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 1-3103-2

(607) 347-4131
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year,
if changed since last report)

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           

The number of shares of common stock (par value $6.66 2/3 per share) outstanding as of July 31, 2000, was 64,508,477. All shares are owned by Energy East Corporation.

TABLE OF CONTENTS

PART I

PART II

New York State Electric & Gas Corporation
Statements of Income - (Unaudited)

New York State Electric & Gas Corporation
Statements of Cash Flows - (Unaudited)

Item 1.  Financial Statements (Cont'd)

Note 1. Unaudited Financial Statements

The accompanying unaudited financial statements reflect all adjustments which are necessary, in the opinion of management, for a fair presentation of New York State Electric & Gas Corporation's (company) results for the interim periods. All such adjustments are of a normal recurring nature. The unaudited financial statements should be read in conjunction with the financial statements and notes contained in the company's Form 10-K for the year ended December 31, 1999. Due to the seasonal nature of the company's operations, financial results for interim periods are not necessarily indicative of trends for a 12-month period.

Note 2. Segment Information

Selected unaudited financial information for the company's business segments is presented in the following table. The electric business segment consists of electricity distribution, transmission and generation operations. The natural gas business segment consists of natural gas distribution, transportation and storage operations. Other represents corporate assets.

Note 3. Reclassifications

Certain amounts have been reclassified on the unaudited financial statements to conform with the 2000 presentation.

Earnings

Earnings were flat for the second quarter of 2000 compared to the same period last year, after excluding the non-recurring benefits in 2000 and 1999 from the sale of an affiliate's coal-fired plants net of the Nine Mile Point 2 writeoff. (See Sale of Affiliate's Coal-fired Generation Assets.) Increases due to certain transmission revenues, which the company began earning this quarter, and cost control efforts were offset by higher purchase costs of electricity and natural gas.

Earnings decreased $15 million for the six months, excluding the non-recurring benefits in 2000 and 1999 from the sale of an affiliate's coal-fired plants net of the Nine Mile Point 2 writeoff. The decrease was primarily due to higher purchase costs of electricity and natural gas, higher than anticipated ancillary services costs associated with the New York Independent System Operator (NYISO) and lower retail electricity prices. Those decreases were partially offset by certain transmission revenues, which the company began earning in the second quarter, cost control efforts and a federal income tax adjustment due to the settlement of the 1995 and 1996 IRS audit.

Operating Results for the Electric Business

Operating revenues increased for the quarter due to wholesale activity and certain transmission revenues that the company began earning this quarter. Those increases were partially offset by lower retail prices. Operating expenses increased for the quarter, excluding the non-recurring benefit in 1999 from the sale of an affiliate's coal-fired plants net of the Nine Mile Point 2 writeoff, due to higher purchase costs of electricity caused by increased deliveries and higher market prices of electricity. Maintenance expenses increased in 2000 due to the Nine Mile Point 2 refueling outage and higher storm costs. Those increases were partially offset by cost control efforts and a reduction in amortization of Nine Mile Point 2.

Operating revenues increased for the six months due to wholesale activity and certain transmission revenues that the company began earning in the second quarter. Those increases were partially offset by lower retail prices. Operating expenses increased for the six months, excluding the non-recurring benefit in 1999 from the sale of an affiliate's coal-fired plants net of the Nine Mile Point 2 writeoff, due to higher purchase costs of electricity primarily due to higher market prices and higher than anticipated ancillary services costs associated with the NYISO. Maintenance expenses increased in 2000 due to the Nine Mile Point 2 refueling outage and higher storm costs. Those increases were partially offset by cost control efforts and a reduction in amortization of Nine Mile Point 2.

Operating Results for the Natural Gas Business

Operating revenues increased for the quarter primarily due to recovery of increased gas costs for non-residential deliveries and higher retail deliveries caused by cooler weather this quarter. Operating expenses increased due to higher purchased gas costs caused by increased market prices.

