be incorporated into and become an
enforceable part of this Order.

            2.    i. If the Department disapproves a submittal, it
shall so notify Respondent and the City in writing and shall
specify the reasons for its disapproval.  Within 30 days after
receiving written notice that Respondent's submittal has been
disapproved, Respondent shall make a revised submittal to the
Department and to the City that addresses and resolves all of the
Department's stated reasons for disapproving the first submittal.

                  ii. Within a reasonable time after receipt of the
revised submittal so as to not cause Respondent to be unable to
comply with subsequent obligations and schedule deadlines as
presented in Department-approved work plans, the Department shall
notify Respondent and the City in writing of its approval or
disapproval.  If the Department disapproves the revised
submittal, Respondent shall be in violation of this Order and the
Department may take any action or pursue whatever rights it has
pursuant to any provision of statutory or common law, unless
Respondent exercises the dispute resolution procedure described
in Subparagraph XVI.A of this Order.  If the Department approves
the revised submittal, it shall be incorporated into and become
an enforceable part of this Order.

      B.  The Department may require Respondent to modify and/or
amplify and expand a submittal if the Department determines, as a
result or reviewing data generated by an activity required under
this Order or as a result of reviewing any other data or facts,
that further work is necessary.

IX.   PENALTIES

      A.  Respondent's failure to comply with any term of this
Order constitutes a violation of this Order and the ECL.  Nothing
in this Order precludes Respondent from contesting in a
Department hearing any possible future Department allegations
that Respondent failed to comply with this Order or from
contesting any penalty for an alleged failure to comply.

      B.  With respect to the period during which the condition
shall exist, Respondent shall not suffer any penalty under this
Order or be subject to any proceeding or action for enforcement
of this Order if it cannot comply with any requirement hereof
because of war, riot, failure to obtain access to City property,
or an unforeseeable disaster which the exercise of ordinary human
prudence could not have prevented.  Respondent shall, within five
days of when it obtains knowledge of any such condition, notify
the Department and the City in writing.  Respondent shall include
in such notice the measures taken and to be taken by Respondent
to prevent or minimize any delays and shall request an
appropriate extension or modification of this Order.  Failure to
give such notice within such five-day period constitutes a waiver
of any claim that a delay is not subject to penalties. 
Respondent shall have the burden of proving that an event is a
defense to compliance with this Order.

X.    ENTRY UPON SITE

      Subject to conditions as may be described in the Site's
health and safety plan, Respondent hereby consents to the entry
upon the Site or areas in the vicinity of the Site which may be
under the control of Respondent by any duly designated employee,
consultant, contractor, or agent of the Department or any State
agency for purposes of inspection, sampling, and testing and to
ensure Respondent's compliance with this Order.

XI.   PAYMENT OF STATE COSTS

      The Department shall establish an interest-bearing account
into which the Department shall place all monies received from
Respondent under the provisions of this Paragraph in order to pay
for the State's expenses (including, but not limited to, direct
labor and fringe benefits, overhead, travel, analytical costs,
and contractor costs) incurred by the State of New York to fund
environmental monitors for work associated with reviewing and
revising submittals made pursuant to this Order, overseeing
activities conducted pursuant to this Order, collecting and
analyzing samples, and administrative costs associated with
administering the requirements of this Order.  Respondent shall
make payments to the Department as follows:

      A.  Respondent shall submit to the Department the sum of
$150,000, which shall represent the State's estimate of the first
year expenses (including, but not limited to, direct labor and
fringe benefits, overhead, travel, analytical costs, and
contractor costs) incurred by the State of New York to fund
environmental monitors for work associated with reviewing and
revising submittals made pursuant to this Order to date,
overseeing activities conducted pursuant to this Order,
collecting and analyzing samples, and administrative costs
associated with administering the requirements of this Order. 
Respondent shall make subsequent quarterly payments to the
Department for the duration of this Order in order to maintain an
account balance sufficient to meet the next nine months'
anticipated above-described State costs.  Each quarterly billing
will be based on expenditures incurred to date.  The quarterly
billing will take into account matters such as inflation, salary
increases, accrued interest to be applied to the balance, changes
in operating hours and procedures and the need for additional
personnel and supervision of such personnel by full-time
supervisors.  Costs and expenses to be covered by this account
include:

            1.  Direct personal service costs and fringe benefits
of the State's staff assigned to work associated with reviewing
and revising submittals made pursuant to this Order, overseeing
activities conducted pursuant to this Order, collecting and
analyzing samples, and administrative costs associated with
administering the requirements of this Order, including their
supervisors and including the costs of replacement personnel for
the persons regularly assigned to these duties;

            2.  Direct non-personal service costs, including but
not limited to purchase of a vehicle if necessary and its full
operating costs, any appropriate chemical sampling and analysis,
travel, supplies, and contractual costs;

            3.  Indirect support or overhead costs at the annually
approved indirect support cost rate; and

            4.  Consultant services.

      B.  The Department shall notify Respondent in writing when a
quarterly payment is due by submitting a quarterly billing. 
Respondent shall make such payment in the form of a check payable
to the order of the New York State Department of Environmental
Conservation and shall submit such payment to the Department at
the following address no later than 30 days from receipt of such
billing:

      New York State Department of Environmental Conservation
      50 Wolf Road, Room 525
      Albany, NY 12233-1510
      ATTENTION:  Director of Environmental Monitors

Payments are to be in advance of the period in which they will be
expended.

      C.  Upon the later termination of this Order and upon
payment of any outstanding costs and expenses, the Department
shall return the unexpended balance, including interest, to
Respondent.

      D.  Actual costs incurred will be documented by quarterly
T&A reports for personal service costs.  Copies of actual
invoices will not be provided but shall be made available for
auditing purposes.

XII.  DEPARTMENT RESERVATION OF RIGHTS

      A.  Nothing contained in this Order shall be construed as
barring, diminishing, adjudicating, or in any way affecting any
of the Department's rights.

      B.  Nothing contained in this Order shall be construed to
prohibit the Commissioner or his duly authorized representative
from exercising any summary abatement powers.

XIII. INDEMNIFICATION

      Respondent shall indemnify and hold the Department, the
State of New York, and their representatives and employees
harmless for all claims, suits, actions, damages, and costs of
every name and description arising out of or resulting from the
fulfillment or attempted fulfillment of this Order by Respondent,
and/or Respondent's directors, officers, employees, servants,
agents, successors, and assigns; provided, however, that
Respondent shall not indemnify the Department, the State of New
York, and their representatives and employees in the event that
such claim, suit, action, damages, or cost relate to or arise
from any unlawful, willful, grossly negligent, or malicious acts
or omissions on the part of the Department, the State of New
York, or their representatives and employees.

XIV.  PUBLIC NOTICE

      A.  Within 30 days after the effective date of this Order
with respect to the Site; or within 30 days after Respondent
acquires ownership in any property affected by this Order,
Respondent shall file, with respect to the Site or such property,
a Declaration of Covenants and Restrictions with the Clerk of the
County within which the Site or such property is located to give
all parties who may acquire any interest in the Site or such
property notice of this Order.

      B.  If Respondent proposes to convey the whole or any part
of Respondent's ownership interest in any property affected by
this Order, including the Site, Respondent shall, not fewer than
60 days before the date of conveyance, notify the Department in
writing of the identity of the transferee and of the nature and
proposed date of the conveyance of the property in question and
shall notify the transferee in writing, with a copy the
Department, of the applicability of this Order and shall
accompany such notification with a copy of this Order.

XV.   COMMUNICATIONS

      A.  All written communications required by this Order shall
be transmitted by United States Postal Service, by private
courier service, or by hand delivery as follows:

            1.  Communication from Respondent shall be sent to:

                        Charles N. Goddard, P.E.
                        Assistant Director
                        Division of Hazardous Waste Remediation
                        New York State Department of Environmental
                         Conservation
                        50 Wolf Road
                        Albany, New York 12233-7010

with copies to:

            Director, Bureau of Environmental Exposure
            Investigation
            New York State Department of Health
            2 University Place
            Albany, New York 12203

            Regional Director
            New York State Department of Environmental Conservation
            21 South Putt Corners
            New Paltz, New York 12561-1696

            Charles E. Sullivan, Jr., Esq.
            New York State Department of Environmental Conservation
            50 Wolf Road, Room 400
            Albany, New York 12233-5550

and, where this Order requires that a document or other
communication be sent to the City, to:

            Clifford P. Case, Esq.
            Carter, Ledyard & Milburn
            2 Wall Street
            New York, New York 10005

            2.  Communication to be made from the Department to
Respondent shall be sent to:

            Mr. Jeffrey A. Clock
            Director of Environmental Affairs
            Central Hudson Gas & Electric Corporation
            284 South Avenue
            Poughkeepsie, New York 12601-4879

            Robert J. Glasser, Esq.
            Gould & Wilkie
            One Chase Manhattan Plaza
            New York, New York 10005-1401

            Dennis P. Harkawik, Esq.
            Jaeckle, Fleischmann & Mugel
            Fleet Bank Building
            Twelve Fountain Plaza
            Buffalo, New York 14202-2292

with a copy of same to Mr. Case where this Order requires that a
copy of same be sent to the City.

The Department, the City, and Respondent reserve the right to
designate additional of different addresses for communication
upon written notice to the other.

      B.    Copies of work plans and reports shall be submitted as
follows:

            1.  Four copies (one unbound) to Mr. Goddard.
      
            2.  Two copies to Director, Bureau of Environmental
Exposure Investigation.
      
            3.  One copy to the Regional Director, Region 3.
      
            4.  One copy to Mr. Sullivan.

            5.  One copy to Mr. Case.

      C.    1.  within 30 days of the Department's approval of any
report submitted pursuant to this Order, Respondent shall submit,
if requested, to Mr. Goddard a computer readable magnetic media
copy of the approved report in American Standard Code for
information Interchange (ASCII) format.

            2.  Within 30 days after the Department's approval of
the RI/FS, Respondent shall submit to Mr. Goddard one microfilm
copy (16 millimeter roll film M type cartridge) of the
Department-approved RI/FS.  Within 30 days after its approval of
the drawings and submittals described in Subparagraph VII.A of
this Order, Respondent shall submit one microfilm copy (16
millimeter roll film M type cartridge) of such Department-
approved drawings and submittals, as well as all other
Department-approved submittals other than the Department-approved
RI/FS.

XVI.  MISCELLANEOUS

      A.    1.  If after conferring in good faith, there remains a
dispute between Respondent and the Department concerning a
provision of this Order identified as subject to this
Subparagraph's procedures, within the time period provided in
that provision Respondent shall serve on the Department and the
City a request for an appointment of an Administrative Law Judge
("ALJ"), and a written statement of the issues in dispute, the
relevant facts upon which the dispute is based, and factual data,
analysis, or opinion supporting its position, and all supporting
documentation on which Respondent relies (hereinafter called the
"Statement of Position").  The Department shall serve upon
Respondent and the City its Statement of Position, including
supporting documentation no later than ten (10) business days
after receipt of Respondent's Statement of Position.  Respondent
and the City each shall have five (5) business days after receipt
of the Department's Statement of Position within which to serve
upon the Department a reply to the Department's Statement of
Position, and in the event Respondent or the City serves such a
reply, the Department shall have five (5) business days after
receipt of Respondent's or the City's reply to the Department's
Statement of Position within which to serve upon Respondent or
the City the Department's reply to Respondent's or the City's
reply to the Department's Statement of Position.  In the event
that the periods for exchange of Statements of Position and
replies may cause a delay in the work being performed under this
Order, the time periods may be shortened upon and in accordance
with notice by the Department as agreed to by Respondent.

            2.  The Department shall maintain an administrative
record of any dispute being addressed under this Subparagraph. 
The record shall include the Statement of Position of each party
served pursuant to Subparagraph XVI.A.1 and any relevant
information.  The record shall be available for review of all
parties and the public.

            3.  Upon review of the administrative record as
developed pursuant to this Subparagraph, the ALJ shall issue a
final decision and order resolving the dispute.  If the matter in
dispute concerns a submittal, 

                    i. Respondent shall revise the submittal in
accordance with the Department's specific comments, as may be
modified by the ALJ and except for those which have been
withdrawn by the ALJ, and shall submit a revised submittal.  The
period of time within which the submittal must be revised as
specified by the Department in its notice of disapproval shall
control unless the ALJ revises the time frame in the ALJ's final
decision and order resolving the dispute.

                   ii. After receipt of the revised submittal, the
Department shall notify Respondent and the City in writing of its
approval or disapproval of the revised submittal.

                  iii. If the revised submittal fails to address the
Department's specific comments, as may be modified by the ALJ,
and the Department disapproves the revised submittal for this
reason, Respondent shall be in violation of this Order and the
ECL.

            4.  In review by the ALJ of any dispute pursued under
this Subparagraph, Respondent shall have the burden of proving by
a preponderance of the evidence that the Department's position
should not prevail.

            5.  A deadline involving any matter that is the subject
of the dispute resolution process described in this Subparagraph
shall be held in abeyance while it is the subject of the dispute
resolution process unless the Department and Respondent otherwise
agree in writing.  The invocation of the procedures stated in
this subparagraph shall constitute an election of administrative
remedies by Respondent, and such election of this remedy shall
constitute a waiver of any and all other administrative remedies
which may otherwise be available to Respondent regarding the
issue in dispute.

      B.  All activities and submittals required by this Order
shall address both on-Site and off-Site contamination resulting
from the disposal of hazardous substances for which Respondent or
its predecessors of affiliates is responsible; subject, however,
to the limitation that Respondent is not hereby required to
remediate hazardous substances that are not hazardous substances
at issue and that are not intermingled with hazardous substances
at issue.

      C.  Respondent shall retain professional consultants,
contractors, laboratories, quality assurance/quality control
personnel, and data validators acceptable to the Department to
perform the technical, engineering, and analytical obligations
required by this Order.  Within 30 days after completion of
Respondent's retainer process resulting in the selection of a
particular firm or individual to perform any of such obligations,
Respondent shall submit to the Department and to the City a
summary of the experience, capabilities, and qualifications of
the firm or individual retained.  Respondent must obtain the
Department's approval of these firms or individuals before the
initiation of any activities for which Respondent and such firms
or individuals will be responsible.

      D.  The Department and the City shall have the right to
obtain split samples, duplicate samples, or both, of all
substances and materials sampled by Respondent, and the
Department also shall have the right to take its own samples. 
Respondent shall have the right to obtain split samples,
duplicate samples, or both, of all substances and materials
sampled by the Department, and Respondent also shall have the
right to take its own samples.  Respondent shall make available
to the Department and the City the results of all sampling and/or
tests or other data generated by Respondent with respect of
implementation of this Order, including a tabular summary of any
such results in any report submitted pursuant to this Order
requiring such results.

      E.  Respondent shall notify the Department and the City at
least 10 working days in advance of any field activities to be
conducted pursuant to this Order.  The Department's project
manager is hereby authorized to approve any modification to an
activity to be conducted under a Department-approved work plan in
order to adapt the activities to be undertaken under such work
plan to the conditions actually encountered in the field,
provided that such modification does not impair the effectiveness
of the remediation of the Site or other area covered by the
Remedial Investigation.

      F.  Respondent shall use reasonable efforts to obtain
whatever permits, easements, rights-of-way, rights-of-entry,
approvals, or authorizations are necessary to perform
Respondent's obligations under this Order.  If Respondent is
unable, after exhaustion of such reasonable efforts, to obtain
any such permissions, the Department will exercise whatever
authority is available to it, in its discretion, to obtain same. 
In no event will Respondent be determined to be in violation of
this Order if it fails to obtain any such permissions after
exhausting reasonable efforts to obtain same.  This is in
recognition of the facts that Respondent is the current owner of
only part of the potential area of disposal of hazardous
substances at issue.  Significant impediments may, therefore, be
encountered as to Respondent's ability to obtain access for
purposes of carrying out the requirements of this Order.

      G.  If Respondent determines, in connection with its
obligations under this Order, that a valid claim exists in favor
of Respondent as against any other potentially responsible party,
for contribution toward response costs deemed necessary by the
Department (or for recovery of an appropriate portion of such
costs previously incurred by Respondent), the Department shall
provide, in a timely manner, information responsive to any
reasonable request (otherwise in conformity with Freedom of
Information Law requirements) by such party and any other
relevant information that may be helpful in substantiating
Respondent's claim.  Similarly, if Respondent or the City
requests access to non-privileged and otherwise disclosable
information in the Department's possession and relevant to the
potential liability of any person or entity who may be subject to
such claim by Respondent or a claim by the City for contribution
or cost recovery, the Department will take reasonable steps to
expedite Respondent's or the City's access to such information.

      H.  Respondent and its successors and assigns shall be bound
by this Order.  Any change in ownership or corporate status of
Respondent including, but not limited to, any transfer of assets
or real or personal property shall in no way alter Respondent's
responsibilities under this Order.  Respondent's officers,
directors, employees, servants, and agents shall be obliged to
comply with the relevant provisions of this Order in the
performance of their designated duties on behalf of Respondent.

      I.  Respondent shall provide a copy of this Order to each
contractor hired to perform work required by this Order and to
each person representing Respondent with respect to the Site and
shall condition all contracts entered into hereunder upon
performance in conformity with the terms of this Order. 
Respondent or Respondent's contractors shall provide written
notice of this Order to all subcontractors hired to perform any
portion of the work required by this Order.  Respondent shall
nonetheless be responsible for ensuring that Respondent's
contractors and subcontractors perform the work to be done under
this Order in accordance with this Order.

      J.  All references to "professional engineer" in this Order
are to an individual licensed and registered to practice
professional engineering in accordance with Article 145 of the
New York State Education Law.  If that individual is a member of
a firm, that firm must be authorized to offer professional
engineering services in the State of New York under that Article.

      K.  All references to "days" in this Order are to calendar
days unless otherwise specified.

      L.  The section headings set forth in this Order are
included for convenience of reference only and shall be
disregarded in the construction and interpretation of any of the
provisions of this Order.

      M.  Nothing contained in this Order shall be construed as an
admission by Respondent regarding any allegation raised in the
City lawsuit or is intended to be for the benefit of third
parties.  This Order shall not be construed as barring,
diminishing, or restricting Respondent's ability to seek cost
recovery, contribution, or indemnification from third parties,
including the City, other than the State of New York.

      N.    1.  The terms of this Order shall constitute the
complete and entire Order between Respondent and the Department
concerning the Site and areas covered by the Remedial
Investigation pertaining to the matters identified in this Order. 
No term condition, understanding, or agreement purporting to
modify or vary any term of this Order shall be binding unless
made in writing and subscribed by the party to be bound.  No
informal advice, guidance, suggestion, or comment by the
Department regarding any report, proposal, plan, specification,
schedule, or any other submittal shall be construed as relieving
Respondent of Respondent's obligation to obtain such formal
approvals as may be required by this Order.

            2.  If Respondent desires that any provision of this
Order be changed, Respondent shall make timely written
application, signed by the Respondent, to the Commissioner
setting forth reasonable grounds for the relief sought.  Copies
of such written application shall be delivered or mailed to
Messrs. Goddard and Sullivan, with a copy to Mr. Case.

      O.  The effective date of this Order shall be the date it is
signed by the Commissioner or his designee.

DATED:  October 04, 1995, New York



                                    MICHAEL D. ZAGATA
                                    Commissioner
                                    New York State Department of
                                     Environmental Conservation

                                          by: 

                                              (SGD.) MICHAEL D. ZAGATA
                                          ------------------------------


<PAGE>
                             CONSENT BY RESPONDENT

      Respondent hereby waives its right to a hearing herein as
provided by law; consents to the issuance and entry of this
Order; and agrees to be bound by its terms, not to contest the
authority or jurisdiction of the Department to issue or enforce
this Order, and not to contest the validity of this Order or its
terms.

CENTRAL HUDSON GAS & ELECTRIC CORPORATION

by:    (SGD.) RONALD P. BRAND
      -----------------------------------------------------
                        Ronald P. Brand
      Vice President, Engineering and Environmental Affairs


Date signed:  October 20, 1995



STATE OF NEW YORK       )
                        ) SS:
COUNTY OF ALBANY        )

      On this 20TH day of October, 1995, before me personally
appeared Ronald P. Brand, to me known, who, being duly sworn, did
depose and say that he is Vice President, Engineering and
Environmental Affairs of the Central Hudson Gas & Electric
Corporation; that he has the authority to bind the aforementioned
corporation by virtue of his position within such corporation;
and that he executed the foregoing instrument on behalf of said
corporation.


Charles E. Sullivan
- --------------------
Notary Public  State of New York
Registration number:____________
My commission expires:__________



Charles E. Sullivan, Jr.
Notary Public, State of New York
      No. 4695830
Qualified in Rensselaer County
Commission expires October 31, 1995


<PAGE>





[Map]                   8.5 inch by 11 inch portion of a United
                        States Geological Survey Typographic Map
                        depicting the general location of Central
                        Hudson's property located at Renwick Street
                        and Marine Drive.

<PAGE>





[Map]                   Illustration of approximate boundaries of
                        properties to be investigated, with major
                        features shown.

<PAGE>
                                    REVISED
                      PRELIMINARY RI/FS WORK PLAN OUTLINE

           FORMER NEWBURGH MGP SITE AND OTHER AREAS OF INVESTIGATION

In September 1995, the New York State Department of Environmental
Conservation (NYSDEC) and Central Hudson Gas & Electric
Corporation (CHG&E) will execute an Order on Consent requiring
CHG&E to investigate and, if necessary, remediate hazardous
substances located at a former CHG&E manufactured gas plant (MGP)
at South Water Street in the City of Newburgh, New York.  Under
the Consent Order, CHG&E will also investigate and, if necessary,
remediate any hazardous substances that have migrated from the
former MGP Site or were generated at the MGP Site and disposed
off site, including the City of Newburgh sewage treatment plant
(STP).  The former MGP Site and other areas of investigation are
shown on Figure 1.

Blasland, Bouck & Lee, Inc. (BBL), on behalf of CHG&E, has
prepared this Remedial Investigation/Feasibility Study (RI/FS)
Work Plan Outline to assess the presence and extent of hazardous
substances found at the former MGP or were disposed off site.

A.    Work and Ancillary Plans

1.0   Work Plan

- -     Includes the elements of a Remedial Investigation (RI),
      Baseline Risk Assessment (RA), and Feasibility Study (FS). 
      The details of the RI, RA, and FS elements are set forth in
      Sections B., C., and D. of this outline.  The Work Plan and
      its elements will be consistent with the technical and
      administrative guidelines set forth in the Comprehensive
      Environmental Response, Compensation, and Liability Act
      (CERCLA) Act of 1980 (42 U.S.C., Sections 9601 ET SEQ.), the
      National Contingency Plan (NCP) of March 8, 1990 (40 CFR
      Part 300), the United States Environmental Protection Agency
      (USEPA) guidance document entitled, "Guidance for Conducting
      Remedial Investigations and Feasibility Studies Under
      CERCLA, Interim Final," dated October 1988 (and subsequent
      revisions thereto), and other appropriate USEPA and NYSDEC
      technical and adminstrative guidance documents.  The Work
      Plan will include a schedule to complete the proposed RI and
      a conceptual preliminary schedule to complete the Baseline
      RA and FS in accordance with the Order on Consent.

2.0   Sampling and Analysis Plan

- -     Consists of two sections:  the Quality Assurance Project
      Plan (QAPP) and the Field Sampling Plan (FSP).  The QAPP
      will address the analytical measurements and procedures to
      be used during implementations of the RI, while the FSP will
      set forth the RI field procedures.

2.1   QAPP

- -     Objectives to present Quality Assurance/Quality Control
      (QA/QC) procedures to be implemented during the RI that are
      necessary to achieve the data quality objectives (DQOs).

      QAPP includes:

      -     Project Description;
      -     Project Organization and Responsibilities;
      -     Quality Assurance Objectives for Data Management;
      -     Sampling Procedures;
      -     Sample and Documentation Custody;
      -     Calibration Procedures and Frequency;
      -     Analytical Procedures;
      -     Data Reduction, Validation, and Reporting;
      -     Field and Laboratory Quality Control Checks;
      -     Performance and System Audits;
      -     Preventive Maintenance;
      -     Data Assessment Procedures;
      -     Corrective Action; and
      -     Quality Assurance Reports to Management.

2.2   FSP

- -     Objectives to address the field procedures and sample
      collection methods to be used during implementation of the
      RI.  The FSP will be prepared in conformance with the
      methods presented in the "Compendium of Superfund Field
      Operations Method" (EPA/540/p-87/001, USEPA OWSER Directive
      9355-0-14), dated December 1987, and applicable NYSDEC
      documents.

      FSP includes:

      -     Site Background;
      -     Sampling Objectives;
      -     Sample Location and Frequency;
      -     Sample Designation;
      -     Sampling Equipment and Procedures; and
      -     Sample Handling and Analysis.

3.0   Health and Safety Plan

- -     Objectives to set forth applicable current health and safety
      procedures as identified by the Occupational Safety and
      Health Administration and/or the National Institute for the
      National Institute for Occupational Safety and Health
      (OSHA/NIOSH), USEPA guidelines, and health effects data and
      standards for known constituents.




      Health and Safety Plan (HSP) includes:

      -     Background information about the areas of
            investigation, including known and suspected
            constituents;
      -     An areas of investigation map;
      -     Key personnel and their associated responsibilities
            regarding health and safety;
      -     A health and safety risk or hazard analysis for each
            activity that may cause exposure to impacted soils,
            ground water, or air;
      -     Employee training and medical surveillance
            requirements;
      -     Personal protective equipment and clothing required
            during investigation activities;
      -     Special procedures including control measures,
            decontamination protocols, air monitoring requirements,
            etc.;
      -     Emergency response and contingency plans; and
      -     Community air monitoring plan.

4.0   Citizens Participation Plan

      Citizens Participation Plan (CPP) includes:

      -     Public Participation Activities;
      -     Basic Information on the Areas of Investigation;
      -     Project Description;
      -     Identification of Interested Parties;
      -     Project Contact Persons;
      -     Document Repository; and
      -     Definition of Commonly Used Citizen Participation
            Terms.

      The CPP will consider the guidance set forth in:

      -     NYSDEC.  "New York State Inactive Hazardous Waste Site
            Citizen Participation Plan,"  (August 30, 1988).

B.    Remedial Investigation

1.0   Background Information Review

Substantial information has been obtained regarding the former
Newburgh MGP by CHG&E during previous investigations.  Likewise,
the city of Newburgh has performed a subsurface investigation and
is believed to have further information on the STP property.  The
existing investigative information will be evaluated along with
other sources of information, to design a focused Remedial
Investigation (RI) of the areas of investigation (Figure 1), as
described below.




      1.1   Areas of Investigation History 

      -     Evaluation of the history of the former Newburgh MGP
            using the Phase II Investigation Report (BB&L, 1989),
            the Phase I Report (EA Science & Technology (EA),
            1987), and supplemental sources of information from
            Sanborn Fire Insurance Atlases; Brown's Directories;
            Orange County Historical Society files; drawings and
            files from CHG&E not previously incorporated into the
            two aforementioned reports; and NYSDEC, USEPA, and
            other regulatory files.  Specifically, the following
            information will be included in the history of the
            former MGP:

            -     Locations and uses of MGP facilities;
            -     Information on cut and fill activities (if any);
            -     Waste disposal practices;
            -     Historical MGP sit observations (including the
                  odor complaint and the observation of oily
                  discharge); and
            -     Locations of subsurface MGP and/or public
                  utilities and pipelines at and adjacent to the
                  former MGP.

      -     Evaluation of the history of the other areas of
            investigation, including the city of Newburgh STP
            property, using Sanborn Atlases, Orange County
            Historical Society files, and drawings and files from
            the city of Newburgh.  Specifically, the following
            information will be reviewed, if available, from the
            city of Newburgh:

            -     Information on cut and fill areas/activities
                  during STP construction and subsequent upgrades;
            -     Current and former waste disposal practices of the
                  STP, the former incinerator, and other entities
                  located at the areas of investigation;
            -     Location of any current or former underground or
                  aboveground storage tanks and/or structures for
                  storing wastes and/or solid or liquid materials;
            -     Geotechnical investigations conducted prior to the
                  STP construction, subsequent plant upgrades,
                  and/or other structures at the areas of
                  investigation (e.g., incinerator, utilities,
                  etc.);
            -     Location of subsurface utilities associated with
                  the STP, and other areas of investigation;
            -     Current or historic aerial photographs and maps;
            -     Information regarding the Hudson River adjacent to
                  the STP; and 
            -     Any historical (pre-STP) site information.



      1.2   Investigation History

      -     Summary of previous investigations conducted by CHG&E
            and the city of Newburgh, specifically from the Phase 1
            and 11 Reports for the former Newburgh MGP (BB&L, 1989
            and EA, 1987, respectively) and the Subsurface
            Investigation Report prepared for the city of Newburgh
            (First Environment, November 1994).

      1.3   Physical Setting

      -     Overview of the existing topography, subsurface
            utilities (current and historical), geology (overburden
            [including fill] and bedrock), hydrogeology (overburden
            [including fill] and bedrock), and hydrology of the
            areas of investigation, including the former Newburgh
            MGP and the city of Newburgh STP property, based on
            existing reports (see 1.2 above) as well as publicly
            available information from the NYSDEC, United States
            Geological Survey (USGS), New York State Geological
            Survey (NYGS), New York State Department of Health
            (NYSDOH), Orange County Department of Health (OCDH),
            and other applicable sources.

      1.4   Ecological Setting

      -     Overview of the ecological setting of the areas of
            investigation as consistent with a Fish and Wildlife
            Impact Analysis (FWIA), as further described in Section
            C. 2.0, based on publicly available information from
            NYSDEC, USEPA, United States Fish and Wildlife Service
            (USFWS), local universities and colleges, and/or other
            local resources.

      -     Information obtained for this overview will include the
            following: significant habitats; habitats supporting
            endangered, threatened, or rare species; regulated
            wetlands; wild, scenic, and recreational rivers; fish
            and wildlife resources, aquatic habitats, and wetland
            and river classifications.

      1.5   Preliminary Identification of SCGs

      -     Evaluation of the potential New York State Standards,
            Criteria, and Guidance (SCGs), which are federal,
            state, and/or local standards; requirements, criteria,
            or limitations which are determined to be legally
            applicable or relevant and appropriate.  In addition to
            SCGs, there are federal and state advisories and/or
            guidance which may also be considered and are referred
            to as "to be considereds" (TBCs).



            SCGs which may apply are categorized into the following
            classifications:

            -     Chemical-specific SCGs;
            -     Action-specific SCGs; and
            -     Location-specific SCGs.

2.0   Conceptual Model Preparation

The information gathered under the Background Information Review
will be evaluated with respect to potential source and residual
areas, potential migration pathways, and potential exposure
pathways and receptors.  This conceptual model will serve as the
basis for the identification of data gaps to be fulfilled during
the RI.

      2.1   Potential Source and Residual Areas

      -     Identification of potential source areas and residual
            areas of MGP by-products and constituents as well as
            other such areas in the areas of investigation,
            including by-products and constituents
            generated/disposed of at the Newburgh STP property. 
            Source and residual areas will be evaluated and
            categorized by type and concentrations.  This
            identification will also include an evaluation of the
            relative position of the potential source and residual
            areas in relation to the ground surface and land use.

      2.2   Potential Migration Pathways

      -     Evaluation of information on and the relative
            significance of the potential migration pathways
            associated with the areas of investigation, including
            the ground-water, subsurface utilities, surface water,
            vadose zone, and air migration pathways based on
            existing investigative and publicly available
            information (see 1.2 and 1.3 above).  This evaluation
            will consider both separate phase materials (i.e.,
            LNAPLs and DNAPLs) as well as dissolved phase
            constituents for the ground-water, utility, and surface
            water pathways.  To the extent the information is
            available, potential historical pathways in subsurface
            utilities/surface waters will be identified and
            discussed.  Both overburden and bedrock ground-water
            migration pathways will be considered.  The volatile
            phase will be considered for the vadose zone migration
            pathway.  Both volatile and particulate phases will be
            considered for the air migration pathway.

      2.3   Potential Exposure Pathways and Receptors

      -     Evaluation of available information from CHG&E, the
            city of Newburgh, and the various regulatory agencies
            to confirm that any exposure pathways and receptors
            would be considered non-residential and consist of
            CHG&E, other utility, city of Newburgh employees and
            contractors, and possibly users of the rights-of-way in
            the areas of investigation.  Specific potential areas
            of exposure for the city of Newburgh STP property will
            require input from the city with respect to likely
            future construction activities and land-use associated
            with the property.  Further, such information will be
            used to identify potential future receptors.  The uses
            of the Hudson River near the areas of investigation
            will be utilized to assess potential human exposure
            pathways and receptors (i.e., recreational uses). 
            Environmental exposure pathways and receptors will
            focus on the Hudson River as the areas of
            investigation, including the former MGP and the city of
            Newburgh property, are industrial in nature and provide
            little habitat for terrestrial environmental exposure
            pathways and receptors.  A human health evaluation and
            an ecological evaluation in the form of an FWIA are
            described in C., Baseline Risk Assessment.

3.0   Areas of Investigation Characterization

This portion of the RI will focus on the collection of additional
data to further evaluate potential source and residual areas,
potential migration pathways, and potential exposure pathways and
receptors.  Although specific aspects of the Characterization
will change based on the evaluation of additional data described
in 1.0 and 2.0 above, a preliminary scope of work for the RI is
set forth below.

      3.1   Areas of Investigation Survey

      -     Consists of a planimetric and topographic survey map of
            the areas of investigation using, to the extent
            available, existing mapping and aerial photography.

      -     Includes topography; surface features such as
            buildings, roads, utilities, cultural features, and
            field sampling locations (e.g., test borings,
            monitoring wells, etc.)  Elevations will be determined
            to 0.1 feet for most points except the surface water
            level monitoring points and the monitoring wells, which
            will be determined to 0.01 feet.  All elevations will
            be referenced to the National Geodetic Vertical Datum
            (NGVD) of 1929.

      -     Objectives include providing a base map in support of
            field and assessment activities associated with the RI,
            FWIA, and FS.



      3.2   Source Investigation

      -     Consists of the installation of test borings via
            hollow-stem auger and/or Geoprobe drilling techniques
            (and possibly test pits based on access and health and
            safety considerations), split-spoon sampling at
            suspected source and residual areas, the collection and
            subsequent field and laboratory analysis of both
            surface and subsurface soil samples, and the
            installation of bedrock cores.

      -     Objectives are to confirm the presence of source and
            residual materials, evaluate the origin of such
            materials, and assess the composition and extent of
            source and residual areas.  In addition, the
            borings/corings will be used to evaluate the subsurface
            geology in the areas of investigation.

      -     Anticipated test boring locations and rationale are
            described below:

                               NUMBER OF
      LOCATION                  BORINGS               RATIONALE

SE Corner of former MGP           3-5           Evaluate former tar tank
                                                and tar separator area
                                                and adjacent areas
                                                (between former MGP and
                                                the RR).

East of former MGP                3-5           Evaluate area near
                                                existing former MGP wells
                                                NW-2, NW-4, and adjacent
                                                areas (between former MGP
                                                and the RR).

NE Corner of former MGP            2            Evaluate area between
                                                former MGP and the RR.

Central portion of STP             5            Evaluate area near city
                                                of Newburgh installations
                                                MW-6 and B-2, where
                                                separate phase materials
                                                were observed.

Southern portion of STP         Up to 9         Evaluate in detail the
                                                area near the proposed
                                                clarifier (see Attachment
                                                1, which details an
                                                investigation to evaluate
                                                the area of the proposed
                                                clarifier at the city of
                                                Newburgh STP).

STP (Unspecified)               Up to 10        Evaluate potential
                                                source/residual areas at
                                                the STP property, which
                                                have not been identified
                                                to date.


      Anticipated rock coring locations and rationale are
      described below:

                             NUMBER OF
      LOCATION                CORINGS                 RATIONALE

Near existing well NW-4          1              Evaluate vertical extent
                                                of residues observed at
                                                that location.

Near existing well NW-6          1              Evaluate vertical extent
                                                of residues observed at
                                                that location.

East of former MGP               3              Evaluate horizontal
                                                extent (if any) of
                                                residues between former
                                                MGP and the RR.


- -     In the event the NYSDEC determines that the test borings,
      rock corings, the borings/corings used for monitoring well
      installations, the 15 previously-drilled borings, and the 15
      existing monitoring wells will not provide an adequate
      assessment of the overburden and bedrock geology, additional
      test borings/corings will be installed.

- -     The geologic parameters collected via field observations of
      the overburden include the following:

            Color               Particle              Pliability
                                angularity/
                                shape

            Principal           Particle sizes        Odors/
            components                                discoloration
            (capital
             letters)

            Minor               Density/              Mottling/
            components          consistency           staining
            (and, some,
            little, trace)

            Structure and       Moisture              Weathering
            bedding             content

            Field moisture      Organic               Local name,
            condition           content               if known

            Fill or             Hardness of           Items that
            geologic            coarse                may indicate
            origin, if          particles             age of
            known (in           (Mohs                 deposit;
            parentheses         hardness scale)       archeological
            after moisture                            artifacts,
            condition)                                newspapers, etc.

            Unified Soil        Plasticity of         Fill component
            Classification      fines                 description (cinder,
            System group                              clay, metal, tires,
            symbol                                    etc.)

            Contacts when       Cohesiveness
            observed

- -     In addition, soil samples will be submitted for particle
      size analysis to characterize the subsurface geology.

- -     The geologic parameters collected via field observations of
      the bedrock include the following:

            Friability/fissibility              Strength of intact rock

            Thickness                           Weathered state

            Particle                            Voids
            angularity/shape

            Particle sizes                      Structure/bedding
                                                (bedding planes, joints,
                                                fractures)

            Rock Quality                        Description of discon-
            Designation (RQD)                   tinuities and filings

            Rock type                           Formation name (if known)

            Additional petrographic             Water content
            information

            Texture                             Odors/discoloration

            Hardness                            Fossils

            Color                               Contacts when observed

            Strike/dip



      -     Collection of surface and subsurface soil/source/
            residual samples will be obtained for analytical
            characterization.  Up to 10 surface samples and up to
            10 subsurface source/residual samples will be obtained. 
            In addition, up to 20 subsurface samples will be
            obtained to evaluate the extent of the source/residual
            areas identified.  These samples will be selected based
            on visual observations and field screening (e.g., PID
            and PAH immunoassay screening) to evaluate the vertical
            extent of the source/residual areas identified. 
            Surface samples will be selected from areas, where
            exposure is most likely to occur.  In addition, three
            background surface soil samples will be obtained from
            locations determined in consultation with the NYSDEC. 
            Subsurface samples will be selected to represent the
            source/residual areas observed.  In addition,
            subsurface samples will be selected to represent the
            areas of likely future excavations at the STP property,
            subsurface utilities, and/or other areas of potential
            exposure.

      -     In the event the NYSDEC determines that the 40
            aforementioned samples in conjunction with the over 15
            samples previously obtained will not provide an
            adequate assessment of the nature and extent of the
            source/residual areas, additional samples for field
            and/or laboratory analysis will be obtained.

      -     Surface soil and source/residual subsurface samples
            will be analyzed for the following constituents:

            -     Target Compound List (TCL) organics; and
            -     Target Analyte List (TAL) inorganics.

      -     Subsurface soil samples to assess the extent of the
            source/residual areas will be analyzed for a subset of
            the TCL/TAL.  At this time, this subset is expected to
            consist of the following parameters:

            -     Benzene, toluene, ethylbenzene, and xylene (BTEX);
            -     Polycyclic aromatic hydrocarbons (PAHs); and
            -     Select inorganics.

      -     Selected samples will also be analyzed for:

            -     Total organic carbon (TOC);
            -     Particle size;
            -     Source/residual disposition parameters (e.g., BTU
                  content);
            -     Toxicity Characteristic Leaching Procedure (TCLP)
                  for organics and inorganics;
            -     Reactivity (cyanide, sulfide); and
            -     Ignitability and corrosivity only if the materials
                  contain a liquid component.

      3.3   Geologic Investigation

      -     Utilize the physical information obtained from the
            Source Investigation and the Hydrogeologic
            Investigation described in 3.4 below to further
            evaluate the subsurface overburden geologic materials
            present and the degree to which these materials
            influence the extent and migration of source and
            residual materials.  No additional test borings/rock
            corings and/or monitoring wells specific to this
            investigation are anticipated; however, a geophysical
            investigation may be conducted to assess subsurface
            conditions between test borings/rock corings and
            monitoring wells.

      -     Evaluate use of geophysics, given the limited access
            due to surface and subsurface structures anticipated,
            multiple interferences, and the unknown viability of
            the use of geophysical techniques in this area.  A
            pilot geophysical survey will be conducted prior to
            implementing a full-scale investigation.  Two
            techniques will be piloted:  Ground-Penetrating Radar
            (GPR) and seismic refraction or reflection.  The goals
            of the pilot survey (and a subsequent full-scale
            survey) will be to assess:  the top of bedrock surface;
            the top of till surface; the configuration of
            confining/semi-confining units above the till/bedrock;
            and/or the location of subsurface utilities.  The pilot
            survey will be conducted in conjunction with the boring
            program in the area of the proposed clarifier at the
            city of Newburgh STP.  At this time, we expect this
            geophysical pilot survey to be conducted in the general
            area of River Street, just west of the STP, where the
            depth to bedrock is known (boring SB-6).

      3.4   Hydrogeologic Investigation

      -     Consists of the installation of monitoring wells, the
            collection of ground-water surface-water elevations,
            the performance of in-situ hydraulic conductivity tests
            (possibly packer tests in bedrock), and the collection
            of ground-water samples for laboratory analysis.

      -     Objectives are to evaluate the ground-water quality
            upgradient, in the areas of investigation, and adjacent
            to the Hudson River; to assess the direction(s) of
            ground-water flow (including tidal influences); to
            further evaluate the presence of separate phase
            materials in the subsurface; and to provide a
            monitoring well network.  If separate phase materials
            are present, the monitoring wells will also be used to
            assess the viability of LNAPL/DNAPL recovery.  In
            addition, the borings/corings installed for the
            monitoring wells will be used to evaluate the
            subsurface geology of the areas of investigation.

      -     Anticipated overburden monitoring well locations are
            set forth below, but would be adjusted based on the
            results of the Source Investigation:



  MONITORING WELL LOCATION          NUMBER            RATIONALE

Along South Water Street               3        Evaluate ground-water
                                                quality between former
                                                MGP and RR.

Along River Street                     2        Evaluate ground-water
                                                quality between RR and
                                                STP property near
                                                existing city of Newburgh
                                                SB-6, SB-5, and MW-6.

Within STP property                   3-5       Evaluate water quality
                                                near source/residual
                                                areas identified at the
                                                STP.

Adjacent to the Hudson
River                                  3        Evaluate water quality
                                                between the STP property
                                                and the Hudson River.

            Anticipated bedrock monitoring well locations are set
            forth below, but would be adjusted based on the results
            of the Source Investigation:


  MONITORING WELL LOCATION          NUMBER            RATIONALE

Near existing well NW-4                1        Evaluate deeper bedrock
                                                ground-water quality.

Near existing well NW-6                1        Evaluate deeper bedrock
                                                ground-water quality.

East of former MGP                     3        Evaluate bedrock ground-
                                                water quality east of
                                                former MGP.


      -     In the event the NYSDEC determines that the 18
            additional monitoring well installations and the 15
            existing monitoring wells will not meet the objectives
            of the Hydrogeologic Investigation, additional
            monitoring wells and/or piezometers will be installed.

      -     Water levels will be measured at the existing and newly
            installed monitoring wells.  In addition, water levels
            will be measured at up to five surfaces level measuring
            points in the Hudson River adjacent to the monitoring
            wells installed along the river.

      -     In-situ hydraulic conductivity tests (and possibly
            packer tests in bedrock) will also be performed at the
            newly-installed wells as well as at existing monitoring
            wells (if not previously performed).

      -     Ground-water samples will collected from both new and
            existing wells and analyzed for TCL/TAL constituents,
            field parameters (ph, specific conductivity,
            temperature, turbidity), potential indicators of
            intrinsic biodegradation (e.g., nitrate/nitrite,
            sulfate/sulfite, dissolved oxygen [DO], and oxidation-
            reduction potential [ORP]), and potential treatment
            and/or disposal parameters (selected wells only) (e.g.,
            BOD).

      3.5   Subsurface Utility Investigation (Contingency)

- -     At this time, the presence and extent of MGP-related
      materials adjacent to subsurface utilities are not known. 
      Additional information on the distribution and position of
      the subsurface utilities in conjunction with the
      distribution and position of source and residual materials
      must be obtained prior to implementing specific
      investigation efforts in the RI.

      3.6   Hudson River Investigation

      -     Consists of a river bank reconnaissance for seeps, an
            assessment of the presence of sediments adjacent to the
            STP property via probing along the STP property from
            Renwick to South William Streets, the collection of
            sediment samples for laboratory analysis based on the
            sediment probing, and the collection and analysis of
            surface water samples.  The Hudson River Investigation
            will take into consideration the guidance in the
            following documents:

            -     NYSDEC, Fish and Wildlife Impact Analysis for
                  Inactive Hazardous Waste Sites (Guidelines,
                  Division of Fish and Wildlife October 1994); and
            -     NYSDEC, Technical Guidance for Screening
                  Contaminated Sediments (November 1993).

      -     Objectives are to evaluate the presence of source
            materials, residuals, and/or dissolved constituents in
            the sediment and surface water adjacent to the STP; to
            assess the origin of these materials/constituents; and
            to estimate the volume of any impacted sediments.  In
            addition, information on the water depth, substrate
            composition, and aquatic vegetation will be assessed.

      -     Up to 10 sediment samples will be obtained for
            laboratory analysis and up to five surface-water
            samples will be obtained for laboratory analysis.  If
            any seeps are identified, seep samples will also be
            obtained for laboratory analysis.  In addition, at
            least three upstream sediment samples and one surface-
            water sample will be obtained.  Analytical parameters
            for sediments will be similar to those for soil/source/
            residual samples and will include TOC and particle
            size, while the analytical parameters for surface
            water, including seeps, will be similar to those for
            ground-water samples.

      -     In the event the NYSDEC determines that the 13 sediment
            samples and at least five surface-water samples will
            not provide an adequate assessment of the nature and
            extent of the constituents in the river, additional
            samples for field and/or laboratory analysis will be
            obtained.

      3.7   Air Investigation

      -     No specific air sampling and analysis are anticipated
            (other than that for health and safety considerations),
            and the air investigation will consist of a desk-top
            analysis of air emissions and quality using the surface
            soil data collected.

      -     The Air Investigation will take into consideration the
            guidance in the following documents:

            -     USEPA, "Procedures for Conducting Air Pathway
                  Analysis for Superfund Applications,"
                  AIR/SUPERFUND NATIONAL TECHNICAL GUIDANCE STUDY
                  SERIES, EPA-450/1-89-001 through 004 (Washington,
                  D.C.: July 1989);
            -     NYSDEC, Draft Cleanup Policy and Guidelines
                  Document (October 1991); Appendix A, Air Cleanup
                  Criteria, Division of Air Resources (May 31,
                  1991).

      -     In the event the desk-top analysis indicates that
            actual ambient air monitoring is required per the
            guidance, then a confirmatory air monitoring program
            will be conducted.

4.0   RI Report

- -     Completion of an RI Report summarizing the investigation
      results.

C.    Baseline Risk Assessment


- -     Consists of a human health evaluation and an ecological
      evaluation in the form of an FWIA using USEPA and NYSDEC
      guidance as described below.

1.0   Human Health RA

- -     Characterization of potential risks to human health in
      accordance with USEPA guidance for conducting risk
      assessments.  The components of the Human Health RA include:

            -     Data Evaluation;
            -     Exposure Assessment;
            -     Toxicity Assessment; and
            -     Risk Characterization.

      1.1   Data Evaluation

      -     Assessment of the constituents detected, the levels of
            constituents detected, the environmental media in which
            the constituents were detected, and the locations where
            constituents were observed.  Based on this information,
            the constituents of interest will be determined for
            each medium of interest.

      1.2   Exposure Assessment

      -     Characterization of exposure setting, identification of
            complete exposure pathways, and quantification of
            exposure.

      -     Summary of information regarding exposure setting
            obtained during the RI (e.g., history, location, water
            use) and environmental fate and transport.

      -     Identification of complete pathways of exposure.  A
            pathway will be considered complete if there is:

            -     A known source or release from a source;
            -     There is an exposure point where human contact can
                  occur; and
            -     There is a feasible route of exposure (i.e., oral,
                  dermal, or inhalation) at the exposure point. 
                  Both current and hypothetical future pathways will
                  be identified.  Hypothetical future pathways will
                  be determined based upon chemical migration
                  potential and foreseeable future land use
                  considerations.

      -     Qualifications of human exposure will proceed by
            establishing exposure point concentrations and
            associated intake by humans using available analytical
            data.


      1.3   Toxicity Assessment

      -     Classification of adverse health effects in either of
            two categories:

            -     Carcinogenic effects; and
            -     Non-carcinogenic effects.

      -     A summary of the available toxicity criteria for the
            constituents of interest will be provided, including
            information on:

            -     Constituent name;
            -     Route of exposure/USEPA Human Health Assessment
                  Group Classification (carcinogens only);
            -     Route-specific toxicity criterion;
            -     Tumor site(s) (carcinogens) or critical endpoint
                  (non-carcinogens) for each route of exposure; and
            -     Source of each criterion (e.g., Integrated Risk
                  Information System [IRIS], Health Effects
                  Assessment Table).

      1.4   Risk Characterization

      -     Integration of the results of the data evaluation,
            exposure assessment, and toxicity assessment portions
            of the RA to provide a quantitative evaluation of
            potential human health risks.  Risks will be quantified
            only for those constituents of interest which are:

            -     Associated with complete pathways of exposure; and
            -     Have appropriate toxicity criteria.

      -     The risk characterization will separately address
            carcinogenic and non-carcinogenic effects.

      -     Preparation of a qualitive uncertainty analysis will be
            provided as part of the risk characterization.  Those
            uncertainties which are inherent to the risk assessment
            process will be discussed, along with those
            uncertainties which are specific to this RA.

2.0   Fish and Wildlife Impact Analysis

- -     Conduct Step 1 of the FWIA, consisting of the elements set
      forth below.  Some of the FWIA elements will be obtained
      during the Background Information Review and Conceptual
      Model Preparation as set forth in Sections B. 1.0 and 2.0,
      while some elements will be obtained during the RI.


- -     Objectives include obtaining information on fish and
      wildlife resources in the areas of investigation and
      obtaining information to design the RI.

      2.1   Site Maps

      -     Topographic Map of the areas of investigation and areas
            within two miles of the perimeter of those areas.

      -     Covertype Map of the areas of investigation and areas
            within 0.5 miles of the perimeter of those
            investigation areas.

            -     Drainage Map of the areas of investigation.

      The first two maps will be prepared as a part of the
      Background Information Review and the Conceptual Model
      Preparation, while the Drainage Map will be prepared as a
      part of the Background Information Review (subsurface
      utilities) and the Areas of Investigation Survey of the RI.

      2.2   Description of Fish and Wildlife Resources

            -     Fish and Wildlife Resources and Covertypes.
            -     Fauna Expected Within Each Covertype and Aquatic
                  Habitat.
            -     Observations of Stress.

      These descriptions will be prepared as a part of the
      Background Information Review and the Conceptual Model
      Preparation and during the execution of the RI (direct
      observations of stress).  This section will focus on the
      Hudson River, as the areas of investigation are industrial
      in nature.

      2.3   Description of Fish and Wildlife Resource Value

            -     Value of Habitat to Associated Fauna.  
            -     Value of Resources to Humans.

      These descriptions will be prepared as a part of the
      Background Information Review and the Conceptual Model
      Preparation.

      2.4   Identification of Applicable Fish and Wildlife          
             Regulatory Criteria

      These criteria will identified as a part of the
      identification of SCG's during the Background Information
      Review.

      In the event that the results of Step 1 and the Hudson River
      Investigation indicate additional FWIA steps are necessary,
      these steps will be implemented during supplemental RI
      activities, as required

D.    Feasibility Study

1.0   Definition of Remedial Action Objectives

- -     Evaluation of remedial action objectives (RAOs), which
      consist of medium specific or operable-unit-specific goals
      for protecting human health and the environment.  The RAOs
      will specify constituents of interest, exposure pathway(s)
      and receptor(s), and preliminary remediation goals (PRGs)
      based on chemical-specific federal, state, and local SCGs
      set forth by the NYSDEC, TBCs, and/or site-specific risk-
      based criteria.

      These RAOs will consider the future use of the areas of
      investigation.

2.0   Development and Screening of Remedial Alternatives

- -     Development of management options to protect human health
      and the environment via the following steps:

- -     Development of general response actions (GRAs) for each
      medium of interest (e.g., containment, treatment, etc.) that
      may be taken to satisfy the RAOs;

- -     Identification of volumes or areas of media to which GRAs
      might be applied, taking into account protectiveness and the
      chemical/physical characterization of the areas of
      investigation;

- -     Identification and screening of technologies applicable to
      each GRA to eliminate those that cannot be implemented
      technically;

- -     Secondary screening of technologies based on effectiveness,
      implementability, and cost;

- -     Identification and evaluation of technology process options
      to select a representative process for each technology type
      retained; and

- -     Assembly of the selected technology process options into
      appropriate alternatives representing a range of treatment
      and containment combinations.

3.0   Detailed Analysis of Remedial Alternatives

- -     Evaluation of the assembled remedial alternatives with
      respect to the following criteria:

      Threshold Criteria

      -     Overall protection of human health and the environment
            - addresses whether or not a potential alternative
            would provide adequate protection to human health and
            the environment.  This criterion also describes how
            risks posed through each exposure pathway would be
            eliminated, reduced, or controlled through treatment,
            engineering controls, or institutional controls.

      -     Compliance with SCGs - addressed whether or not a
            potential alternative would meet all of the applicable
            SCGs, or provide grounds by which a waiver for a
            specific SCG could be justified.

      Primary Criteria

      -     Long-term effectiveness and permanence - refers to the
            ability of a potential alternative to maintain reliable
            protection of human health and the environment over
            time, once PRGs have been achieved.

      -     Reduction of toxicity, mobility, or volume through
            treatment - refers to a potential alternative's ability
            to reduce the toxicity, mobility, or volume of
            constituents.

      -     Short-term effectiveness - refers to the ability of a
            potential alternative to maintain reliable protection
            of human health and the environment during the
            construction and implementation phase of an alternative
            (until the PRGs have been achieved).  This criterion
            also evaluates the time period necessary to achieve
            risk protection.

      -     Implementability - evaluates the technical and
            administrative feasibility of a potential alternative,
            including the availability of materials and services
            required to complete the potential alternative.

      -     Cost - includes the evaluation of capital, O&M, and
            present-worth costs associated with a potential
            alternative.

4.0   Comparative Analysis of Remedial Alternatives

- -     Comparison of the relative performance of each remedial
      alternative in relation to the evaluation criteria.  The
      comparative analysis will be presented in tabular form,
      listing each of the remedial alternatives, and including a
      brief summary of the merits or disadvantages of each
      remedial alternative with respect to the evaluation
      criteria.





5.0   Identification of Recommended Alternative

- -     Presentation of the recommended remedial action and the
      rationale for that recommendation.

<PAGE>


Attachment 1






                                                                        DRAFT


                                                                   WORK PLAN


                                  Soil Assessment and Disposition Plan
                                                  At the City of Newburgh
                                                   Sewage Treatment Plant








                            Central Hudson Gas & Electric Corporation
                                                   Poughkeepsie, New York




                                                              February 1995









                                             BLASLAND, BOUCK & LEE, INC.
                                                   ENGINEERS & SCIENTISTS

                                                         6723 Towpath Road
                                                 Syracuse, New York 13214
                                                             (315) 446-9120


<PAGE>

Table of Contents 

                                                               Page

1.0   Introduction                                                1

      1.1   Overview                                              1


2.0   Scope of Work                                               2

      2.1   Work Task 1 - Boring Installation                     2
      2.2   Work Task 2 - Sampling and Analysis                   3
      2.3   Work Task 3 - A Soil Assessment and
             Disposition Report                                   4
      

3.0   Schedule                                                    6

4.0   References                                                  7



FIGURES

1     Proposed Boring Location Map
























                        BLASLAND, BOUCK & LEE, INC.
                          ENGINEERS & SCIENTISTS<PAGE>

1.0   Introduction


1.1   Overview


In August 1994, during excavation activities for a secondary
clarifier at the city of Newburgh sewage treatment plant (STP)
located along Renwick and River Streets (Figure 1), a tar-like
substance was observed in the subsurface.  Since that time, soil
and ground-water samples have been obtained and analyzed from the
STP and areas surrounding the STP, including the property owned
by Central Hudson Gas & Electric Corporation (CHG&E) located
along South Water Street, which formerly housed a manufactured
gas plant (MGP).  This former MGP, known as the Newburgh MGP
Site, was listed on the New York State Registry of Inactive
Hazardous Waste Disposal Sites in 1986 with a classification 2a,
site requiring further investigation.  CHG&E conducted such an
investigation under the terms of a Consent Order with the New
York State Department of Environmental Conservation (NYSDEC) in
1988.  As a result of the investigation, NYSDEC removed the
Newburgh MGP Site from the registry.

Blasland, Bouck & Lee, Inc. (BB&L), on behalf of CHG&E, has
prepared this Work Plan to assess the extent of impacted soil in
the proposed clarifier area such that the appropriate disposition
of the impacted soils can be determined prior to the construction
of the clarifier.

This Work Plan presents the scope of work to fulfill this
objective in Section II, Scope of Work.



















                        BLASLAND, BOUCK & LEE, INC.
                          ENGINEERS & SCIENTISTS<PAGE>

2.0   Scope of Work



The scope of work to address the objective set forth in Section I
will include the installation of borings in the proposed
clarifier area; the performance of sampling and analysis of
representative materials; and the completion of a Soil Assessment
and Disposition Report.  The work tasks necessary to meet the
objectives of the investigation are provided below:


      -     Work Task 1 - Boring Installation

      -     Work Task 2 - Sampling and Analysis

      -     Work Task 3 - Soil Assessment and Disposition Report


2.1   Work Task 1 - Boring Installation

Under this task, up to nine borings will be installed to assess
the extent of impacted soil in the proposed clarifier area.  At
least one of the proposed borings will extend to the top of
bedrock, while the remainder of the borings will extend to
approximately 30 feet below ground level or just below the base
of the proposed clarifier.  In addition up to three temporary
ground-water sampling points will be installed at the water
table.

The borings and the temporary ground-water sampling points will
be installed using the Geoprobe method, a direct push technique
that minimizes soil cuttings.  The Geoprobe system uses a truck-
mounted hydraulic hammer to push a probe to the sample depth. 
The soil samples will be collected with a 2-inch split-spoon
sampler.  In the event, the Geoprobe technology cannot be used
due to subsurface conditions, the boring will be installed using
small-diameter hollow stem augers.

During the installation of the test borings, soil samples will be
collected continuously via a split-spoon sampler, visually
described using the Unified Soil Classification System (USCS),
screened with a photoionization detector (PID) for the presence
and relative concentrations of VOCs, and physically observed for
waste materials.  The PID screening procedures will also provide
for health and safety monitoring during the installation of the
borings.



                        BLASLAND, BOUCK & LEE, INC.
                          ENGINEERS & SCIENTISTS<PAGE>
Soils generated during the drilling will be staged on plastic,
segregated based on visual observations and PID readings, then
transferred to 55-gallon drum containers for subsequent disposal,
or placed back into the borehole mixed with bentonite.  Soils
with visible waste materials will be containerized, while native
soils will be placed back into the borehole to the extent
feasible.

Sampling equipment will be decontaminated prior to initiating the
boring activities, in between each test boring, and at the
completion of all boring activities.  Decontamination will be
conducted at a central location within a plastic-lined pad. 
Decontamination water will be collected and transferred to a
central container for subsequent disposal.


2.2   Work Task 2 - Sampling and Analysis


To further characterize the materials observed at the STP, up to
five composite soil samples will be submitted for hazardous waste
characterization.  Sample selection will be based on visual
evidence of waste materials and/or PID screening measurements.

Hazardous waste characterization will be used to determine if the
materials could be characterized as a hazardous waste and to
evaluate potential disposal options associated with materials
excavated at the STP prior to the construction of the clarifier. 
The methods and parameters for this characterization are as
follows:


      -     Method 1311 for toxicity characterization leaching
            procedure (TCLP) and appropriate SW-846 (USEPA, 1990)
            methods;

      -     Methods per Chapter 7.3 of SW-846 (USEPA, 1990) for
            reactivity (cyanide, sulfide); and

      -     Methods per Chapter 8.1 and 8.2 of SW-846 (USEPA, 1990)
            for ignitability and corrosivity only if the materials
            contain a liquid component as determined by Method
            9095, the Paint Filter Test.

Up to three ground-water samples will also be obtained from the
proposed borings and analyzed for parameters that will be based
on the influent requirements of the city of Newburgh STP.




                        BLASLAND, BOUCK & LEE, INC.
                          ENGINEERS & SCIENTISTS<PAGE>


2.3   Work Task 3 - A Soil Assessment and Disposition Report

Upon completion of this investigation, a Soil Assessment and
Disposition Report based on the findings will be prepared.  The
anticipated format for this report is as follows:


      Section 1.0 Introduction

      Section 2.0 Investigation Results

              2.1 Boring Investigation

              2.2 Sampling and Analysis Results

      Section 3.0 Extent of Impacted Soil

              3.1 Disposition Options

      Section 4.0 Summary and Conclusions


      Tables

            Hazardous Waste Characterization Results 


            Boring Specifications


      Figures

            Site Map


      Attachments

            Analytical Data

            Subsurface Logs









                        BLASLAND, BOUCK & LEE, INC.
                          ENGINEERS & SCIENTISTS<PAGE>


3.0   Schedule


This Work Plan will be initiated within three weeks following
authorization and approval from CHG&E and the NYSDEC.  Once
initiated, the estimated duration to complete the work tasks is
approximately 10 weeks, including laboratory analyses.


<PAGE>

4.0   References


United States Environmental Protection Agency (USEPA), 1990; Test
Methods for Evaluating Solid Wastes, SW-846; Third Edition.


USEPA, 1984; Sampling and Analysis Methods for Hazardous Waste
Combustion, EPA 600/8-84-002.



<PAGE>

Figures


1     Proposed Boring Location Map



<PAGE>









[Map]                   Illustration of investigation area showing
                        approximate location of area of proposed
                        borings to be installed during soil
                        assessment and disposition study.  Attachment
                        1 of revised preliminary RI/FS Work Plan
                        Outline.


<PAGE>






[Map]                   Illustration of investigation area showing
                        approximate location of area of proposed
                        borings to be installed during soil
                        assessment and disposition study.  Attachment
                        1 of revised preliminary RI/FS Work Plan
                        Outline.








































</PAGE>


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