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 October 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 for the third quarter of 2000 increased compared to the same period last year primarily due to cost control efforts and higher retail electricity deliveries. That increase was partially offset by higher costs of energy due to higher market prices.

Earnings decreased $9 million for the nine 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 (NMP2) writeoff. The decrease was primarily due to higher costs of energy due to higher market prices, 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 transmission revenues and cost control efforts.

Operating Results for the Electric Business

Operating revenues decreased for the quarter due to lower wholesale activity and lower retail prices partially offset by higher retail deliveries. Operating expenses decreased for the quarter due to lower purchases of electricity related to lower wholesale activity, partially offset by higher market prices for electricity purchases.

Operating revenues decreased for the nine months due to lower retail prices. That decrease was partially offset by wholesale activity and transmission revenues. Operating expenses increased for the nine months, excluding the non-recurring benefit in 1999 from the sale of an affiliate's coal-fired plants net of the NMP2 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. Those increases were partially offset by cost control efforts and a reduction in amortization of NMP2.

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. Operating expenses increased primarily due to higher retail purchased gas costs caused by higher market prices.

Operating revenues increased for the nine months primarily due to recovery of increased gas costs for non-residential deliveries. Operating expenses increased primarily due to higher retail purchased gas costs caused by higher market prices.

Nine Mile Point 2: (See the company's Form 10-Q for the quarter ended June 30, 2000, Item 2(b) Liquidity and Capital Resources, Nine Mile Point 2.) The company owns an 18% interest in NMP2. In 1999 the majority of the company's investment in NMP2 was recovered through a gain on the sale of its coal-fired generating plants. The remaining balance was written off pursuant to Statement of Financial Accounting Standards No. 121. On May 31, 2000, the company filed a petition with the New York State Public Service Commission (NYPSC) pursuant to its restructuring agreement requesting approval of auction protocols and regulatory treatment for the sale of NMP2.

On October 12, 2000, the company received clarification of the NYPSC's position on their statewide initiative, which was announced earlier this year, and its implications for the sale of NMP2. Based on this clarification, the company has decided to join the selling cotenants and auction its 18% interest in NMP2 pursuant to its restructuring agreement.

Electricity Transmission Rates: The company is responsible for delivering wholesale customers' electricity on its transmission system. Rates charged for the use of the company's transmission system are subject to Federal Energy Regulatory Commission (FERC) approval under FERC Order 888. The company's transmission rate case was filed with the FERC in March 1997. Effective November 1997 the company began charging its filed rate, which was accepted by the FERC subject to refund based on a FERC final order.

On August 17, 2000, the FERC issued an order in the company's transmission rate case that effectively reduced the company's filed rate retroactive to November 1997 and going forward. The company has refunded $14 million to customers, which represents revenues collected subject to refund including interest. The company's deferral of a portion of transmission revenues collected since November 1997 provided the majority of the amount refunded. On September 17, 2000, the company filed a petition for rehearing with the FERC.

Retail Access Credit: (See the company's Form 10-K for the year ended December 31, 1999, Item 7. Liquidity and Capital Resources, Electric Restructuring Plan.) On September 22, 2000, the NYPSC issued an order denying a petition the company had filed in August 2000 related to issues concerning its retail access credit (the amount backed out of a customer's bill when that customer participates in retail access). NYPSC proceedings to review the company's retail access credit are ongoing and issues being addressed include: development of a reasonable mechanism for evaluating if market prices exceed the level of the retail access credit; examination of whether the existing annual retail access credit, whether or not reshaped or restructured, should be increased or replaced with a market-based credit; and any cost of service or other issues that become relevant to resolving those two issues.

New York Independent System Operator: (See the company's Form 10-Q for the quarter ended June 30, 2000, Item 2(b) Liquidity and Capital Resources, New York Independent System Operator.) The NYISO began operating on November 18, 1999. It administers a new, centralized energy and ancillary services market.

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 NYISO is planning to file with the FERC to extend the bid cap.