Operating revenues increased for the six months primarily due to recovery of increased gas costs for non-residential deliveries. Higher wholesale revenues were substantially offset by purchased gas costs. Operating expenses increased primarily due to higher retail purchased gas costs caused by increased market prices, partially offset by cost control efforts.

(See the company's Form 10-Q for the quarter ended March 31, 2000, Item 2(b) Liquidity and Capital Resources - Electric Business.)

Sale of Affiliate's Coal-fired Generation Assets: The sale of an affiliate's seven coal-fired stations and associated assets and liabilities to Edison Mission Energy and The AES Corporation was completed in the first half of 1999. In the second quarter of 2000 the company revised its estimate of deferred taxes related to the coal-fired plants and Nine Mile Point 2. As a result, 1999 depreciation and amortization expense increased, and the writeoff of the remaining investment in Nine Mile Point 2 decreased, by $10 million.

Nine Mile Point 2: The company announced in June 1999 that it had agreed to sell its 18% interest in Nine Mile Point 2 to AmerGen Energy Company, a joint venture of PECO Energy Company and British Energy. In July 1999 the company filed the sale agreement with the Public Service Commission of the State of New York (PSC) for its approval.

On April 5, 2000, the company filed a motion asking the PSC to dismiss the company's July 1999 petition to sell its interest in Nine Mile Point 2 to AmerGen. The company noted that the market for nuclear generation has changed dramatically since the agreement to sell the majority interest in Nine Mile Point 2 was announced in June 1999. The motion also asked the PSC to reaffirm its mandate in the company's restructuring plan that there be an auction of Nine Mile Point 2 with pre-approved protocols and pre-approved regulatory treatment.

On April 25, 2000, the PSC issued an order approving withdrawal of the petition. The order did not specifically provide for pre-approved protocols and pre-approved regulatory treatment. It did note, however, the desirability of selling Nine Mile Point 2 through an open process. The order also noted (1) that the sale of Nine Mile Point 2 at current market values would constitute appropriate mitigation of the utilities' stranded costs and would establish a basis for the PSC to further consider the extent of the utilities' ability to recover their remaining stranded costs and (2) that the PSC would resolve the ratemaking treatment of any sale of Nine Mile Point 2 by following the principles established in the utilities' restructuring orders and examining reduced utility risks and corollary effects resulting from plant divestiture.

On May 11, 2000, the company, Niagara Mohawk and AmerGen executed a termination agreement related to the sale.

On May 31, 2000, the company filed a petition with the PSC asking for approval of proposed auction protocols and ratemaking treatment for the sale of its interest in Nine Mile Point 2. The company has not received a response from the PSC on the May 31, 2000 petition. The company's participation in the auction of Nine Mile Point 2 awaits PSC approval.

New York Independent System Operator: The NYISO began operating on November 18, 1999. The NYISO and the New York State Reliability Council were formed to restructure the New York Power Pool in response to FERC Order 888. FERC Orders 888 and 889 were issued to foster the development of competitive wholesale electricity markets by opening up transmission services and to address the resulting stranded costs. The NYISO administers a new, centralized energy and ancillary services market.

The NYISO continues to experience software and operational breakdowns, which have resulted in unexplained spikes in the price of electricity, billing errors and reliability concerns. Those problems, along with allegations of market power, have resulted in numerous FERC filings by the NYISO and market participants.

On March 31, 2000, the company petitioned the FERC to allow for the recalculation of operating reserve prices in a manner consistent with a properly functioning competitive market and to seek refunds as provided within the framework of the NYISO's tariffs. In response to the company's and other parties' operating reserve filings, on May 31, 2000, the FERC ordered a bid cap for a portion of the operating reserves markets. It also required the NYISO to alter tariff provisions and market mechanisms to address software and implementation flaws in the operating reserves markets. The FERC did not, however, order the recalculation of prices or refunds as sought by the company. Several requests for rehearing have been filed.

In April and May 2000 the company petitioned the FERC to investigate and initiate emergency actions to correct start-up and transitional problems of the NYISO administered energy markets. On June 30, 2000, the NYISO filed a petition requesting a $1,300 bid cap in its administered energy markets. In response to the company's petition concerning the energy markets and the NYISO's bid cap filing, on July 26, 2000, the FERC ordered a bid cap of $1,000 per megawatt-hour in the NYISO's energy markets until October 28, 2000, to give the NYISO time to correct transitional problems.

The company does not expect that the transitional problems in the NYISO energy and operating reserves markets will have a material adverse effect on its financial position or results of operations.

Power Requirements: Approximately 60% of the company's power requirements are satisfied through generation from its nuclear and hydroelectric stations and by purchases under long-term contracts from non-utility generators and the New York Power Authority. At June 30, 2000, the company had electricity contracts through the end of 2000 for 85% of its remaining power requirements and has fully satisfied its expected power requirements for this summer.

Energy Tax Reform: The New York State 2000 Budget includes major reforms to the taxation of electric and natural gas companies. Those reforms include, among others, the repeal of certain gross receipts taxes and the imposition of a net income tax. A PSC proceeding is in progress to determine the ratemaking treatment related to the implementation of these reforms.

Investing and Financing Activities

Investing Activities: Capital spending for the first six months of 2000 was $37 million including nuclear fuel. Capital spending for 2000, including nuclear fuel, is projected to be $80 million and is expected to be paid for entirely with internally generated funds. Capital spending will be primarily for the extension of energy delivery service, necessary improvements to existing facilities and compliance with environmental requirements.

Financing Activities: In January 2000 the company redeemed $163 million of unsecured notes with cash and commercial paper.

Forward-looking Statements

This Form 10-Q contains certain forward-looking statements that are based on management's current expectations and information that is currently available. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements in certain circumstances. Whenever used in this report, the words "estimate," "expect," "believe," "anticipate" or similar expressions are intended to identify such forward-looking statements.

In addition to the assumptions and other factors referred to specifically in connection with such statements, factors that could cause actual results to differ materially from those contemplated in any forward-looking statements include, among others, the deregulation and unbundling of energy services; the company's ability to compete in the rapidly changing and increasingly competitive electricity and natural gas utility markets; its ability to control non-utility generator and other costs; changes in fuel supply or cost and the success of its strategies to satisfy its power requirements now that all of its affiliate's coal-fired generation assets have been sold; market risk; the ability to obtain adequate and timely rate relief; nuclear or environmental incidents; legal or administrative proceedings; changes in the cost or availability of capital; growth in the areas in which it is doing business; weather variations affecting customer energy usage; and other considerations that may be disclosed from time to time in its publicly disseminated documents and filings. The company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

(See the company's Form 10-K for the fiscal year ended December 31, 1999, Item 7A - Quantitative and qualitative disclosures about market risk.)

Commodity Price Risk: The company is exposed to the effect of market fluctuations in the price of natural gas and electricity purchased. The company's natural gas exposure is limited to purchases for residential customers because it is allowed to pass through increases in the market price of natural gas to non-residential customers. The company manages its electricity and natural gas risk by the use of forward purchases, futures, contracts for differences (CFDs) and options.

The company uses natural gas futures and options contracts to manage its exposure to fluctuations in natural gas commodity prices. Such contracts allow the company to fix margins on sales of natural gas. The cost or benefit of natural gas futures and options contracts is included in the commodity cost when the related sales commitments are fulfilled. The difference between cost and fair value of natural gas futures and options contracts outstanding is not material to the company's results of  operations.

At June 30, 2000, the company had purchased option contracts for almost one-half of its residential natural gas load for August through December 2000 to reduce price risk. The company will continue to purchase options to reduce its remaining price risk exposure.

The company uses electricity contracts to manage its exposure to fluctuations in the cost of electricity. These contracts allow the company to fix margins on the majority of its retail electricity sales. The cost or benefit of electricity contracts is included in the amount expensed for electricity purchased when the electricity is sold. With the implementation of the NYISO the company began utilizing CFDs, which are financial contracts with features similar to commodity swap agreements. The CFDs effectively fix the price the company pays for certain power purchased from the NYISO. Using electricity contracts and CFDs, the company has hedged 100% of its expected summer demand for 2000 and approximately 85% of its expected demand through March  2003.

Item 1.  Legal Proceedings

(a)  In February 1988 the New York State Department of Environmental Conservation (NSYDEC) notified the company that it had been identified as a potentially responsible party (PRP) for investigation and remediation of the disposal of hazardous wastes at the Lockport City Landfill Site in Lockport, New York. The Lockport Site is listed on the New York State Registry of Inactive Hazardous Waste Sites. Five other PRPs were identified by the NYSDEC. The Lockport Site has been remediated by the site owner, the City of Lockport. In May 1988 the company notified the NYSDEC that it declined to finance remediation costs because it believed that the NYSDEC had not demonstrated that a significant threat to public health or the environment existed as a result of hazardous waste disposal at the Lockport Site.

On May 17, 2000, the New York State Attorney General's office wrote to the company and eight other PRPs advising them that the State intended to pursue claims against them for about $3.3 million. The company and the other PRPs were asked to enter into an agreement to suspend the statute of limitations and pursue a negotiated settlement. The company (and all other recipients) agreed to the suspension. The company expects negotiations to begin shortly.

(b)  (See the company's Form 10-Q for the quarter ended March 31, 2000, Part II - Other Information, Item 1(b) Legal Proceedings.) The company received a letter in October 1999 from the New York State Attorney General's office alleging that the company may have constructed and operated major modifications to certain emission sources at the Goudey and Greenidge generating stations, which it formerly owned, without obtaining the required prevention of significant deterioration or new source review permits.

On April 19, 2000, the company received a letter from the U.S. Environmental Protection Agency (EPA) requesting information with respect to the operation of the Milliken and Kintigh generating stations, which it formerly owned.

On May 25, 2000, the company received a notice of violation from the NYSDEC alleging that two projects at Goudey and four projects at Greenidge were constructed without the necessary permits having been obtained.

The company believes it has complied with the applicable rules and regulations and there is no basis for the Attorney General's and the NYSDEC's allegations. The company furnished documents pursuant to the Attorney General's and the NYSDEC's requests. It is reviewing its files for documents relating to the EPA's request and for additional documents relating to the Attorney General's and the NYSDEC's requests. The company believes that any liability related to this matter will be the responsibility of AES in accordance with the asset purchase agreement.

The Pennsylvania Department of Environmental Protection has requested records regarding the Homer City plant in which the company formerly had a 50% interest.

(a)  On May 19, 2000, Energy East Corporation, the owner of all of the outstanding shares of the company's common stock, by written consent in lieu of the annual meeting of stockholders, elected Richard Aurelio, Alison P. Cassarett, Joseph J. Castiglia, Lois B. DeFleur, Michael I. German, Kenneth M. Jasinski, John M. Keeler, Walter G. Rich and Wesley W. von Schack directors of the company to hold office until the next annual meeting of stockholders. Directors whose terms of office as directors continue are: James A. Carrigg, Paul L. Gioia and Ben E. Lynch, whose terms expire at the 2001 Annual Meeting of stockholders.

(a)  Exhibits - See Exhibit Index.

(b)  Reports on Form 8-K

     No reports on Form 8-K were filed during the quarter.

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 thereunto duly authorized.

Date:  August 11, 2000

(a) (1) The following exhibits are delivered with this report:

(a) (2) The following exhibits are incorporated herein by reference:

_____________________________
(A)  Management contract or compensatory plan or arrangement.