In early September, the company filed a lawsuit in the New York State Supreme Court against the NYISO for $6.6 million claiming errors in its administration of the operating reserve market, including errors related to market flaws and determination of pricing that was not consistent with the provisions in the NYISO tariffs and contracts. The NYISO is seeking to transfer this action to the United States District Court for the Northern District of New York. The company opposes the transfer on the ground that its complaint raises only state law claims. Pursuant to indemnification provisions of a contract with the NYISO, the company intends to offset its full claim against other funds due the NYISO.

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.

Non-utility Generation: The company petitioned the FERC in 1995, asking for relief from having to pay approximately $2 billion more than its avoided costs for power purchased over the term of two non-utility generator (NUG) contracts. The company's electric restructuring agreement provides for the recovery of those costs for the term of the contracts through a form of a non-bypassable wires charge. The FERC denied the company's petition and its subsequent request for a rehearing. The company believes that the overpayments under the two contracts violate the Public Utility Regulatory Policies Act of 1978.

The company commenced an action in the United States District Court for the Northern District of New York in August 1997. The complaint asked the District Court to either reform the two NUG contracts by reducing the price the company must pay for electricity under the contracts, or send the matter back to the FERC or to the NYPSC with direction that they modify such contracts. The complaint also sought repayment of all monies paid above the company's avoided costs. On September 29, 2000, the District Court dismissed the company's complaint and endorsed the FERC decision denying the company's petition. The company appealed the District Court's decision to the United States Court of Appeals (Second Circuit).

Statement 133: The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, in June 1998; No. 137, Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, in June 1999; and No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of FASB Statement No. 133, in June 2000. Statement 133 establishes standards for the accounting and reporting for derivative instruments and for hedging activities. Statement 133 requires that all derivatives be recognized as either assets or liabilities on a company's balance sheet at their fair value. Statement 137 delayed for one year the effective date for implementing Statement 133, to fiscal years beginning after June 15, 2000. Statement 138 provided guidance on how to interpret sections of Statement 133.

The company will adopt Statement 133 as of January 1, 2001. Substantially all of the company's derivative activity will receive hedge accounting treatment under Statement 133 with fair value adjustments recorded in Other Comprehensive Income. If Statement 133 were adopted on October 1, 2000, the estimated transition adjustment as of September 30, 2000, recorded in Other Comprehensive Income would be approximately $20 million and the effect on earnings would be a loss of less than $1 million. Based on the company's current risk management strategies, this adoption is not expected to have a material effect on its financial position or results of operations.

Investing and Financing Activities

Investing Activities: Capital spending for the first nine months of 2000 was $59 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 electric and natural gas supply requirements; 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-Q for the quarter ended June 30, 2000, Item 3. Quantitative and Qualitative Disclosures about Market Risk.)

Commodity Price Risk: The company is subject 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 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. As of September 30, 2000, 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.

The company has hedged its expected residential natural gas load for November and December 2000, and approximately 60% for calendar year 2001 through gas in storage and option contracts. For its unhedged positions in 2001, a $1.00 per dekatherm change in the cost of natural gas changes natural gas costs by $10 million. The company is currently exploring available options to further hedge its natural gas purchases.

The company uses electricity contracts to manage against 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 contracts for differences (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 approximately 90%-95% of its expected summer demand for 2001 and 2002 and approximately 90% of its total expected demand through March 2003, when a market-price pass through mechanism is expected to take effect pursuant to the company's restructuring agreement.

(See the company's Form 10-Q for the quarter ended June 30, 2000, Part II - Other Information, Item 1(b) Legal Proceedings.) On October 30, 2000, the company and Pennsylvania Electric Company (Penelec) received a letter from EME Homer City Generation, L.P. (EME), a subsidiary of the purchaser of the Homer City generating station (Station) in which the company and Penelec each formerly owned a one-half interest. The letter gave the company and Penelec notice that the U.S. Environmental Protection Agency has found alleged violations of the federal Clean Air Act related to the Station. EME has indicated that it will claim that certain fines, penalties, and costs arising out of or related to these alleged violations, which the company believes may be material, are liabilities retained by the company and Penelec under the terms of the asset purchase agreement for the Station. While it will continue to examine this matter, the company believes that such fines, penalties, and costs are not liabilities retained by it.

(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:  November 8, 2000

The following exhibits are delivered with this report: