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By-laws Of - CENTRAL HUDSON GAS & ELECTRIC CORP - 2-15-2002

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By-laws Of - CENTRAL HUDSON GAS & ELECTRIC CORP - 2-15-2002 Powered By Docstoc
					EXHIBIT (3)(vi) BY-LAWS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION

TABLE OF CONTENTS BY-LAWS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION PAGE ARTICLE I. Section Section Section Section Section Section Section Section Section 1. 2. 3. 4. 5. 6. 7. 8. 9. MEETING OF SHAREHOLDERS Place of Meeting Annual Meeting Special Meeting Notice of Meetings Quorum Inspectors Adjournment of Meetings Voting Record Date 1 1 1 1 1 2 2 2 3 3

ARTICLE II. Section Section Section Section Section Section Section Section Section Section Section Section Section Section 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

BOARD OF DIRECTORS Number and Qualifications Election of Directors Term of Office Resignation and Removal Newly Created Directorships and Vacancies Election of Directors by Holders of Preferred Stock Regular Meetings Special Meetings Notice and Place of Meetings Business Transacted at Meetings Quorum and Manner of Acting Compensation Indemnification of Officers and Directors Committees of the Board

3 3 4 4 4 4 4 6 6 6 6 6 7 7 9

ARTICLE III. Section Section 1. 2.

EXECUTIVE COMMITTEE How Constituted and Powers Removal and Resignation

9 9 9

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PAGE Section Section Section Section Section 3. 4. 5. 6. 7. Filling of Vacancies Quorum Record of Proceedings, etc Organization, Meetings, etc Compensation of Members 10 10 10 10 10

ARTICLE IV. Section Section Section Section Section Section Section Section Section Section Section Section Section 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

OFFICERS Election Removal Resignation of Officers Filling of Vacancies Compensation Chairman of the Board of Directors and Chief Executive Officer Vice Chairman of the Board of Directors President and Chief Operating Officer The Vice Presidents The Treasurer Controller The Secretary Other Officers

11 11 11 11 11 12 12 12 12 12 13 13 14 14

ARTICLE V. Section Section Section Section Section 1. 2. 3. 4. 5.

CONTRACTS, LOANS, BANK ACCOUNTS, ETC Contracts, etc., How Executed Loans Checks, Drafts, etc Deposits General and Special Bank Accounts

15 15 15 15 16 16

ARTICLE VI. Section Section Section 1. 2. 3.

CAPITAL STOCK Issue of Certificates of Stock Transfer of Stock Lost, Destroyed and Mutilated Certificates

16 16 16 17

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PAGE ARTICLE VII. Section 1. DIVIDENDS, SURPLUS, ETC General Discretion of Directors 17 17

ARTICLE VIII. Section Section Section Section Section 1. 2. 3. 4. 5.

MISCELLANEOUS PROVISIONS Fiscal Year Waiver of Notice Notices Examination of Books Gender

18 18 18 18 18 19

ARTICLE IX. Section Section 1. 2.

AMENDMENTS Amendment by Directors Amendment by Shareholders

19 19 19

BY-LAWS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION

ARTICLE I. MEETINGS OF SHAREHOLDERS SECTION 1. PLACE OF MEETING. All meetings of the shareholders shall be held at the principal office of the Corporation in the City of Poughkeepsie, County of Dutchess, State of New York, or at such other place or places in the State of New York as may from time to time be fixed by the Board of Directors. SECTION 2. ANNUAL MEETING. The Annual Meeting of the shareholders, for the election of directors and the transaction of such other business as may brought before the meeting, shall be held each year at such date and time of day as the directors may determine. SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may be called by (i) all of the Board of Directors or (ii) by the Chairman of the Board and Chief Executive Officer and one other Director of the Corporation or, (iii) in the absence, unavailability, or inability to act of the Chairman of the Board and Chief Executive Officer, by the President and Chief Operating Officer and one other Director of the Corporation, or (iv) by shareholders together holding at least one third of the capital stock of the Corporation entitled to vote or act with respect thereto upon the business to be brought before such meeting. SECTION 4. NOTICE OF MEETINGS. Notice of any annual or special meeting of the shareholders shall be in writing and shall be signed by the Chairman of the Board of Directors and Chief Executive Officer or the President and Chief Operating Officer or the Secretary or an Assistant Secretary. Such notice shall state the purpose or purposes for which the meeting is called and shall state the place, date and hour of the meeting and, unless it is the annual meeting, indicate that it is being issued by or at the direction of the person or persons calling the meeting. A copy of the notice of any meeting shall be given, personally or by first-class mail, not fewer than

-2ten (10) nor more than sixty (60) days before the date of the meeting, to each shareholder entitled to vote at such meeting. If mailed, such notice is given when deposited in the United States mail, with postage thereon prepaid, directed to the shareholder at his address as it appears on the record of shareholders, or, if he shall have filed with the Secretary of the Corporation a written request that notices to him be mailed to some other address, then directed to him at such other address. An affidavit of the Secretary of the Corporation or other person giving the notice or of a transfer agent of the Corporation that the notice required by this section has been given shall be supplied at the meeting to which it relates. SECTION 5. QUORUM. Except as otherwise provided by statute, the holders of a majority of the shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of any business, provided that when a specified item of business is required to be voted on by a class or series, voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such specified item of business. SECTION 6. INSPECTORS. The person presiding at a shareholders' meeting may, and on the request of any shareholder entitled to vote thereat shall, appoint one (1) or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. The inspectors shall make a report in writing of any matter determined by them and execute a certificate of any fact found by them. SECTION 7. ADJOURNMENT OF MEETINGS. Any meeting of shareholders may be adjourned by a majority vote of the shareholders present or represented by proxy despite the absence of a quorum. When a meeting of shareholders is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the

-3adjourned meeting at which a quorum shall be present, any business may be transacted, and any corporate action may be taken, which might have been transacted or taken if the meeting had been held as originally called. SECTION 8. VOTING. Every shareholder of record shall be entitled at every meeting of the shareholders to one vote for every share of stock standing in his name on the record of shareholders of the Corporation unless otherwise provided in the Certificate of Incorporation and amendments thereto and except as provided in Section 9 of this Article I. Every shareholder entitled to vote at a meeting of shareholders may authorize another person or persons to act for him by proxy. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. A list of shareholders as of the record date certified by the officer responsible for its preparation or by a transfer agent shall be available at every meeting of shareholders and shall be produced upon the request of any shareholder, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting. SECTION 9. RECORD DATE. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action, the Board of Directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than sixty (60) nor less than ten (10) days before the day of such meeting, nor more than sixty (60) days prior to any other action. ARTICLE II. BOARD OF DIRECTORS SECTION 1. NUMBER AND QUALIFICATIONS. The number of directors constituting the entire Board shall be not less than three (3) nor more than ten (10). The number of directors may be increased, or decreased, by amendment of the by-laws adopted by vote of a majority of the entire Board of Directors. Each director shall be at least 18 years of age. No person who has reached age 70 shall stand for election as a director.

-4SECTION 2. ELECTION OF DIRECTORS. Except as otherwise required by law or by the Certificate of Incorporation as amended, and except as hereinafter otherwise provided by Sections 5 and 6 of this Article II, directors shall be elected by a plurality of the votes cast at the annual meeting of shareholders by the holders of shares entitled to vote at the election and shall hold office until the next annual meeting of shareholders. SECTION 3. TERM OF OFFICE. Each director shall, except as hereinafter provided in Section 4 and in Section 6 of this Article II, hold office until the expiration of the term for which he is elected and until his successor has been elected and qualified. SECTION 4. RESIGNATION AND REMOVAL. Any director may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Chairman of the Board of Directors and Chief Executive Officer or the Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein. Any director may at any time, with or without cause, be removed by vote of the shareholders at a special meeting called for that purpose. When, however, pursuant to the provisions of the Certificate of Incorporation as amended, the holders of the shares of any class or series, voting as a class, have the right to elect one (1) or more directors, such director or directors so elected may be removed only by the applicable vote of the holders of the shares of that class or series, voting as a class. SECTION 5. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board for any reason, except the removal of directors without cause, and except as provided for in Section 6 of this Article II, may be filled by vote of a majority of the directors then in office, although less than a quorum exists. A vacancy occurring in the Board by reason of the removal of a director without cause, may be filled only by vote of the shareholders, subject to the provisions of said Section 6. A director elected to fill a vacancy shall be elected to hold office for the unexpired term of his predecessor, and until his successor is elected and qualified. SECTION 6. ELECTION OF DIRECTORS BY HOLDERS OF PREFERRED STOCK. Anything in the by-laws to the contrary notwithstanding: In case dividends on any series of the serial preferred stock of the Corporation at the rate or rates prescribed for such series shall not have been paid in full for periods aggregating one year (1) or more, than, and until full cumulative dividends thereon shall have been paid, the holders of each

-5such series shall have the right, together with holders of all other serial preferred stock in respect to which the same right shall be conferred, to elect a majority of the members of the Board of Directors of the corporation. Whenever the holders of any series of serial preferred stock shall become so entitled, either separately or together with the holders of other serial preferred stock as aforesaid, to elect a majority of the members of the Board of Directors, and upon the written request of the holders of record of at least five percent (5%) of the total number of shares of serial preferred stock then outstanding and entitled to such right of election, addressed to the Secretary of the Corporation, a special meeting of the holders of serial preferred stock entitled to such right of election and the holders of Common Stock shall be called for the purpose of electing directors. At such meeting the holders of serial preferred stock and the holders of Common Stock shall vote separately, and the holders of serial preferred stock present in person or by proxy at such meeting shall be entitled to elect, by a plurality of votes cast by them, a majority of the members of a new Board of Directors of the corporation, and the holders of Common Stock present in person or by proxy shall be entitled to elect, by a plurality of votes cast by them, the remainder of the new Board of Directors. The persons so elected as directors shall thereupon constitute the Board of Directors of the Corporation, and the terms of office of the previous directors of the Corporation shall thereupon terminate. The term "a majority of the members of Board of Directors" as herein used shall mean one (1) more than one half of the total number of directors provided for by the by-laws, regardless of the number then in office, and in case one half of such number shall not be a whole number, such one half shall be the next smaller whole number. In the event of any vacancy in the Board of Directors among the directors elected by the holders of serial preferred stock, such vacancy may be filled by the other directors elected by them, and if not so filled may be filled by the holders of serial preferred stock entitled to the right of election as aforesaid at a special meeting of the holders of said stock called for that purpose, and such a meeting shall be called upon the written request of at least five percent (5%) of the total number of shares of serial preferred stock then outstanding and entitled to such right of election. If and when, however, full cumulative dividends upon any series of the serial preferred stock shall at any subsequent time be paid, then and thereupon such power of the holders of such series of serial preferred stock to vote in the election of a majority of the members of the Board of Directors shall cease; subject, however, to being again revived at any subsequent time if there shall again be default in payment of dividends upon such series of serial preferred stock for periods aggregating one year or more as aforesaid. Whenever such power of the holders of all series of serial preferred stock to vote shall cease, the proper officer of the Corporation may and upon the written request of the holders of record of five percent of the total number of shares of Common Stock then outstanding shall call a special meeting of the holders of Common Stock for the purpose of electing directors. At any meeting so called, the holders of a majority of the Common Stock then outstanding, present in person or by proxy, shall be entitled to elect, by a plurality of votes, a new Board of Directors of the Corporation. The persons so elected as directors shall thereupon constitute the Board of Directors of the Corporation, and the terms of office of the previous directors of the Corporation shall thereupon terminate.

-6SECTION 7. REGULAR MEETINGS. The directors shall hold a regular annual meeting for the election of officers as soon as practicable after the adjournment of the Annual Meeting of the Shareholders, and, in addition, regular meetings of the directors shall be held at such times as the Board of Directors may determine. No notice of the Annual Meeting shall be required if held immediately after the Annual Meeting of the Shareholders and if a quorum is present. SECTION 8. SPECIAL MEETINGS. Special meetings of the directors may be called by (i) the Chairman of the Board of Directors and Chief Executive Officer or, (ii) in the absence, unavailability, or inability to act of the Chairman of the Board and Chief Executive Officer, by the President and Chief Operating Officer and one director of the Corporation, or (iii) by any two (2) directors at any time upon the written request of the Secretary on behalf of the two (2) directors. SECTION 9. NOTICE AND PLACE OF MEETINGS. Regular meetings shall be held at such place or places either within or without the State of New York as the Board of Directors may from time to time determine. Special meetings shall be held at such place or places either within or without the State of New York as may be specified in the respective notices of the meetings. Except as provided in Section 7 of this Article II, notice of any regular or special meeting of the directors shall be mailed to each director addressed to him at his residence or usual place of business at least two (2) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegraph, or be delivered personally or by telephone, not later than the day before the day on which the meeting is to be held. SECTION 10. BUSINESS TRANSACTED AT MEETINGS. Any business may be transacted and any corporate action taken at any regular or special meeting of the directors whether stated in the notice of the meeting or not. SECTION 11. QUORUM AND MANNER OF ACTING. A majority of the directors in office at the time of any meeting of the Board shall constitute a quorum and, except as by law otherwise provided, the act of a majority of the directors present at any such meeting, at which a quorum is present, shall be the act of the Board of Directors. In the event it is necessary to obtain a quorum, at the discretion of the presiding Board member, any one (1) or more members of the Board may be present and participate in a meeting of the Board by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting. In the absence of a quorum, the directors present may adjourn the meeting

-7from time to time until a quorum be had. Notice of any adjourned meeting need not be given other than by announcement at the meeting. The directors shall act only as a Board and the individual directors shall have no power as such. SECTION 12. COMPENSATION. The compensation of the directors, other than employees of the Corporation, for services as directors and as members of committees of the Board shall be as fixed by the Board from time to time. Such directors shall also be reimbursed for expenses incurred in attending meetings of the Board and/or committees thereof. SECTION 13. INDEMNIFICATION OF OFFICERS AND DIRECTORS. A. General Applicability Except to the extent expressly prohibited by the New York Business Corporation Law, the Corporation shall indemnify each person made, or threatened to be made, a party to or involved in any action, suit or proceeding, whether criminal or civil, administrative or investigative by reason of the fact that such person or such person's testator or intestate is or was a Director or Officer of the Corporation, against judgments, fines, penalties, amounts paid in settlement and reasonable expenses, including attorney's fees and expenses, reasonably incurred in enforcing such person's right to indemnification, incurred in connection with such action or proceeding, or any appeal therein, provided that no such indemnification shall be made if a judgment or other final adjudication adverse to such person establishes that such person's acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that such person personally gained in fact a financial profit or other advantage to which such person was not legally entitled, and provided further that no such indemnification shall be required with respect to any settlement or other nonadjudicated disposition of any threatened or pending action or proceeding unless the Corporation has given its prior consent to such settlement or other disposition. b. Scope of Indemnification The Corporation promptly shall advance or reimburse upon request, after receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances of reimbursements, to any person entitled to indemnification hereunder all reasonable expenses, including attorney's fees and expenses, reasonably incurred in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by or on behalf of such person to repay such amount if such person is ultimately found not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced or reimbursed exceed the amount to which such person is entitled; provided, however, that such person shall cooperate in good faith with any request by the Corporation that common counsel be used by the parties to an action or proceeding who are similarly situated unless to do so would be inappropriate due to actual or potential differing interests between or among such parties.

-8c. Other Indemnification Provisions Nothing herein shall limit or affect any right of any Director, Officer or other corporate personnel otherwise than hereunder to indemnification or expenses, including attorney's fees, under any statute, rule, regulation, certificate of incorporation, by-law, insurance policy, contract or otherwise; without affecting or limiting the rights of any Director, Officer or other corporate personnel pursuant to this Article II, the Corporation is authorized to enter into agreements with any of its Directors, Officers or other corporate personnel extending rights to indemnification and advancement of expenses to the fullest extent permitted by applicable law. Unless limited by resolution of the Board of Directors or otherwise, the Corporation shall advance the payment of expenses to the fullest extent permitted by applicable law to, and shall indemnify, any Director, Officer or other corporate person who is or was serving at the request of the Corporation, as a director, officer, partner, trustee, employee or agent of another corporation, whether for profit or not-for-profit, or a partnership, joint venture, trust or other enterprise, whether or not such other enterprise shall be obligated to indemnify such person. d. Survival of Indemnification Anything in these By-Laws to the contrary notwithstanding, no elimination or amendment of this Article II adversely affecting the right of any person to indemnification or advancement of expenses hereunder shall be effective until the 60th day following notice to such person of such action, and no elimination of or amendment to this Article II shall deprive any such person's rights hereunder arising out of alleged or actual occurrences, acts or failures to act prior to such 60th day. e. Inability to Limit Indemnification The Corporation shall not, except by elimination or amendment of this Article II in a manner consistent with the preceding Section 13D and with the provisions of Article IX ("Amendments"), take any corporate action or enter into any agreement which prohibits, or otherwise limits the rights of any person to, indemnification in accordance with the provisions of this Article II. The indemnification of any person provided by this Article II shall continue after such person has ceased to be a Director or Officer of the Corporation and shall inure to the benefit of such person's heirs, executors, administrators and legal representatives. f. Severability In case any provision in this Article II shall be determined at any time to be unenforceable in any respect, the other provisions of this Article II shall not in any way be affected or impaired thereby, and the affected provision shall be given the fullest possible enforcement in the circumstances, it being the intention of the Corporation to afford indemnification and advancement of expenses to its Directors or Officers, acting in such capacities or in the other capacities mentioned herein, to the fullest extent permitted by law.

-9SECTION 14. COMMITTEES OF THE BOARD. The Board, by resolution adopted by a majority of the entire Board, may designate from among its members, in addition to the Executive Committee provided for in Article III of these By-Laws, committees of the Board, each consisting of three (3) or more directors, and each of which shall have the powers and duties prescribed in the resolution designating such committees. Anything in these By-Laws or in the resolution designating such committees to the contrary notwithstanding, at the discretion of the presiding committee member, any one or more members of any committee of the Board of Directors may participate in any meeting of such committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting. ARTICLE III. EXECUTIVE COMMITTEE SECTION 1. HOW CONSTITUTED AND POWERS. The Board of Directors, by resolution adopted by a majority of the entire Board, may designate three (3) or more of the directors, together with the Chairman of the Board of Directors and Chief Executive Officer, to constitute an Executive Committee, to serve at the pleasure of the Board, which Committee shall during the intervals between meetings of the Board of Directors, unless limited by the resolution appointing such Committee, have authority to exercise all or any of the powers of the Board of Directors in the management of the affairs of the Corporation, insofar as such powers may lawfully be delegated. The Board may designate one (1) or more directors as alternate members of such Committee, who may replace any absent member or members at any meeting of such Committee. SECTION 2. REMOVAL AND RESIGNATION. Any member of the Executive Committee, except a member ex officio, may be removed at any time with or without cause, by resolution adopted by a majority of the entire Board. Any member of the Executive Committee may resign at any time. Such resignation shall be in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Chairman of the Board of Directors and Chief Executive Officer or the President and Chief Operating Officer or Secretary. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein. Any person ceasing to be a director shall ipso facto cease to be a member of the Executive Committee.

- 10 SECTION 3. FILLING OF VACANCIES. Any vacancy among the members of the Executive Committee occurring from any cause whatsoever may be filled from among the directors by a majority of the entire Board of Directors. SECTION 4. QUORUM. A majority of the members of the Executive Committee shall constitute a quorum. The act of a majority of the members of the Executive Committee present at any meeting at which a quorum is present shall be the act of the Executive Committee. The members of the Executive Committee shall act only as a committee and the individual members thereof shall have no powers as such. SECTION 5. RECORD OF PROCEEDINGS, ETC. The Executive Committee shall keep a record of its acts and proceedings and shall report the same to the Board of Directors when and as required. SECTION 6. ORGANIZATION, MEETINGS, ETC. The Executive Committee shall make such rules as it may deem expedient for the regulation and carrying on of its meetings and proceedings. SECTION 7. COMPENSATION OF MEMBERS. The members of the Executive Committee shall be entitled to such compensation as may be allowed them by resolution of the Board of Directors.

- 11 ARTICLE IV. OFFICERS SECTION 1. ELECTION. The Board of Directors, at its regular annual meeting, shall elect or appoint from their number a Chairman of the Board of Directors and Chief Executive Officer and the Chairmen of Committees of the Board and may elect or appoint a vice chairman of the Board of Directors and vice chairmen of Committees of the Board, which officers shall be officers of the Board; and it shall elect or appoint a President and Chief Operating Officer, one or more Vice Presidents, a Secretary, a Treasurer, and a Controller which officers shall be officers of the Corporation. Each of said officers, subject to the provisions of Sections 2 and 3 of this Article, shall hold office, if elected, until the meeting of the Board following the next Annual Meeting of shareholders and until his successor has been elected and qualified, or, if appointed, for the term specified in the resolution appointing him and until his successor has been elected or appointed. Any two (2) or more offices may be held by the same person, except the offices of President and Secretary. Should any of the officers of the Board or the President cease to be a director, he shall ipso facto cease to be such officer. SECTION 2. REMOVAL. Any officer may be removed summarily with or without cause at any time by resolution of the Board of Directors, or, except in the case of any officer elected by the Board of Directors, by any committee or officer upon whom such power of removal may be conferred by the Board of Directors, without prejudice, however, to any rights which any such person may have by contract. SECTION 3. RESIGNATION OF OFFICERS. Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, its Chairman and Chief Executive Officer, the President and Chief Operating Officer or Secretary of the Corporation. Such resignation shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the Board of Directors or one (1) of the above-named officers of the Corporation. The acceptance of a resignation shall not be necessary to make it effective unless so specified therein. SECTION 4. FILLING OF VACANCIES. A vacancy in any office, from whatever cause arising, shall be filled for the unexpired portion of the term in the manner provided in these by-laws for the regular election or appointment of such officer.

- 12 SECTION 5. COMPENSATION. The compensation of the officers shall be fixed by the Board of Directors or by any committee or superior officer upon whom power in that regard may be conferred by the Board of Directors. SECTION 6. CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER. The Chairman of the Board and Chief Executive Officer shall, when present, preside at all meetings of the shareholders and the Board of Directors. He shall be Chairman of the Executive Committee. He shall be responsible for direction of the policy of the Board of Directors and shall have the power and perform the duties necessary to implement such responsibility. SECTION 7. VICE CHAIRMAN OF THE BOARD OF DIRECTORS. In the absence of the Chairman of the Board of Directors, the Vice Chairman shall, when present, preside at all meetings of the shareholders and the Board of Directors. He shall have such powers and perform such duties as the Chairman of the Board of Directors and Chief Executive Officer shall delegate to him. SECTION 8. PRESIDENT AND CHIEF OPERATING OFFICER. The President and Chief Operating Officer shall, subject to the authority of the Chairman of the Board of Directors and Chief Executive Officer, have the power and perform the duties usually appertaining to the President and Chief Operating Officer of a corporation, and such power and duties as the Chairman of the Board and Chief Executive Officer shall assign to him. SECTION 9. THE VICE PRESIDENTS. The Vice Presidents shall have such duties as may from time to time be assigned to them by the Board of Directors or the President and Chief Operating Officer, or by the Chairman of the Board and Chief Executive Officer in the President and Chief Operating Officer's absence. When performing the duties of the President and Chief Operating Officer, they shall have all the powers of, and be subject to all the restrictions upon, the President.

- 13 SECTION 10. THE TREASURER. The Treasurer shall: (a) Except as otherwise ordered by the Board, have charge and custody of, and be responsible for all funds, securities, receipts and disbursements of the Corporation and shall deposit, or cause to be deposited, all money and other valuable effects in its name in such banks, trust companies or other depositaries as shall be selected in accordance with these by-laws; (b) Receive and give receipts for payments made to the Corporation and take and preserve proper receipts for all monies disbursed by it; (c) In general, perform such duties as are incident to the office of Treasurer, or as may be from time to time assigned to him by the Board of Directors, the Chairman of the Board and Chief Executive Officer or the President and Chief Operating Officer, or as may be prescribed by law or by these by-laws. The Treasurer shall give to the Corporation a bond if, and in such sum as, required by the Board of Directors, conditioned for the faithful performance of the duties of his office and the restoration to the Corporation at the expiration of his term of office, or in case of his death, resignation or removal from office, of all books, papers, vouchers, money or other property of whatever kind, in his possession belonging to the Corporation. SECTION 11. CONTROLLER. The Controller shall: (a) Keep at the office of the Corporation correct books of account of all its business and transactions, subject to the supervision and control of the President and Chief Operating Officer and Treasurer; (b) Exhibit at all reasonable times his books of accounts and records to any of the directors upon application during business hours at the office of the Corporation where such books and records are kept; (c) Render a full statement of the financial condition of the Corporation whenever requested so to do by the Board of Directors, the Chairman of the Board and Chief Executive Officer or the President and Chief Operating Officer; and

- 14 (d) In general, perform such duties as may be from time to time assigned to him by the Board of Directors, the Chairman of the Board and Chief Executive Officer or the President and Chief Operating Officer. SECTION 12. THE SECRETARY. The Secretary shall: (a) Keep the minutes of the meetings of the shareholders, Board of Directors and Executive Committee in books provided for the purpose; (b) See that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) Be custodian of the seal of the Corporation and see that it or a facsimile thereof is affixed to all stock certificates prior to their issue, and that it is affixed to all documents the execution of which under the seal of the Corporation is duly authorized or which require that the seal be affixed thereto; (d) Have charge of the stock certificate books of the Corporation and keep, or cause to be kept, at the office of the Corporation or at the office of its transfer agent or registrar, a record of shareholders of the Corporation, containing the names and addresses of all shareholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof; and (e) In general, perform such duties as are incident to the office of Secretary, or as may be from time to time assigned to him by the Board of Directors, the Chairman of the Board and Chief Executive Officer or the President and Chief Operating Officer, or as are prescribed by law or by these by-laws. SECTION 13. OTHER OFFICERS. Other officers, including one (1) or more additional Vice Presidents, may from time to time be appointed by the Board of Directors or by any officer or committee upon whom a power of appointment may be conferred by the Board of Directors, which other officers shall have such powers and perform such duties as may be assigned to them by the Board of Directors, the Chairman of the Board and Chief Executive Officer or the President and Chief Operating Officer and shall hold office for such terms as may be designated by the Board of Directors or the officer or committee appointing them.

- 15 ARTICLE V. CONTRACTS, LOANS, BANK ACCOUNTS, ETC. SECTION 1. CONTRACTS, ETC., HOW EXECUTED. The Board of Directors, except as in these by-laws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances, and, unless so authorized by the Board of Directors, no officer or agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credits or to render it liable pecuniarily for any purpose or to any amount. SECTION 2. LOANS. No loans shall be contracted on behalf of the Corporation and no negotiable paper shall be issued in its name, unless authorized by the vote of the Board of Directors. When so authorized, any officer or agent of the Corporation may effect loans and advances for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual and for such loans and advances may make, execute and deliver promissory notes, bonds or other evidences of indebtedness of the corporation. When so authorized any officer or agent of the Corporation, as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, may pledge, hypothecate or transfer any and all stocks, securities and other personal property at any time held by the Corporation, and to that end endorse, assign and deliver the same. Such authority may be general or confined to specific instances. The Board of Directors may authorize any mortgage or pledge of, or the creation of a security interest in, all or any part of the corporate property, or any interest therein, wherever situated. SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidence of indebtedness issued in the name of the Corporation shall be signed by the Treasurer or such other officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

- 16 SECTION 4. DEPOSITS. All funds of the Corporation shall be deposited from time to time to its credit in such banks, trust companies or other depositaries as the Board of Directors may select, or as may be selected by an officer or officers, agent or agents of the Corporation to whom such power, from time to time, may be delegated by the Board of Directors and, for the purpose of such deposit, checks, drafts and other orders for the payment of money which are payable to the order of the Corporation may be endorsed, assigned and delivered by the President and Chief Operating Officer or a Vice President, or the Treasurer or the Secretary, or by any officer, agent or employee of the Corporation to whom any of said officers, or the Board of Directors, by resolution, shall have delegated such power. SECTION 5. GENERAL AND SPECIAL BANK ACCOUNTS. The Board of Directors may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositaries as the Board may select and may make such special rules and regulations with respect thereto, as it may deem expedient. ARTICLE VI. CAPITAL STOCK SECTION 1. ISSUE OF CERTIFICATES OF STOCK. Certificates for shares of the capital stock of the Corporation shall be in such form as shall be approved by the Board of Directors. They shall be numbered, as nearly as may be, in the order of their issue and shall be signed by the Chairman of the Board and Chief Executive Officer or by the President and Chief Operating Officer or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employee. SECTION 2. TRANSFER OF STOCK. Shares of the capital stock of the Corporation shall be transferable by the holder thereof in person or by duly authorized attorney upon surrender of the certificate or certificates for such shares properly endorsed. Every certificate of stock exchanged or returned to the Corporation shall be appropriately cancelled. A person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof as regards the Corporation. The Board of Directors may make such other and further rules and regulations as they may deem necessary or proper concerning the issue, transfer and registration of stock certificates.

- 17 SECTION 3. LOST, DESTROYED AND MUTILATED CERTIFICATES. The holder of any stock of the Corporation shall immediately notify the corporation of any loss, destruction or mutilation of the certificates therefor. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it alleged to have been lost or destroyed, and the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate or his legal representatives to give the Corporation a bond in such sum and with such surety or sureties, as they may require to indemnify the Corporation, and any registrar or transfer agent of its stock, against any claim that may be made against it by reason of the issue of such new certificate and against all other liability in the premises. ARTICLE VII. DIVIDENDS, SURPLUS, ETC. SECTION 1. GENERAL DISCRETION OF DIRECTORS. The Board of Directors shall have the power from time to time to fix and determine and to vary the amount of working capital of the Corporation, to determine whether any and, if any, what dividends shall be declared and paid to the shareholders, to fix the date or dates for the payment of dividends, and to fix a time, not exceeding fifty (50) days preceding the date fixed for the payment of any dividend, as a date for the determination of shareholders entitled to receive payment of such dividend. When any dividend is paid or any other distribution is made, in whole or in part, from sources other than earned surplus, it shall be accompanied by a written notice (i) disclosing the amounts by which such dividend or distribution affects stated capital, surplus and earned surplus, or (ii) if such amounts are not determinable at the time of such notice, disclosing the approximate effect of such dividend or distribution as aforesaid and stating that such amounts are not yet determinable.

- 18 ARTICLE VIII. MISCELLANEOUS PROVISIONS SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall be the calendar year. SECTION 2. WAIVER OF NOTICE. Notice of meeting need not be given to any shareholder who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him. Notice of a meeting need not be given to any director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him. Whenever the Corporation or the Board of Directors or any committee thereof is authorized to take any action after notice to any person or persons or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of such period of time, if at any time before or after such action is completed the person or persons entitled to such notice or entitled to participate in the action to be taken or, in the case of a shareholder, by his attorney-in-fact, submit a signed waiver of notice of such requirements. SECTION 3. NOTICES. Whenever by the by-laws any written notice is required to be given to any shareholder, director or officer, the same may be given, unless otherwise required by law and except as hereinbefore otherwise expressly provided, by delivering it personally to him or by mailing or telegraphing it to him at his last known post office address. Where a notice is mailed or telegraphed, it shall be deemed to have been given at the time it is mailed or telegraphed. SECTION 4. EXAMINATION OF BOOKS. The Board of Directors shall, subject to the laws of the State of New York have power to determine from time to time, whether, to what extent, and under what conditions and regulations the accounts and books of the Corporation or any of them shall be open to the inspection of the shareholders, and no shareholder shall have any right to inspect any account book or document of the Corporation except as conferred by the laws of the State of New York unless and until authorized so to do by resolution of the Board of Directors or shareholders of the Corporation.

- 19 SECTION 5. GENDER. Words used in these by-laws importing the male gender shall be construed to include the female gender, wherever appropriate. ARTICLE IX. AMENDMENTS SECTION 1. AMENDMENT BY DIRECTORS. The Board of Directors shall have the power without the assent or vote of the shareholders to adopt by-laws, and except as hereinafter provided in Section 2 of this Article, and subject to such limitations as may be imposed by law, to rescind, alter, amend or repeal by a vote of a majority of the whole Board any of the by-laws, whether adopted by the Board or by the shareholders. SECTION 2. AMENDMENT BY SHAREHOLDERS. The shareholders shall have power to rescind, alter, amend or repeal any by-laws and to adopt by-laws which, if so expressed, may not be rescinded, altered, amended or repealed by the Board of Directors.

- 20 I, Gladys L. Cooper, Corporate Secretary of Central Hudson Gas & Electric Corporation, do hereby certify that the foregoing is a full, true and correct copy of the by-laws of said Corporation as in effect at the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand as Corporate Secretary of said Corporation and hereunto affixed its corporate seal this __th day of _____, ____.
/s/ GLADYS L. COOPER --------------------------------Corporate Secretary

Amended: April 27, 1999 Amended: December 15, 1999 Amended January 18, 2002

EXHIBIT (4)(ii)6

DISCHARGE, RELEASE AND CANCELLATION OF INDENTURE OF MORTGAGE Dated as of January 1, 1927 and the Twenty-eight Supplemental Indentures thereto from THE BANK OF NEW YORK (FORMERLY NAMED IRVING TRUST COMPANY) TRUSTEE, to CENTRAL HUDSON GAS & ELECTRIC CORPORATION Prepared by: Gould & Wilkie LLP One Chase Manhattan Plaza New York, New York 10005-1401

KNOW ALL MEN BY THESE PRESENTS, That: WHEREAS, CENTRAL HUDSON GAS & ELECTRIC CORPORATION, a corporation of the State of New York, hereinafter called the "Company", executed and delivered to IRVING TRUST COMPANY (now THE BANK OF NEW YORK), as Trustee ("Trustee"), a certain Indenture of Mortgage ("Original Mortgage"), dated as of January 1, 1927, as thereafter supplemented and amended by twenty-eight supplemental indentures thereto ("Supplemental Indentures") (as so supplemented and amended, hereinafter called the "Mortgage"), mortgaging and subjecting to the lien thereof certain property, as therein set forth, to secure the payment of bonds issuable under the Mortgage in series as therein provided; and WHEREAS, the Original Mortgage and said twenty-eight supplemental Indentures thereto were recorded with the offices of the County Clerks of the Counties of Albany, Columbia, Dutchess, Greene, Orange, Oswego (except as set forth in Exhibit A hereto), Putnam, Sullivan, Ulster and Westchester in the State of New York, and were filed with Uniform Commercial Code financing statements covering personal property and fixtures subject to the Mortgage with the office of the Secretary of State of the State of New York, as more particularly set forth in Exhibit A hereto; and WHEREAS, the Company executed and delivered, to the Trustee or successor trustee to wit: the Supplemental Indenture dated as of March 1, 1935, the Second Supplemental Indenture dated as of June 1, 1937, the Third Supplemental Indenture dated as of April 1, 1940, the Fourth Supplemental Indenture dated as of March 1, 1941, the Fifth Supplemental Indenture dated as of December 1, 1950, the Sixth Supplemental Indenture dated as of December 1, 1952, the Seventh Supplemental Indenture dated as of October 1, 1954, the Eighth Supplemental Indenture dated as of May 15, 1958, the Ninth Supplemental Indenture dated as of December 1, 1967, the Tenth Supplemental Indenture dated as of January 15, 1969, the Eleventh Supplemental Indenture dated as of June 1, 1970, the Twelfth Supplemental Indenture dated as of February 1, 1972, the Thirteenth Supplemental Indenture dated as of April 15, 1974, the Fourteenth Supplemental Indenture dated as of November 1, 1975, the Fifteenth 1

Supplemental Indenture dated as of June 1, 1977, the Sixteenth Supplemental Indenture dated as of September 15, 1979, the Seventeenth Supplemental Indenture dated as of May 15, 1980, the Eighteenth Supplemental Indenture dated as of November 15, 1980, the Nineteenth Supplemental Indenture dated as of August 15, 1981, the Twentieth Supplemental Indenture dated as of September 1, 1982, the Twenty-First Supplemental Indenture dated as of November 22, 1982, the Twenty-Second Supplemental Indenture dated as of May 24, 1984, the Twenty-Third Supplemental Indenture dated as of June 15, 1985, the Twenty-Fourth Supplemental Indenture dated as of September 1, 1986, the Twenty-Fifth Supplemental Indenture dated as of December 1, 1988, the Twenty-Sixth Supplemental Indenture dated as of May 1, 1991, the Twenty-Seventh Supplemental Indenture dated as of May 15, 1992 and the Twenty-Eighth Supplemental Indenture dated as of May 1, 1995; all of which were recorded with the offices of the Clerks of the above-referenced counties (except in Oswego County as set forth in Exhibit A hereto) in the State of New York; and WHEREAS, there are now issued and outstanding under the Mortgage the following tranches of the Company's Secured Medium-Term Notes, Series A:
PRINCIPAL $10,000,000 10,000,000 5,000,000 500,000 9,500,000 ----------$35,000,000 INTEREST RATE 8.12% 8.14% 7.97% 7.97% 6.46% STATED MATURITY 8/29/22 8/29/22 6/11/03 6/13/03 8/11/03

WHEREAS, Article XVI of the Mortgage provides for defeasance by the Company of the Mortgage; and WHEREAS, the Company has complied with the provisions of Article XVI of the Mortgage. 2

NOW, THEREFORE, THE BANK OF NEW YORK, as Trustee, as aforesaid, in consideration of the premises and pursuant to the authority vested in them as Trustee under the Mortgage, has released, remised and quitclaimed, and by these presents does release, remise and quitclaim, unto the Company, its successors and assigns, forever, all the estate, right, title and interest of said Trustee in and to any and all properties at any time subject to the lien of the Mortgage, of whatsoever kind or description, whether owned by the Company at the date of the Mortgage or thereafter acquired or owned by it, to have and to hold unto the Company=s own use, benefit and behoof forever, free, clear and discharged of and from any and all liens, mortgages, encumbrances and claims of any kind under and by virtue of the Mortgage. THE BANK OF NEW YORK, as Trustee, as aforesaid, hereby discharges the Mortgage, and the lien thereof, and grants a full and complete release, satisfaction, cancellation and discharge of the Mortgage, and all liens created thereby may be cancelled, erased, discharged satisfied and released of record, and does authorize and require any recording officer in whose office the Original Mortgage or any said Supplemental Indenture thereto shall have been recorded to cancel and erase from the records of his or her office the inscriptions of the Original Mortgage and any and all of the aforesaid First through Twenty-Eighth Supplemental Indentures thereto in the counties in which the Company owns property upon such records, and in particular the said Trustee does hereby authorize and require each of the Clerks of the above-referenced counties in the State of New York to cancel and erase from the mortgage records of their office the inscriptions of the Original Mortgage and any and all of said Supplemental Indentures thereto in their respective books and folios. The Bank of New York, as Trustee, as aforesaid, hereby consents to and authorizes the Company to file, on behalf of said Trustee, with the office of the Secretary of State of the State of New York an appropriate form or forms under the New York Uniform Commercial Code terminating the effectiveness of each financing statement filed with respect to the security interest of the Trustee under the Original Mortgage and said Supplemental Indentures. 3

The recitals contained in this instrument are not made by THE BANK OF NEW YORK, as Trustee, and said Trustee assumes no responsibility in respect thereof, and this instrument is made without warranty by and without recourse to said Trustee in any event whatsoever. This instrument may be executed in any number of multiple counterparts, and all said counterparts so executed, each as an original, shall constitute but one and the same instrument. IN WITNESS WHEREOF, THE BANK OF NEW YORK has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by one of its Assistant Vice Presidents, and its corporate seal to be attested by one of its Assistant Treasurers or one of its Assistant Secretaries, all in the City of New York, as of the 6th day of November, 2001. THE BANK OF NEW YORK, as Trustee
By: /s/ MICHAEL C. DALY -----------------------------------Name: Michael C. Daly Title: Assistant Vice President Attest: /s/ GEOVANNI BARRIS ----------------------------------------

Executed, sealed and delivered by THE BANK OF NEW YORK in the presence of:
/s/ MING J. SHIANG ----------------------------------------

/s/ KISHA A. HOLDER ----------------------------------------

4

STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On this 6th day of November, 2001, before me, the undersigned, personally appeared Michael C. Daly, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name (s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature on the instrument, the individual(s), or the person on behalf of which the individual(s) acted, executed the instrument.
/s/ WILLIAM J. CASSELS --------------------------------Notary Public

WILLIAM J. CASSELS Notary Public, State of New York No. 01CA5027729 Qualified in Bronx County Commission Expires May 16, 2002 [Seal] 1

EXHIBIT A RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ----------------------------------------ALBANY COUNTY BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/15/27 786 205 Supp. Indenture 7/22/35 911 241 2nd Supp. Indenture 9/20/37 926 380 3rd Supp. Indenture 6/5/40 956 459 4th Supp. Indenture 5/2/41 969 198 5th Supp. Indenture 12/18/50 1227 1 6th Supp. Indenture 12/18/52 1316 199 7th Supp. Indenture 11/3/54 1396 389 8th Supp. Indenture 5/29/58 1547 457 9th Supp. Indenture 1/4/68 1919 301 10th Supp. Indenture 1/23/69 1954 215 11th Supp. Indenture 6/10/70 1991 447 12th Supp. Indenture 2/17/72 2020 25 13th Supp. Indenture 4/24/74 2057 709 14th Supp. Indenture 11/13/75 2083 301 15th Supp. Indenture 6/9/77 2111 873 16th Supp. Indenture 9/27/79 2165 919 17th Supp. Indenture 5/22/80 2178 415 18th Supp. Indenture 12/3/80 2190 552 19th Supp. Indenture 8/26/81 2207 237 20th Supp. Indenture 9/30/82 2229 765

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ALBANY COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 2233 630 22nd Supp. Indenture 5/25/84 2293 63 23rd Supp. Indenture 7/1/85 2348 433 24th Supp. Indenture 9/4/86 2436 279 25th Supp. Indenture 12/14/88 2644 1005 26th Supp. Indenture 5/14/91 2824 108 27th Supp. Indenture 6/1/92 2934 226 28th Supp. Indenture 5/17/95 3309 184

2

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 COLUMBIA COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/15/27 131 404 Supp. Indenture 7/22/35 149 225 2nd Supp. Indenture 9/20/37 153 424 3rd Supp. Indenture 6/5/40 159 57 4th Supp. Indenture 5/2/41 161 260 5th Supp. Indenture 12/18/50 196 38 6th Supp. Indenture 12/18/52 206 518 7th Supp. Indenture 11/3/54 216 135 8th Supp. Indenture 5/29/58 238 64 9th Supp. Indenture 1/4/68 307 185 10th Supp. Indenture 1/23/69 315 227 11th Supp. Indenture 6/10/70 325 48 12th Supp. Indenture 2/17/72 338 693 13th Supp. Indenture 4/24/74 353 481 14th Supp. Indenture 11/13/75 363 122 15th Supp. Indenture 6/9/77 370 1125 16th Supp. Indenture 9/27/79 384 420 17th Supp. Indenture 5/22/80 387 1021 18th Supp. Indenture 12/3/80 390 827 19th Supp. Indenture 8/26/81 394 303 20th Supp. Indenture 9/30/82 399 655

1

EXHIBIT A --------(Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ----------------------------------------COLUMBIA COUNTY (Continued) BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 400 672 22nd Supp. Indenture 5/25/84 412 951 23rd Supp. Indenture 7/1/85 424 23 24th Supp. Indenture 9/4/86 441 9 25th Supp. Indenture 12/14/88 483 855 26th Supp. Indenture 5/14/91 600 33 27th Supp. Indenture 6/1/92 672 261 28th Supp. Indenture 5/17/95 981 46

2

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 DUTCHESS COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/15/27 355 1 Supp. Indenture 7/22/35 404 2 2nd Supp. Indenture 9/20/37 412 1 3rd Supp. Indenture 6/5/40 424 1 4th Supp. Indenture 5/2/41 429 202 5th Supp. Indenture 12/18/50 548 538 6th Supp. Indenture 12/17/52 593 300 7th Supp. Indenture 11/1/54 641 585 8th Supp. Indenture 5/29/58 739 288 9th Supp. Indenture 1/4/68 994 438 10th Supp. Indenture 1/23/69 1010 812 11th Supp. Indenture 6/10/70 1031 726 12th Supp. Indenture 2/17/72 1062 152 13th Supp. Indenture 4/24/74 1112 281 14th Supp. Indenture 11/13/75 1144 756 15th Supp. Indenture 6/9/77 1178 302 16th Supp. Indenture 9/27/79 1250 5 17th Supp. Indenture 5/22/80 1268 880 18th Supp. Indenture 12/3/80 1283 89 19th Supp. Indenture 8/26/81 1301 842 20th Supp. Indenture 9/30/82 1329 313

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 DUTCHESS COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 1334 295 22nd Supp. Indenture 5/25/84 1419 322 23rd Supp. Indenture 7/1/85 1492 650 24th Supp. Indenture 9/4/86 1600 573 25th Supp. Indenture 12/14/88 1865 829 26th Supp. Indenture 5/14/91 2053 540 27th Supp. Indenture 5/29/92 2105 50.0 28th Supp. Indenture 5/16/95 2236 103.0

2

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 GREENE COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/16/27 202 125 Supp. Indenture 7/22/35 223 520 2nd Supp. Indenture 9/20/37 229 71 3rd Supp. Indenture 6/5/40 233 476 4th Supp. Indenture 5/2/41 235 244 5th Supp. Indenture 12/18/50 271 75 6th Supp. Indenture 12/18/52 279 90 7th Supp. Indenture 11/3/54 287 478 8th Supp. Indenture 5/29/58 313 404 9th Supp. Indenture 1/4/68 372 942 10th Supp. Indenture 1/23/69 377 363 11th Supp. Indenture 6/10/70 382 779 12th Supp. Indenture 2/17/72 391 1032 13th Supp. Indenture 4/24/74 405 652 14th Supp. Indenture 11/13/75 412 982 15th Supp. Indenture 6/9/77 420 825 16th Supp. Indenture 9/27/79 433 1117 17th Supp. Indenture 5/22/80 436 832 18th Supp. Indenture 12/3/80 439 613 19th Supp. Indenture 8/26/81 442 476 20th Supp. Indenture 9/30/82 448 118

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 GREENE COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 451 222 22nd Supp. Indenture 5/25/84 485 90 23rd Supp. Indenture 7/1/85 522 93 24th Supp. Indenture 9/4/86 574 218 25th Supp. Indenture 12/14/88 709 329 26th Supp. Indenture 5/14/91 828 51 27th Supp. Indenture 6/1/92 884 158 28th Supp. Indenture 5/17/95 1050 159

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ORANGE COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/15/27 600 1 Supp. Indenture 7/22/35 682 26 2nd Supp. Indenture 9/20/37 702 111 3rd Supp. Indenture 6/5/40 744 238 4th Supp. Indenture 5/2/41 759 155 5th Supp. Indenture 12/18/50 1015 267 6th Supp. Indenture 12/18/52 1070 108 7th Supp. Indenture 11/3/54 1128 9 8th Supp. Indenture 5/29/58 1251 316 9th Supp. Indenture 1/5/68 1507 31 10th Supp. Indenture 1/23/69 1527 202 11th Supp. Indenture 6/10/70 1551 499 12th Supp. Indenture 2/17/72 1587 956 13th Supp. Indenture 4/24/74 1650 871 14th Supp. Indenture 11/13/75 1685 750 15th Supp. Indenture 6/9/77 1719 877 16th Supp. Indenture 9/27/79 1782 12 17th Supp. Indenture 5/22/80 1798 285 18th Supp. Indenture 12/3/80 1811 978 19th Supp. Indenture 8/26/81 1829 329 20th Supp. Indenture 9/30/82 1851 1019

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ORANGE COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 1856 556 22nd Supp. Indenture 5/25/84 1914 53 23rd Supp. Indenture 7/1/85 2045 221 24th Supp. Indenture 9/4/86 2373 307 25th Supp. Indenture 12/14/88 3280 145 26th Supp. Indenture 5/14/91 3987 11 27th Supp. Indenture 6/1/92 4301 210 28th Supp. Indenture 5/17/95 5411 1

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 OSWEGO COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 9/19/79 677 586 Supp. Indenture 2nd Supp. Indenture 3rd Supp. Indenture 4th Supp. Indenture 5th Supp. Indenture 6th Supp. Indenture 7th Supp. Indenture 8th Supp. Indenture 9th Supp. Indenture 10th Supp. Indenture 11th Supp. Indenture 12th Supp. Indenture 13th Supp. Indenture 14th Supp. Indenture 15th Supp. Indenture 16th Supp. Indenture 9/27/79 678 408 17th Supp. Indenture 5/22/80 682 611 18th Supp. Indenture 12/3/80 686 225 19th Supp. Indenture 8/26/81 694 38 20th Supp. Indenture 9/30/82 717 269

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 OSWEGO COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/24/82 722 62 22nd Supp. Indenture 5/29/84 778 263 23rd Supp. Indenture 7/1/85 828 10 24th Supp. Indenture 9/4/86 897 92 25th Supp. Indenture 12/14/88 1069 343 26th Supp. Indenture 5/14/91 1243 144 27th Supp. Indenture 6/1/92 1338 080 28th Supp. Indenture 5/17/95 1658 147

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 PUTNAM COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/15/27 93 320 Supp. Indenture 7/22/35 118 453 2nd Supp. Indenture 9/20/37 124 127 3rd Supp. Indenture 6/5/40 131 174 4th Supp. Indenture 5/2/41 134 323 5th Supp. Indenture 12/18/50 186 8 6th Supp. Indenture 12/18/52 202 250 7th Supp. Indenture 11/1/54 219 295 8th Supp. Indenture 5/29/58 254 269 9th Supp. Indenture 1/9/68 388 339 10th Supp. Indenture 1/23/69 398 1008 11th Supp. Indenture 6/10/70 408 790 12th Supp. Indenture 2/17/72 422 208 13th Supp. Indenture 4/24/74 441 1128 14th Supp. Indenture 11/13/75 454 902 15th Supp. Indenture 6/9/77 467 301 16th Supp. Indenture 9/27/79 493 745 17th Supp. Indenture 5/22/80 500 613 18th Supp. Indenture 12/3/80 505 227 19th Supp. Indenture 8/26/81 511 981 20th Supp. Indenture 9/30/82 520 1049

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 PUTNAM COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 522 437 22nd Supp. Indenture 5/25/84 580 301 23rd Supp. Indenture 7/1/85 669 001 24th Supp. Indenture 9/4/86 804 85 25th Supp. Indenture 12/14/88 1146 166 26th Supp. Indenture 5/14/91 1390 69 27th Supp. Indenture 6/1/92 1520 278 28th Supp. Indenture 5/17/95 2062 166

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 SULLIVAN COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage Supp. Indenture 7/22/35 275 54 2nd Supp. Indenture 9/20/37 288 6 3rd Supp. Indenture 6/5/40 306 477 4th Supp. Indenture 5/2/41 312 391 5th Supp. Indenture 12/18/50 410 161 6th Supp. Indenture 12/18/52 444 183 7th Supp. Indenture 11/3/54 484 21 8th Supp. Indenture 5/29/58 551 275 9th Supp. Indenture 1/5/68 735 667 10th Supp. Indenture 1/23/69 744 402 11th Supp. Indenture 6/10/70 755 1089 12th Supp. Indenture 2/17/72 775 228 13th Supp. Indenture 4/24/74 806 375 14th Supp. Indenture 11/13/75 825 1004 15th Supp. Indenture 6/9/77 873 23 16th Supp. Indenture 9/27/79 947 58 17th Supp. Indenture 5/22/80 965 1 18th Supp. Indenture 12/3/80 982 199 19th Supp. Indenture 8/26/81 1003 30 20th Supp. Indenture 9/30/82 1035 304

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 SULLIVAN COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 1040 238 22nd Supp. Indenture 5/25/84 1096 184 23rd Supp. Indenture 7/1/85 1148 36 24th Supp. Indenture 9/4/86 1220 198 25th Supp. Indenture 12/14/88 1396 675 26th Supp. Indenture 5/14/91 1522 153 27th Supp. Indenture 6/1/92 1591 133 28th Supp. Indenture 5/17/95 1807 380

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ULSTER COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 2/16/27 371 75 1st Supp. Indenture 7/22/35 419 495 2nd Supp. Indenture 9/20/37 430 558 3rd Supp. Indenture 6/5/40 446 129 4th Supp. Indenture 5/2/41 452 2 5th Supp. Indenture 12/18/50 606 46 6th Supp. Indenture 12/18/52 657 283 7th Supp. Indenture 11/3/54 709 251 8th Supp. Indenture 5/29/58 825 248 9th Supp. Indenture 1/4/68 983 478 10th Supp. Indenture 1/23/69 996 824 11th Supp. Indenture 6/10/70 1011 1155 12th Supp. Indenture 2/17/72 1035 614 13th Supp. Indenture 4/24/74 1072 355 14th Supp. Indenture 11/13/75 1096 375 15th Supp. Indenture 6/9/77 1118 1129 16th Supp. Indenture 9/27/79 1156 305 17th Supp. Indenture 5/22/80 1166 369 18th Supp. Indenture 12/3/80 1175 281 19th Supp. Indenture 8/26/81 1186 19 20th Supp. Indenture 9/30/82 1202 1135

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 ULSTER COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 1205 1118 22nd Supp. Indenture 5/25/84 1248 1 23rd Supp. Indenture 7/1/85 1282 1006 24th Supp. Indenture 9/4/86 1452 81 25th Supp. Indenture 12/14/88 1922 232 26th Supp. Indenture 5/14/91 2322 183 27th Supp. Indenture 6/1/92 2524 129 28th Supp. Indenture 5/17/95 3197 170

2

EXHIBIT A (CONTINUED) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 WESTCHESTER COUNTY
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------Original Mortgage 1/12/68 46 1 Supp. Indenture 1/12/68 46 124 2nd Supp. Indenture 1/12/68 46 158 3rd Supp. Indenture 1/12/68 46 188 4th Supp. Indenture 1/12/68 46 266 5th Supp. Indenture 1/12/68 46 428 6th Supp. Indenture 1/12/68 46 504 7th Supp. Indenture 1/12/68 46 530 8th Supp. Indenture 1/12/68 46 558 9th Supp. Indenture 1/12/68 46 601 10th Supp. Indenture 1/23/69 47 139 11th Supp. Indenture 6/10/70 7295 100 12th Supp. Indenture 2/17/72 7414 449 13th Supp. Indenture 4/24/74 7589 1 14th Supp. Indenture 11/13/75 7704 644 15th Supp. Indenture 6/9/77 7823 239 16th Supp. Indenture 9/27/79 8095 631 17th Supp. Indenture 5/22/80 8158 710 18th Supp. Indenture 12/3/80 54 735 19th Supp. Indenture 8/26/81 8277 158 20th Supp. Indenture 9/30/82 8378 439

1

EXHIBIT A (Continued) RECORDATION INFORMATION FOR INDENTURE OF MORTGAGE OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION DATED AS OF JANUARY 1, 1927 WESTCHESTER COUNTY (Continued)
BOOK OF PAGE DOCUMENT DATE FILED MORTGAGES NUMBER -------------------------------------------------------------------------------21st Supp. Indenture 11/23/82 8395 712 22nd Supp. Indenture 5/29/84 8713 323 23rd Supp. Indenture 7/1/85 9191 156 24th Supp. Indenture 9/4/86 10231 35 25th Supp. Indenture 12/14/88 12810 237 26th Supp. Indenture 5/14/91 14546 140 27th Supp. Indenture 6/1/92 15829 83 28th Supp. Indenture 5/18/95 20563 31

2

EXHIBIT (10)(i)69 STOCK PURCHASE AGREEMENT BY AND BETWEEN WPS POWER DEVELOPMENT, INC., A WISCONSIN CORPORATION, AS THE BUYER, AND CENTRAL HUDSON ENERGY SERVICES, INC. A NEW YORK CORPORATION, AS THE STOCKHOLDER DECEMBER 21, 2001

TABLE OF CONTENTS PAGES 1. DEFINITIONS.1 2. SALE AND PURCHASE OF SHARES..............................................1
2.01 Sale and Purchase of Shares.....................................1 2.02 Purchase Price..................................................1 2.03 Purchase Price Adjustment.......................................2 ADDITIONAL UNDERTAKINGS AND COVENANTS....................................3 3.01 Consents and Approvals..........................................3 3.02 Access; Investigations by the Buyer.............................3 3.03 Operation of Business of the Company............................4 3.04 Public Announcements............................................5 3.05 Employees.......................................................5 3.06 Subsequent Events...............................................6 3.07 Access to Records...............................................6 3.08 Intercompany Accounts...........................................6 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER........................6 4.01 Organization and Standing.......................................6 4.02 Subsidiaries....................................................7 4.03 Articles of Incorporation and Bylaws............................7 4.04 Capitalization..................................................7 4.05 Directors, Officers and Employees...............................8 4.06 Financial Statements............................................8 4.07 No Liabilities..................................................9 4.08 Accounts Receivable.............................................9 4.09 Taxes...........................................................9 4.10 Conduct of Business; Absence of Material Adverse Effect........11 4.11 Real Property..................................................12 4.12 Assets.........................................................12 4.13 Insurance......................................................13 4.14 Intellectual Property..........................................13 4.15 Debt Instruments...............................................14 4.16 Leases.........................................................14 4.17 Other Agreements...............................................15 4.18 Books and Records..............................................16 4.19 Litigation; Disputes...........................................16 4.20 Labor Relations................................................16 4.21 Benefit Plans..................................................17 4.22 Environmental..................................................19 4.23 Transactions with Related Parties..............................20 4.24 Restrictions and Consents......................................21 4.25 Authorization..................................................21 4.26 Legal Compliance...............................................22

3.

4.

5.

4.27 Binding Obligation.............................................22 4.28 Title to Capital Stock.........................................22 4.29 Authority and Capacity.........................................22 4.30 Absence of Violation...........................................23 4.31 Transfer of Title..............................................23 4.32 Holding Company Act and EWG Status.............................23 4.33 Market-Based Rates.............................................23 4.34 NYISO..........................................................23 4.35 Generating Facilities Information..............................24 4.36 Emissions Allowances...........................................24 REPRESENTATIONS AND WARRANTIES OF THE BUYER.............................24 5.01 Organization and Standing......................................24 5.02 Authorization..................................................24 5.03 Binding Obligation.............................................24 5.04 No Registration Under the Securities Act.......................25 5.05 Acquisition for Investment.....................................25 5.06 Evaluation of Merits and Risks of Investment...................25 5.07 Consents.......................................................25

6. COVENANTS OF THE BUYER..................................................26 6.01 Maintenance of Plans...........................................26 6.02 Environmental Liabilities and Site Assessments.................26 7. COVENANTS OF THE STOCKHOLDER............................................26
7.01 Severance......................................................26 7.02 Environmental Matters..........................................27 7.03 Closing Period Operations......................................27 7.04 Transition Services............................................27 7.05 Employees......................................................28 7.06 Voltage Support Service........................................28 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER..................28 8.01 Representations and Warranties.................................28 8.02 Performance....................................................29 8.03 Buyer's Certificate............................................29 8.04 Documents at Closing...........................................29 8.05 Legal Opinion..................................................29 8.06 Consents and Approvals.........................................29 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER........................29 9.01 Representations and Warranties.................................29 9.02 Performance....................................................30 9.03 Absence of Adverse Changes.....................................30 9.04 Legal Proceedings..............................................30 9.05 Documents at Closing...........................................30 9.06 Officer Certificate............................................30 9.07 Consents.......................................................30 9.08 Resignation of Directors.......................................30

8.

9.

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10.

11.

12.

9.09 Legal Opinion..................................................31 9.10 Consents and Approvals.........................................31 9.11 FIRPTA Statement...............................................31 9.12 Real Estate....................................................31 9.13 Reliance Letter................................................31 9.14 Insurance......................................................32 CLOSING ................................................................32 10.01 Closing of Sale and Purchase...................................32 10.02 Deliveries by the Stockholder..................................32 10.03 Deliveries by the Buyer........................................34 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES..................34 11.01 Survival of Representations....................................34 11.02 Agreement of Stockholder to Indemnify..........................35 11.03 Agreement of the Buyer to Indemnify............................36 11.04 Shared Environmental Costs.....................................36 11.05 Conditions of Indemnification..................................36 11.06 Remedies Cumulative............................................38 TAX MATTERS ............................................................38 12.01 Section 338(h)(10) Election....................................38 12.02 Allocation of Purchase Price...................................38 12.03 Tax Returns and Payments.......................................39 12.04 Cooperation on Tax Matters.....................................40 12.05 Certain Taxes..................................................40 12.06 Tax Sharing Agreements.........................................41 12.07 Contests.......................................................41 12.08 Disputes.......................................................42

13. TERMINATION ............................................................42 13.01 Termination....................................................42 13.02 Effect of Termination..........................................43 14. MISCELLANEOUS...........................................................43
14.01 14.02 14.03 14.04 14.05 14.06 14.07 14.08 14.09 14.10 14.11 14.12 14.13 14.14 Additional Actions and Documents...............................43 Brokers........................................................43 Expenses.......................................................44 Assignment.....................................................44 Entire Agreement; Amendment....................................44 Waiver.........................................................45 Consent to Jurisdiction........................................45 Severability...................................................45 Governing Law..................................................45 Notices........................................................46 Headings.......................................................47 Execution in Counterparts......................................47 Limitation on Benefits.........................................47 Binding Effect.................................................48

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EXHIBITS EXHIBIT A - Definitions EXHIBIT B - Guaranty of Stockholder Guarantor

LIST OF SCHEDULES COMPRISING DISCLOSURE SCHEDULE
--------------------------------SCHEDULE: --------------------------------2.03(a) --------------------------------3.01(b) --------------------------------3.03(b)(xii) --------------------------------4.02 --------------------------------4.03 --------------------------------4.04(b) --------------------------------4.05 --------------------------------4.06 --------------------------------4.07 --------------------------------4.08 --------------------------------4.09(a), (c), (e), (f) --------------------------------4.10(a), (d) --------------------------------4.11(a), (b) --------------------------------4.12(a), (c) --------------------------------4.13 --------------------------------4.14 --------------------------------4.15 --------------------------------4.16 --------------------------------4.17(a), (b), (c) --------------------------------4.18 --------------------------------4.19(a), (b) --------------------------------4.20 --------------------------------4.21(a), (f), (h) --------------------------------4.22(a), (b), (c), (f) --------------------------------4.23 (a), (b) --------------------------------4.24 (a), (b), (c) --------------------------------4.25 --------------------------------4.30 --------------------------------4.35 --------------------------------5.02 --------------------------------5.07 --------------------------------7.02 --------------------------------14.02(a) ---------------------------------------------TITLE: ---------------------------------------------Purchase Price Adjustment ---------------------------------------------Consents and Approvals ---------------------------------------------Operation of Business of the Company ---------------------------------------------Subsidiaries ---------------------------------------------Certificates of Incorporation and Bylaws ---------------------------------------------Capitalization ---------------------------------------------Directors, Officers and Employees ---------------------------------------------Financial Statements ---------------------------------------------No Liabilities ---------------------------------------------Accounts Receivable ---------------------------------------------Taxes ---------------------------------------------Conduct of Business; Absence of Material Adverse Changes ---------------------------------------------Real Property ---------------------------------------------Assets ---------------------------------------------Insurance ---------------------------------------------Intellectual Property ---------------------------------------------Debt Instruments ---------------------------------------------Leases ---------------------------------------------Other Agreements ---------------------------------------------Books and Records ---------------------------------------------Litigation; Disputes ---------------------------------------------Labor Relations ---------------------------------------------Pension and Benefit Plans ---------------------------------------------Environmental ---------------------------------------------Transactions with Related Parties ---------------------------------------------Restrictions and Consents ---------------------------------------------Authorizations ---------------------------------------------Absence of Violation ---------------------------------------------Generating Facility Information ---------------------------------------------Authorization ---------------------------------------------Consents ---------------------------------------------Environmental Matters ---------------------------------------------Brokers

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

STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (this "PURCHASE AGREEMENT") is entered into as of December 21, 2001, by and between WPS POWER DEVELOPMENT, INC., a Wisconsin corporation (the "BUYER") and CENTRAL HUDSON ENERGY SERVICES, INC., a New York corporation (the "STOCKHOLDER"). WHEREAS, the Stockholder owns all of the issued and outstanding shares of capital stock (collectively, the "SHARES") of CH Resources, Inc., a New York corporation (the "COMPANY"); and WHEREAS, the Stockholder desires to sell and the Buyer desires to purchase, all of the Shares at the price and upon the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows: 1. DEFINITIONS For all purposes of this Purchase Agreement, certain capitalized terms specified in EXHIBIT A shall have the meanings in this Purchase Agreement as are ascribed to them in EXHIBIT A, except as otherwise expressly provided in this Purchase Agreement. 2. SALE AND PURCHASE OF SHARES 2.01 SALE AND PURCHASE OF SHARES On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, the Stockholder agrees to sell to the Buyer, and the Buyer agrees to purchase from the Stockholder, all of the Shares owned by the Stockholder for the purchase price specified in SECTION 2.02. 2.02 PURCHASE PRICE The aggregate purchase price for all of the Shares shall be Fifty-Seven Million One Hundred Fifty Thousand Dollars $57,150,000 (the "PURCHASE PRICE") payable to the Stockholder on the Closing Date by wire transfer of immediately available funds in accordance with written instructions of the Stockholder provided to the Buyer at least one (1) business day prior to the Closing Date.

2.03 PURCHASE PRICE ADJUSTMENT (a) The Purchase Price will be adjusted following Closing to compensate for (i) any excess or deficiency as of the Closing Date with respect to (A) the amount reflected on the September 30, 2001 unaudited consolidated balance sheet of the Company for current assets (less the amount of $1,664,400 attributable to the current portion of the Transmission Congestion Contracts ("TCCS") as of September 30, 2001) less current liabilities (except for the items treated separately in clause (B) below) and (B) except as set forth in this Section 2.03(a), the book value of fuels, materials, supplies, and inventories on site at Closing; (ii) the capital expenditures set forth in the Disclosure Schedule; (iii) additional capital expenditures not exceeding $150,000 in the aggregate, and such further additional capital expenditures in excess of $150,000 as shall be approved in writing by the Buyer; and (iv) any increase or reduction in the Purchase Price as determined pursuant to the Closing Date Purchase Price Adjustment set forth in Schedule 2.03(a). The Buyer shall be responsible (as an addition to the Purchase Price) for the foregoing capital expenditures, but only to the extent money has been expended or a liability has been incurred by the Company during the period from September 30, 2001 to the Closing Date. For purposes of this Section 2.03(a), inventory value subject to adjustment includes (i) fuel and inventory of $1,166,427 as of September 30, 2001, and (ii) GP Mate inventory of $1,563,907 as of November 21, 2001, and excludes the Siemens spare parts inventory as set forth in the Disclosure Schedule, as to which no adjustment shall be made. (b) Stockholder shall provide a preliminary statement of Purchase Price adjustments at least thirty (30) days prior to the Closing Date. Stockholder shall provide a final statement of Purchase Price adjustments (the "ADJUSTMENT STATEMENT") to Buyer within five (5) business days following the Closing Date. (c) The values or amounts for each item reflected on the Adjustment Statement shall be binding upon the Buyer, unless the Buyer gives written notice within thirty (30) days after receipt thereof, of disagreement with any of the values or amounts shown on the Adjustment Statement, specifying as to each such item in reasonable detail, the nature and extent of such disagreement (the "DISPUTE NOTICE"). Buyer shall have the right to verify quantities of fuel and inventory based upon a random sampling methodology to be agreed between Stockholder and Buyer. If the Buyer and the Stockholder are unable to resolve any such disagreement within thirty (30) days after the date of the Dispute Notice, then the issues in dispute will be submitted to the Independent Accounting Firm, for resolution. If the issues in dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party (or its independent public accountants) and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as set forth in a notice delivered to both parties by the Accountants, will be binding and conclusive on the parties; and (iii) the Buyer and the Stockholder will each bear 50% of the fees of the Accountants for such determination. If as a result of the resolution of any disputes pursuant to this Section 2.03, any amount shown in the -2-

Adjustment Statement is determined to be erroneous, such erroneous amount shall be deleted from the Adjustment Statement and the correct amount shall be inserted in lieu thereof. (d) Immediately upon the expiration of the thirty (30) day period for giving the Dispute Notice, if a Dispute Notice is not given, or within five (5) business days after the determination has been completed in accordance with this Section 2.03, (i) the Buyer shall pay to Stockholder the amount of any upward Purchase Price adjustment or, (ii) Stockholder shall pay to the Buyer the amount of any downward Purchase Price adjustment. 3. ADDITIONAL UNDERTAKINGS AND COVENANTS 3.01 CONSENTS AND APPROVALS (a) The Buyer and the Stockholder shall use their respective best efforts to take all measures reasonably necessary or advisable to secure such consents, authorizations and approvals of Governmental Authorities and of private persons or entities with respect to the transactions contemplated by this Purchase Agreement, and the performance of all other obligations of such parties hereunder, as may be required by any applicable Laws or by any Agreement to which the Buyer or the Stockholder is a party or by which the Buyer or the Stockholder is bound including those set forth in the Disclosure Schedule pursuant to Sections 4.24 and 5.07 hereof. (b) The Buyer and the Stockholder shall (i) cooperate in the filing of all forms, notifications, reports and information, if any, required pursuant to applicable statutes, rules, regulations or orders of any Governmental Authority in connection with the transactions contemplated by this Purchase Agreement and in any event, each of them shall have made all such filings set forth in Disclosure Schedule 3.01(b), whether jointly or severally, not later than January 31, 2002, and (ii) use their respective best efforts to cause any applicable waiting periods thereunder to expire and any objections to the transactions contemplated hereby to be withdrawn before the Closing. 3.02 ACCESS; INVESTIGATIONS BY THE BUYER At all times through the Closing Date, the Stockholder shall, upon reasonable prior notice and during normal business hours, provide to representatives of the Buyer access to the Generating Facilities and the offices, books, Agreements, records (including, without limitation, tax returns and correspondence with accountants), officers, directors and employees of the Company and the Real Property Affiliates (provided such access shall not cause any unreasonable disruption in the conduct of the Company's business), and will furnish representatives of the Buyer such financial and operating data and other information with respect to the business and Assets of the Company as the Buyer may reasonably request, including, without limitation, Agreements with clients, customers, vendors, lessors, licensors and suppliers of the Company and the Real Property Affiliates. The Buyer agrees at all times through the Closing Date to (i) keep confidential all such information that is identified by the Stockholder as being of a confidential nature, (ii) not use such confidential information on its own behalf, except -3-

in connection with the transactions contemplated hereby, or on behalf of any other person, firm or entity, and (iii) not disclose such confidential information to any third party (other than to the Buyer's counsel, accountants and other consultants in connection with the transactions contemplated hereby) without the Stockholder's advance written authorization; PROVIDED, HOWEVER, that the Buyer shall have no such obligations with respect to confidential information that (A) was lawfully obtained by it not subject to restrictions of confidentiality; (B) is a matter of public knowledge; or (C) has been or is hereafter publicly disclosed other than by or through the Buyer. In the event this Purchase Agreement is terminated, the Buyer will return to the Stockholder or destroy, as the Stockholder may direct, all documents, workpapers and other materials containing or developed with confidential information furnished to the Buyer relating to the transactions contemplated hereunder whether obtained before or after the execution of this Purchase Agreement. 3.03 OPERATION OF BUSINESS OF THE COMPANY (a) At all times through the Closing Date, the Stockholder shall cause each of the Company and the Real Property Affiliates to use its reasonable best efforts to (i) preserve its business organization and its present relationships with customers, suppliers, consultants, employees and any other persons having business relations with the Company in the Ordinary Course of Business; and (ii) maintain all of its Assets in good operating condition and repair (normal wear and tear excepted) in the Ordinary Course of Business. (b) Except as set forth in the Disclosure Schedule, at all times through the Closing Date, the Stockholder shall cause each of the Company and the Real Property Affiliates to conduct its respective business substantially in the manner heretofore conducted and only in the Ordinary Course of Business and shall not, without the prior written consent of the Buyer: (i) issue any capital stock, bonds or other corporate securities or debt instruments, grant any options, warrants or other rights calling for the issuance thereof, or borrow any funds; (ii) declare, set aside or pay any dividends or distributions of any Assets; (iii) directly or indirectly redeem, purchase or otherwise acquire any of its capital stock, any securities convertible into capital stock, or any other securities; (iv) effect a split, reclassification or other change in or of any of its capital stock; (v) amend its certificate of incorporation or bylaws; (vi) except in furtherance of Stockholder's undertaking in Section 3.05, grant any increase in the compensation or benefits payable, or to become payable, by the Company to any of its directors, officers, employees or consultants, or make any accrual or arrangement for or payment of bonuses or special compensation of any kind to any director, officer or employee; (vii) directly or indirectly guarantee or agree to guarantee the obligations of others; (viii) enter into or make or permit any amendment or termination of any Agreement which the Stockholder reasonably believes is likely to have a Material Adverse Effect; (ix) mortgage, pledge or subject to any Encumbrance any of its Assets; (x) except with respect to debt owing from Affiliates of the Stockholder, cancel any indebtedness owing to the Company or the Real Property Affiliates or any claims which the Company or the Real Property Affiliates may possess (other than the resolution of claims under any Agreement in the Ordinary Course of Business which would not have a Material Adverse Effect), or waive any rights of substantial value; (xi) sell, assign or transfer any Intellectual Property; (xii) except for the TCCs, sell, exchange, transfer or otherwise -4-

dispose of any interest in any Asset (other than in the Ordinary Course of Business); (xiii) violate any Laws which have or could reasonably be expected to have a Material Adverse Effect; (xiv) commit any act or omit to do any act, or engage in any activity or transaction or incur any obligation (by conduct or otherwise), which the Stockholder reasonably expects to have a Material Adverse Effect; or (xv) make any loan or advance to any stockholder, officer or director of the Company or any other person, other than payment of inter-company indebtedness owed to Affiliates of the Company. Prior to the Closing Date, the Stockholder on behalf of the Company (i) will not do or agree to do any of the things listed in clauses (b) through (s) of SECTION 4.10 and (ii) will maintain all insurance, which shall meet the requirements of SECTION 4.13. (c) The Stockholder shall notify the Buyer promptly of any material adverse change in the business, operations, prospects, condition (financial or otherwise), Assets or liabilities of the Company or the Real Property Affiliates, including, without limitation, information (including, without limitation, copies of all Documents relating thereto) concerning all claims instituted, threatened or asserted against or affecting any of the Company or the Real Property Affiliates or its respective business or Assets at law or in equity, before or by any court or Governmental Authority. (d) The Stockholder shall cause the Company and the Real Property Affiliates to keep proper books of record and account in which true and complete entries will be made of all transactions in accordance with generally accepted accounting principles applied on a basis consistent with prior periods, and shall supply to the Buyer such Documents (financial or otherwise) with respect thereto as the Buyer shall reasonably request. 3.04 PUBLIC ANNOUNCEMENTS The Stockholder on the one hand, and the Buyer on the other hand, agree that neither they nor the Company nor their respective Affiliates will issue any press release or otherwise make any public statements concerning this Purchase Agreement or the transactions contemplated hereby at any time prior to the Closing Date without the prior written consent of the Buyer or the Stockholder, as the case may be, which consent may not be unreasonably withheld, PROVIDED that the Buyer, the Stockholder or their respective Affiliates may announce the execution of this Purchase Agreement and the transactions contemplated hereby on or after the date hereof. 3.05 EMPLOYEES The Stockholder shall use its reasonable best efforts to encourage the current employees of the Company to continue their employment with the Company prior to and following the Closing Date; PROVIDED, HOWEVER, that the Stockholder shall not be deemed to guarantee the continued employment of any of the Company's employees. -5-

3.06 SUBSEQUENT EVENTS The Stockholder shall notify the Buyer promptly in writing of the occurrence of any event, or the failure of any event to occur, prior to the Closing that results in a material omission from, or material breach of, any of the covenants, representations or warranties made by or on behalf of the Company or the Stockholder in this Purchase Agreement or the Disclosure Schedule. Prior to the Closing, the Stockholder promptly will supplement or amend the Disclosure Schedule delivered pursuant hereto with respect to any material matter hereafter arising which, if existing, occurring or known at the date of this Agreement, would have been required to be set forth or described in such Disclosure Schedule or which is necessary to correct any information in such Disclosure Schedule which has been rendered materially inaccurate thereby. 3.07 ACCESS TO RECORDS For a period of five (5) years after the Closing Date, the Buyer shall, upon reasonable prior notice and during normal business hours, provide to the Stockholder access to the financial and accounting books and records of the Company for periods prior to the Closing Date and which are in the Company's possession as of Closing, solely for purposes of assisting the Stockholder in connection with any tax audit or other governmental investigation of the Stockholder relating to the business of the Company for the period prior to Closing or for purposes of defending or investigating any Losses for which indemnification is sought by the Buyer pursuant to SECTION 11.02 hereof; PROVIDED, HOWEVER, such access shall not cause any unreasonable disruption in the conduct of the Buyer's business. The Buyer shall not dispose of such books and records during the five (5) year period after the Closing Date. 3.08 INTERCOMPANY ACCOUNTS The Stockholder shall cause all liabilities and obligations of the Company or the Real Property Affiliates to the Stockholder or any of its Affiliates to be paid or otherwise settled on or prior to the Closing. 4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER The Stockholder represents and warrants to the Buyer as follows: 4.01 ORGANIZATION AND STANDING The Stockholder, the Company and each of the Real Property Affiliates is a corporation duly organized and validly existing under the laws of the State of New York, and has the corporate power and authority to own, operate and lease its Assets, and to carry on its respective business as currently conducted. -6-

4.02 SUBSIDIARIES Except for the Real Property Affiliates, the Company has no Subsidiaries and, except as set forth in the Disclosure Schedule or the Financial Statements, no equity investment or other interest in, nor has the Company made advances or loans to, any corporation, association, partnership, joint venture or other entity or person. The Real Property Affiliates have no Subsidiaries and, except as set forth in the Disclosure Schedule, no equity investment or other interest in, nor have the Real Property Affiliates made advances or loans to, any corporation, association, partnership, joint venture or other entity or person. Except as set forth on the Disclosure Statement, neither the Company nor any Real Property Affiliate is subject to any obligation, or requirement to provide funds or to make any investment (in the form of loan, capital contributions, guaranty or otherwise) to or in any person or entity. 4.03 ARTICLES OF INCORPORATION AND BYLAWS The Stockholder has furnished to the Buyer a true and complete copy of the certificate of incorporation of each of the Stockholder, the Company and the Real Property Affiliates, as currently in effect, certified as of a recent date by the Secretary of State of the State of New York, and a true and complete copy of the bylaws of each of the Stockholder, the Company and the Real Property Affiliates, as currently in effect, certified by each such company's corporate secretary. Such certified copies are attached as exhibits to, and part of, the Disclosure Schedule. 4.04 CAPITALIZATION (a) The authorized capital stock of the Company consists of one million (1,000,000) shares of capital stock, with a par value of one dollar ($1.00) per share, of which five hundred sixty-six thousand (566,000) shares are duly authorized and validly issued and outstanding, fully paid and non-assessable and not subject to preemptive rights. All of the issued and outstanding shares of capital stock of the Company are beneficially and of record owned by the Stockholder, free and clear of all Encumbrances, except such restrictions on the transfer of such shares as may be applicable under federal and state securities laws. The Shares constitute all of the issued and outstanding shares of capital stock of the Company as of the Closing Date. (b) No shares of capital stock of the Company have been reserved for any purpose. There are no outstanding securities convertible into or exchangeable for capital stock of the Company and no outstanding options, rights (preemptive or otherwise), or warrants to purchase or to subscribe for any shares of such stock or other securities of the Company. Except as set forth in the Disclosure Schedule, there are no outstanding Agreements affecting or relating to the voting, issuance, purchase, redemption, repurchase or transfer of the Company's capital stock or any other securities of the Company. (c) The authorized capital of each of the real Property Affiliates consists of one hundred (100) shares of capital stock, with a par value of $0.10 per share, of which ten (10) shares are duly authorized and validly issued and outstanding, fully paid and non-assessable and -7-

not subject to preemptive rights. All of the issued and outstanding shares of capital stock of each of the Real Property Affiliates are beneficially and of record owned by the Company, free and clear of all Encumbrances, except such restrictions on the transfer of such shares as may be applicable under federal and state securities laws. Such shares constitute all of the issued and outstanding shares of capital stock of each of the Real Property Affiliates as of the Closing Date. (d) No shares of capital stock of the Real Property Affiliates have been reserved for any purpose. There are no outstanding securities convertible into or exchangeable for capital stock of the Real Property Affiliates and no outstanding options, rights (preemptive or otherwise), or warrants to purchase or to subscribe for any shares of such stock or other securities of the Real Property Affiliates. Except as set forth in the Disclosure Schedule, there are no outstanding Agreements affecting or relating to the voting, issuance, purchase, redemption, repurchase or transfer of the Real Property Affiliates' capital stock or any other securities of the Real Capital Affiliates. 4.05 DIRECTORS, OFFICERS AND EMPLOYEES The Disclosure Schedule lists all current directors, officers and employees of the Company and each of the Real Property Affiliates, showing each such person's name, position, and annual remuneration, bonuses (except bonuses no portion of which is accrued and payable for the current fiscal year) and fringe benefits for the current fiscal year and the most recently completed fiscal year. 4.06 FINANCIAL STATEMENTS The Company has prepared and furnished to the Buyer (a) the unaudited consolidated balance sheet of the Company and the Real Property Affiliates as of the Balance Sheet Date and the unaudited consolidated income statement and statements of cash flow of the Company and the Real Property Affiliates for the nine (9) months ended on the Balance Sheet Date, and (b) the unaudited consolidated balance sheet as of December 31, 2000 and unaudited consolidated statements of income, stockholder's equity and cash flows for the twelve (12) month period ended as of December 31, 2000 (such financial statements, including the notes thereto, collectively, the "FINANCIAL STATEMENTS"). All of the Financial Statements, including, without limitation, the notes thereto: (i) have been prepared from the books and records of the Company and the Real Property Affiliates, (ii) present fairly the financial position of the Company and the Real Property Affiliates as of the respective dates and the results of operations and cash flows for the respective periods indicated, and (iii) have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with prior accounting periods (subject to normal audit adjustments in the case of unaudited statements). The Disclosure Schedule sets forth all changes in accounting methods (for financial accounting purposes) at any time made, agreed to, requested or required with respect to the Company or the Real Property Affiliates for any of the periods covered by the Financial Statements. -8-

4.07 NO LIABILITIES Except as reflected in the Financial Statements (or disclosed in the associated footnotes to the Financial Statements) or as described in the Disclosure Schedule, there exist no material liabilities individually or in the aggregate (whether contingent or absolute, matured or unmatured, known or unknown) of the Company or the Real Property Affiliates. Except as described in the Disclosure Schedule or the Unaudited Financial Statements, since the Balance Sheet Date, neither the Company nor the Real Property Affiliates has incurred any material liabilities (whether contingent or absolute, matured or unmatured, known or unknown) other than in the Ordinary Course of Business. 4.08 ACCOUNTS RECEIVABLE Except as set forth in the Disclosure Schedule, the accounts receivable of the Company and the Real Property Affiliates shown on the balance sheets included in the Financial Statements, or thereafter acquired by any of them, have arisen only from bona fide transactions in the Ordinary Course of Business. Neither the Company, the Real Property Affiliates nor the Stockholder has any knowledge of any facts or circumstances generally (other than general market and economic conditions) which would result in any material increase in the uncollectability of such accounts receivable in excess of the reserves therefore set forth in the Financial Statements. 4.09 TAXES (a) Except as set forth in the Disclosure Schedule, the Company and each Subsidiary has (or, in the case of returns becoming due after the date hereof and on or before the Closing Date, will have prior to the Closing Date) duly and timely filed (or filed extensions therefor) all Tax Returns required to be filed by the Company or Subsidiary on or before the Closing Date with respect to all applicable Taxes, and no penalties or other charges are or will become due with respect to any of the Tax Returns as the result of the late filing thereof. All of the Company Tax Returns are (or, in the case of returns becoming due after the date hereof and on or before the Closing Date, will be) true and complete in all material respects. Except as set forth in the Disclosure Schedule, the Company and each Subsidiary has paid all Taxes due or claimed to be due by any taxing authority (whether or not shown on any Tax Return). No claim has ever been made by an authority in a jurisdiction where the Company or a Subsidiary does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no Security Interests on any of the assets of the Company or any Subsidiary that arose in connection with any failure (or alleged failure) to pay any Tax. (b) The Company and each Subsidiary has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party. (c) There is no action, suit, proceeding, audit, investigation or claim pending or, to the knowledge of the Company or the Stockholder, threatened in respect of any Taxes for -9-

which the Company or any Subsidiary is or may become liable, nor has any deficiency or claim for any such Taxes been proposed, asserted or, to the knowledge of the Company or the Stockholder, threatened. Except as set forth in the Disclosure Schedule, the Company and each Subsidiary has not requested any extension of time within which to file any Tax Return in respect of any taxable year which has not since been filed or consented to any waivers or extensions of any statute of limitations with respect to any taxable year of the Company or a Subsidiary. Except as set forth in the Disclosure Schedule, there is no Agreement, waiver or consent providing for an extension of time with respect to the assessment or collection of any Taxes against the Company or a Subsidiary, and no power of attorney granted by the Company or a Subsidiary with respect to any tax matters is currently in force. (d) The Company has furnished to the Buyer true and complete copies of all the Company and Subsidiary Tax Returns for the past three (3) years and within 30 days of the date hereof the Stockholder shall have furnished to the Buyer copies of all written communications relating to any such Company and Subsidiary Tax Returns or to any deficiency or claim proposed and/or asserted, irrespective of the outcome of such matter, but only to the extent such items relate to tax years (i) which are subject to an audit, investigation, examination or other proceeding, or (ii) with respect to which the statute of limitations has not expired. (e) The Disclosure Schedule sets forth (i) all federal tax elections that currently are in effect with respect to the Company or any Subsidiary, and (ii) all elections for purposes of foreign, state or local Taxes and all consents or Agreements for purposes of federal, foreign, state or local Taxes in each case that reasonably could be expected to have a material effect on the Company or any of its Subsidiaries or any of their respective Assets or operations after the Closing. The Disclosure Schedule sets forth all changes in accounting methods for Tax purposes at any time made, agreed to, requested or required with respect to the Company or any Subsidiary within the past three (3) years. (f) The Disclosure Schedule sets forth all state and local jurisdictions in which the Company and any Subsidiary is required to file Tax Returns. (g) Neither the Company nor any Subsidiary has requested or received a ruling from any taxing authority or signed a closing or other agreement with any taxing authority which could materially adversely affect any of them. (h) Except for the Central Hudson Group Federal Income Tax Allocation Agreement, the Company and each Subsidiary are not parties to, are not bound by, and have no obligation under, any Tax sharing agreement, Tax indemnification agreement or similar contract or arrangement. (i) No power of attorney has been granted with respect to the Company or any Subsidiary as to any matter relating to Taxes. (j) Neither the Company nor any Subsidiary has filed a consent pursuant to Section 341(f) of the Code (or any predecessor provision) or agreed to have Section 341(f)(2) of - 10 -

the Code apply to any disposition of a subsection (f) asset, as such term is defined in Section 341(f)(4) of the Code, owned by the Company or any Subsidiary. (k) Since its incorporation, neither the Company nor any Subsidiary has incurred any liability for Taxes other than in the ordinary course of business. (l) Neither the Company nor any Subsidiary has liability for Taxes of any person pursuant to Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) other than for the consolidated return group of which Stockholder is the parent. (m) Neither the Company nor any Subsidiary is a party to any contract, agreement or other arrangement which could result in the payment by it of amounts that could be nondeductible by reason of Section 280G or 162(m) of the Code. 4.10 CONDUCT OF BUSINESS; ABSENCE OF MATERIAL ADVERSE EFFECT Other than as set forth in the Disclosure Schedule, since the Balance Sheet Date, there has been no Material Adverse Effect, and no change except in the Ordinary Course of Business, in the business, operations, condition (financial or otherwise), Assets or liabilities of the Company or the Real Property Affiliates. Except as set forth in the Disclosure Schedule, since the Balance Sheet Date, each of the Company and the Real Property Affiliates has conducted its business substantially in the manner heretofore conducted and only in the Ordinary Course of Business, and has not (a) incurred a significant loss of, or significant injury to, any Assets of the Company or the Real Property Affiliates as the result of any fire, explosion, flood, windstorm, earthquake, labor trouble, riot, accident, act of God or public enemy or armed forces, or other casualty; (b) issued any capital stock, bonds or other corporate securities or debt instruments, granted any options, warrants or other rights calling for the issuance thereof, or borrowed any funds; (c) incurred, or become subject to, any obligation or liability (absolute or contingent, matured or unmatured, known or unknown), except current liabilities incurred in the Ordinary Course of Business; (d) discharged or satisfied any Encumbrance or paid any obligation or liability (absolute or contingent, matured or unmatured, known or unknown) other than current liabilities shown in the balance sheets included in the Financial Statements, and current liabilities incurred since the Balance Sheet Date in the Ordinary Course of Business; (e) declared or made payment of, or set aside for payment, any dividends or distributions of any Assets, or purchased, redeemed or otherwise acquired any of its capital stock, any securities convertible into capital stock, or any other securities; (f) mortgaged, pledged or subjected to any Encumbrance any of its Assets; (g) sold, exchanged, transferred or otherwise disposed of any of its Assets, or canceled any debts or claims, except in each case in the Ordinary Course of Business; (h) written down the value of any Assets or written off as uncollectible any notes or accounts receivable, except write-downs and write-offs in the Ordinary Course of Business, none of which had or would have a Material Adverse Effect; (i) entered into any transactions other than in the Ordinary Course of Business; (j) except in furtherance of Stockholder's undertaking under Section 3.05 hereof, increased the rate of compensation or benefits payable, or to become payable, by it to any of its directors, officers, employees or consultants except such as would not have a Material Adverse Effect; (k) made or permitted any amendment or termination of any Agreement to which it is a party which would have a Material Adverse Effect; (l) through negotiation or otherwise made any - 11 -

commitment or incurred any liability to any labor organization; (m) made any accrual or arrangement for or payment of bonuses or special compensation of any kind to any director, officer or employee; (n) except in furtherance of Stockholder's undertaking under Section 3.05 hereof, directly or indirectly paid any severance or termination pay to any officer or employee in excess of two (2) months' salary; (o) except as otherwise provided in Section 2.03 above, made capital expenditures, or entered into commitments therefor, aggregating more than Fifty Thousand Dollars ($50,000); (p) made any change in any method of accounting or accounting practice; (q) entered into any transaction of the type described in SECTION 4.23; (r) made any charitable contributions or pledges; or (s) made an Agreement to do any of the foregoing. 4.11 REAL PROPERTY (a) The Disclosure Schedule lists and sets forth a description of all the Real Property. Such Real Property constitutes all Real Property which is necessary for the Company and the Real Property Affiliates to conduct their business as presently conducted and is suitable and adequate for uses for which it is currently devoted. The Real Property is subject to no Encumbrances other than those disclosed on Disclosure Schedule 4.11 (a) and other Encumbrances which would not have a Material Adverse Effect (collectively, "Permitted Liens"). (b) There are now in full force and effect duly issued certificates of occupancy permitting the Real Property and improvements located thereon (including but not limited to the Generating Facilities) to be legally used and occupied as the same are now constituted. The Company has access to the Real Property as shown on the surveys described in Disclosure Schedule 4.11(b) (the "Surveys"). Seller has not received written notice of any pending or threatened restriction or denial, governmental or otherwise, upon the ingress and egress to the Real Property. Except as shown on the Surveys, there is not (i) any structure located on any of the Real Property which encroaches on or over the boundaries of neighboring or adjacent properties or (ii) any structure of any other party which encroaches on or over the boundaries of any of such Real Property except, in each such instance, in a manner which would not have a Material Adverse Effect. To Seller's knowledge, except as set forth on the Surveys, the Real Property is not located in a flood plain, flood hazard area, wetland or lakeshore erosion area within the meaning of any law. (c) Neither the whole nor any portion of the Real Property or any other assets of the Company and/or Real Property Affiliates are subject to any order to be sold or are being condemned, expropriated or otherwise taken by any government entity with or without payment of compensation therefor, nor has Stockholder received written notices of any such condemnation, expropriation or taking. 4.12 ASSETS (a) Except as set forth in the Disclosure Schedule (and excluding the Real Property), each of the Company and the Real Property Affiliates has good, valid and marketable title to all of its Assets, including, without limitation, all Assets reflected in the balance sheets included in the Financial Statements and all Assets purchased by the Company or the Real - 12 -

Property Affiliates since the Balance Sheet Date (except for (i) Assets reflected in such balance sheets or acquired since the Balance Sheet Date which have been sold or otherwise disposed of in the Ordinary Course of Business, (ii) the TCCs, and (iii) Assets and associated liabilities to be retained by Stockholder as set forth in the Disclosure Schedule), free and clear of all Encumbrances. (b) All Real Property and other Assets owned or leased by the Company or Real Property Affiliates are in good operating condition and repair (excepting ordinary wear and tear), have been maintained consistent with the standards generally followed in the industry and are sufficient to carry on the business of the Company as conducted during the preceding twelve (12) months except such as would not reasonably have a Material Adverse Effect. All Buildings, plants and other structures owned or otherwise utilized by the Company or Real Property Affiliates (including but not limited to the Generating Facilities) are in good condition and repair except such as would not reasonably have a Material Adverse Effect. (c) The Disclosure Schedule shows the quantities of (i) fuel and inventory as of September 30, 2001 included in the amount of $1,166,427 referred to in Section 2.03(a), and (ii) GP Mate inventory as of November 21, 2001 included in the amount of $1,563,907 referred to in Section 2.03(a). 4.13 INSURANCE The Disclosure Schedule lists all policies of title, Asset, fire, hazard, casualty, liability, life, worker's compensation and other forms of insurance of any kind owned or held by or maintained for the benefit of the Company or the Real Property Affiliates. All such insurance is owned or held by the Company except as otherwise indicated on the Disclosure Schedule. All such policies: (a) are with insurance companies financially sound and reputable; (b) are in full force and effect; (c) are sufficient for compliance in all material respects by the Company or the Real Property Affiliates with all requirements of Law and of all Agreements to which the Company or a Real Property Affiliate is a party; (d) are valid and outstanding policies enforceable against the insurer; (e) insure against risks of the kind customarily insured against and in amounts customarily carried by companies similarly situated and by companies engaged in similar businesses and owning similar properties and provide adequate insurance coverage for the business and Assets of the Company and (f) provide that they will remain in full force and effect through the respective dates set forth in the Disclosure Schedule. 4.14 INTELLECTUAL PROPERTY The Disclosure Schedule lists all Intellectual Property and applications therefor owned or licensed by or registered in the name of the Company or the Real Property Affiliates. Except as otherwise specifically stated in the Disclosure Schedule, the Company owns or a Real Property Affiliate owns all of the Intellectual Property listed in the Disclosure Schedule purported to be owned by it and has the right to bring action for the infringement of such Intellectual Property purported to be owned by the Company or a Real Property Affiliate. Each of the Company or a Real Property Affiliate owns or possesses adequate rights to use all - 13 -

Intellectual Property necessary to the conduct of its present business. Except as otherwise set forth in the Disclosure Schedule, neither the Company or a Real Property Affiliate nor the Stockholder has any knowledge, and has not received any notice to the effect, that any product the Company or a Real Property Affiliate sells or that any service the Company or a Real Property Affiliate renders, or that the marketing or use by the Company or a Real Property Affiliate or another of any such product or service, may or is claimed to infringe any Intellectual Property or legally protectable right of another. 4.15 DEBT INSTRUMENTS The Disclosure Schedule sets forth all material mortgages, indentures, notes, guarantees and other Agreements for or relating to borrowed money (including, without limitation, conditional sales agreements and capital leases) to which the Company or a Real Property Affiliate is a party or which have been assumed by the Company or a Real Property Affiliate or to which any Assets of the Company or a Real Property Affiliate are subject. The Company or a Real Property Affiliate, as the case may be, has performed all the material obligations required to be performed by it to date and is not in default in any material respect under any of the foregoing, and, to the Company's and the Stockholder's knowledge, there has not occurred any event which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute such a default. 4.16 LEASES The Disclosure Schedule lists all leases and other Agreements under which the Company or a Real Property Affiliate is lessee or lessor of any Asset, or holds, manages or operates any Asset owned by any third party, or under which any Asset owned by the Company or a Real Property Affiliate is held, operated or managed by a third party. Each such lease and other Agreement is in full force and effect and constitutes a legal, valid and binding obligation of, and is legally enforceable against, the Company or a Real Property Affiliate, as the case may be, and, to the knowledge of the Stockholder, the other parties thereto. All governmental approvals required under applicable Laws to have been obtained by the Company with respect to such leases and other Agreements, if any, have been obtained, all filings or registrations required under applicable Laws to have been made by the Company or a Real Property Affiliate therefor, if any, have been made, and, to the knowledge of the Stockholder, there have been no threatened cancellations thereof and are no outstanding material disputes thereunder. The Company has in all material respects performed all obligations thereunder required to be performed by the Company to date. The Company is not and, to the knowledge of the Stockholder, no other party is in default in any material respect under any of the foregoing, and, except as set forth in the Disclosure Schedule, there has not, to the knowledge of the Stockholder, occurred any event which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute such a default. The Stockholder has provided to the Buyer copies of each such lease and other Agreement listed on the Disclosure Schedule. - 14 -

4.17 OTHER AGREEMENTS (a) The Disclosure Schedule lists all material Agreements to which the Company or a Real Property Affiliate is a party or by which it is bound at the date hereof. Each such Agreement is in full force and effect and constitutes a legal, valid and binding obligation of, and is legally enforceable against, the Company or a Real Property Affiliate, as the case may be, and, to the knowledge of the Stockholder, the other parties thereto. All governmental approvals required under applicable Laws to have been obtained by the Company or a Real Property Affiliate with respect to such Agreements, if any, have been obtained, all filings or registrations required under applicable Laws to have been made by it therefor, if any, have been made, and, to the knowledge of the Stockholder, there have been no threatened cancellations thereof and there are no outstanding material disputes thereunder known to the Company or the Stockholder. The Company or a Real Property Affiliate, as the case may be, has in all material respects performed all the obligations thereunder required to be performed by it to date. Neither the Company nor a Real Property Affiliate is and, to the knowledge of the Stockholder, no other party is in default in any material respect under any of the Agreements described in the Disclosure Schedule, and there has not, to the knowledge of the Stockholder, occurred any event which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute such a default. Except as otherwise indicated on the Disclosure Schedule, all Agreements have been completed, executed and delivered by the parties thereto. None of the Agreements entered into after the date hereof for the purchase of materials, supplies, services, merchandise or equipment shall obligate the Company for a period of more than one year. The Stockholder has provided to the Buyer copies of all material Agreements listed on the Disclosure Schedule. (b) Except as set forth in the Disclosure Schedule, neither the Company nor a Real Property Affiliate is a party to any oral or written: (i) Agreement for the employment of any officer, employee, consultant, independent contractor or advisor; (ii) license agreement or distributor, dealer, manufacturer's representative, sales agency, advertising, property management or brokerage agreement; (iii) Agreement with any labor organization or other collective bargaining unit; (iv) Agreement for the future purchase of materials, supplies, services, merchandise or equipment involving payments of more than Twenty-Five Thousand Dollars ($25,000) over its remaining term (including, without limitation, periods covered by any option to renew by either party); (v) Agreement for the purchase, sale or lease of any real estate; (vi) except in furtherance of Stockholder's obligations under Section 3.05 hereof, profit-sharing, bonus, incentive compensation, deferred compensation, stock option, severance pay, stock purchase, employee benefit, insurance, hospitalization, pension, retirement or other similar plan or Agreement; (vii) Agreement for the purchase, sale or lease of any of its Assets other than in the Ordinary Course of Business or the grant of any preferential rights to purchase any of its Assets or rights; (viii) Agreement which contains any provisions requiring the Company or a Real Property Affiliate to indemnify any other party thereto; (ix) joint venture agreement or other Agreement involving the sharing of profits; (x) outstanding loan to any person or entity or receivable due from the Stockholder or any Affiliate of the Company; or (xi) Agreement (including, without limitation, Agreements not to compete and exclusivity Agreements) that imposes any restriction on any business operations of the Company or a Real Property Affiliate which, either individually or in the aggregate, would have a Material Adverse Effect. - 15 -

(c) The Disclosure Schedule sets forth those Agreements as to which Stockholder shall retain certain liabilities as described in the Disclosure Schedule. 4.18 BOOKS AND RECORDS Except as set forth in the Disclosure Schedule, the books of account, stock records, minute books and other records of the Company and the Real Property Affiliates are true and complete in all material respects, and the matters contained therein are appropriately and accurately reflected in the Financial Statements to the extent required to be reflected therein under generally accepted accounting principles consistently applied. 4.19 LITIGATION; DISPUTES (a) Except as set forth in the Disclosure Schedule and except such as are to be retained by or assigned to the Stockholder, as set forth in the Disclosure Schedule, there are no actions, suits, claims, arbitrations, proceedings or investigations pending, or, to the knowledge of the Stockholder, threatened against, affecting or involving any of the Company or a Real Property Affiliate or its respective business or Assets, or the transactions contemplated by this Purchase Agreement, at Law or in equity or admiralty, or before or by any court, arbitrator or Governmental Authority, domestic or foreign. Except as set forth in the Disclosure Schedule, neither the Company nor a Real Property Affiliate is operating under, subject to or in default with respect to any order, award, writ, injunction, decree or judgment of any court, arbitrator or Governmental Authority. (b) Except as set forth in the Disclosure Schedule, neither the Company nor a Real Property Affiliate is currently involved in and, to the knowledge of the Company and the Stockholder, there are no threatened disputes with any of its current or former employees, agents, brokers, distributors, vendors, customers, business consultants, franchisees, franchisors, representatives or independent contractors which, if adversely determined, would have a Material Adverse Effect. 4.20 LABOR RELATIONS There are no strikes, work stoppages, grievance proceedings, union organization efforts or other material controversies pending, or, to the Company's and the Stockholder's knowledge, threatened between the Company and (i) any current or former employees of the Company or (ii) any union or other collective bargaining unit representing such employees. Except as set forth in the Disclosure Schedule, the Company has complied with and is in compliance in all material respects with all Laws relating to employment or the workplace, including, without limitation, provisions relating to wages, hours, collective bargaining, safety and health, work authorization, equal employment opportunity, immigration, withholding, unemployment compensation, worker's compensation, employee privacy and right to know. Except as set forth in the Disclosure Schedule, there are no collective bargaining agreements or employment agreements between the Company and any of its employees not terminable at will. - 16 -

The consummation of the transactions contemplated hereby will not cause the Buyer or the Company to incur or suffer any liability relating to, or obligation to pay, severance, termination or other payments to any person or entity. 4.21 BENEFIT PLANS (a) Except as set forth in the Disclosure Schedule, the Company (i) does not maintain and has not during the past six (6) years maintained any Plan or Other Arrangement, (ii) is not and has not during the past six (6) years been a party to any Plan or Other Arrangement and (iii) has no obligations under any Plan or Other Arrangement. (b) The Company has furnished to the Buyer true and complete copies of each of the following Documents: (i) the Documents setting forth the terms of each Plan; (ii) all related trust agreements or annuity agreements (and any other funding Document) for each Plan; (iii) for the two (2) most recent plan years, all annual reports ("Form 5500 Series") on each Plan that have been filed with any governmental agency; (iv) the current summary plan description and subsequent summaries of material modifications for each Title I Plan; (v) all DOL opinions on any Plan and all correspondence relating to the request for and receipt of each opinion; (vi) all Internal Revenue Service rulings, opinions or technical advice relating to any Plan and all correspondence relating to the request for and receipt of each ruling, opinion or technical advice; and (vii) all Agreements with service providers or fiduciaries for providing services on behalf of any Plan. For each Other Arrangement, the Company has furnished to the Buyer true and complete copies of each policy, Agreement or other Document setting forth or explaining the terms of the Other Arrangement, all related trust agreements or other funding Documents (including, without limitation, insurance contracts, certificates of deposit, money market accounts, etc.), other submissions with any governmental agency within the last three (3) years, and all Agreements with service providers or fiduciaries for providing services on behalf of any material Other Arrangement. (c) None of the Plans is an ESOP, or a funded Welfare Plan. Further, neither the Company nor any ERISA Affiliate maintains or contributes to, or during the last six (6) years maintained or contributed to, a Multiemployer Plan. (d) None of the Plans is a Pension Plan subject to Title IV of ERISA. Further, as of September 30, 2001, no Pension Plan subject to Title IV of ERISA maintained by an ERISA Affiliate has an accumulated funding deficiency under Title IV of ERISA. (e) The Company has made all contributions and other payments required by and required to have been paid under the terms of each Plan and Other Arrangement and has taken no action (including, without limitation, actions required by Law) relating to any Plan or Other Arrangement that will increase any obligation of the Buyer or the Company under any Plan or Other Arrangement other than increases in employee compensation in the Ordinary Course of Business. - 17 -

(f) The Disclosure Schedule sets forth a list of all Qualified Plans. All Qualified Plans and any related trust agreements or annuity agreements (or any other funding Document) comply and have complied with ERISA, the Code (including, without limitation, the requirements for Tax qualification described in Section 401 thereof), and all other Laws. The trusts established under such Qualified Plans are exempt from federal income taxes under Section 501(a) of the Code. The Company has received determination letters issued by the Internal Revenue Service with respect to each Qualified Plan or the remedial amendment period under Code Section 401(b) within which to request a favorable determination letter has not yet expired, and the Company has furnished to the Buyer true and complete copies of all such determination letters and all correspondence relating to the applications therefor. All material statements made by or on behalf of the Company to the Internal Revenue Service in connection with applications for determinations with respect to each Qualified Plan were true and complete when made and continue to be true and complete except that demographic data and composition of controlled group may have changed. To the knowledge of the Company, nothing has occurred since the date of the most recent applicable determination letter that would adversely affect the tax-qualified status of any Qualified Plan or, if it has occurred, it can be corrected under an IRS correction program. (g) The Company has complied in all material respects with all applicable provisions of the Code, ERISA, the National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Securities Act, the Exchange Act, and all other Laws pertaining to the Plans, Other Arrangements and other employee or employment related benefits, and all premiums and assessments relating to all Plans or Other Arrangements. The Company has no liability for any delinquent contributions within the meaning of Section 515 of ERISA (including, without limitation, related attorneys' fees, costs, liquidated damages and interest) or for any arrearages of wages. The Company has no pending unfair labor practice charges, contract grievances under any collective bargaining agreement, other administrative charges, claims, grievances or lawsuits before any court, governmental agency, regulatory body, or arbiter arising under any Law governing any Plan, and, to the knowledge of the Company and the Stockholder, there exist no facts that could give rise to such a claim. (h) The Disclosure Schedule describes all transactions in which the Company or any of the Plans has engaged in violation of Section 406(a) or 406(b) of ERISA for which no exemption exists under Section 408 of ERISA and all "prohibited transactions" (as such term is defined in Section 4975(c)(1) of the Code), for which no exemption exists under Section 4975(c)(2) or 4975(d) of the Code and for which the liability could be material (e.g., no representation that elective deferrals were remitted to trustee as soon as they were reasonably segregable from corporate assets). (i) Except for payments under the dependent care and health care reimbursement plans no Plan or Other Arrangement, individually or collectively, provides for any payment by the Company to any employee or independent contractor that is not deductible under Section 162(a)(1) or 404 of the Code or that is an "excess parachute payment" pursuant to Section 280G of the Code. - 18 -

(j) The Company has not filed, and has had no obligation to file, any Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans) on any Plan for which the liability would be material. The Company has no liability for Taxes required to be reported on Form 5330. (k) Except as required under Code Section 4980B(f) of the Code or pursuant to the terms of a tax-qualified plan, no Plan promises or provides post-retirement medical, life insurance or other benefits due now or in the future to current, former or retired employees of the Company. (l) The Company has (i) filed or caused to be filed all returns and reports on the Plans that they are required to file and (ii) paid or made adequate provision for all fees, interest, penalties, assessments or deficiencies that have become due pursuant to those returns or reports or pursuant to any assessment or adjustment that has been made relating to those returns or reports. All other fees, interest, penalties and assessments that are payable by or for the Company have been timely reported, fully paid and discharged. There are no unpaid fees, penalties, interest or assessments due from the Company or from any other person that are or could become a lien on any Asset of the Company or could otherwise adversely affect the business or Assets of the Company. The Company has collected or withheld all amounts that are required to be collected or withheld by them to discharge their obligations, and all of those amounts have been paid to the appropriate governmental agencies or set aside in appropriate accounts for future payment when due. 4.22 ENVIRONMENTAL Except as set forth in the Disclosure Schedule: (a) The Company and the Real Property Affiliates are in compliance with, and the Company's use of the Real Property and all improvements thereon are in compliance with, all Environmental Laws, except for any noncompliance which has not had, and would not reasonably be expected to have, a Material Adverse Effect. (b) There are no pending or to the Stockholder's knowledge, threatened actions, suits, claims, legal proceedings or other proceedings ("ENVIRONMENTAL CLAIMS") based on, and neither the Company or the Real Property Affiliates nor the Stockholder has directly or indirectly received any notice of any complaint, order, directive, citation, notice of responsibility, notice of potential responsibility, or information request from any Governmental Authority or any other person or entity or knows any fact(s) which the Stockholder reasonably believes form(s) the basis for any such actions or notices arising out of or attributable to: (i) the current or past presence, Release or threatened Release at or from any part of the Real Property related to the operations of the Company or the Real Property Affiliates; (ii) the off-site disposal or treatment of Hazardous Materials originating on or from the Real Property with respect to the business or Assets of the Company or the Real Property Affiliates; (iii) any facility operations, procedures or designs of the Company or the Real Property Affiliates which do not conform to - 19 -

requirements of the Environmental Laws; or (iv) any violation of Environmental Laws at any part of the Real Property or arising from the activities of the Company of the Real Property Affiliates (or to the Stockholder's knowledge, the activities of the Company's predecessors in title) involving Hazardous Materials; and with respect to each of the foregoing (i)-(iv) except for any such Environmental Claims which would not reasonably be expected to have a Material Adverse Effect. (c) The Company or a Real Property Affiliate, as the case may be, has been duly issued, and currently has and will maintain through the Closing Date, all permits, licenses, certificates and approvals required to be obtained by the Company under any Environmental Laws. The Company is in material compliance with the terms and conditions of all permits, licenses and certificates required to be obtained by the Company under any Environmental Laws. A true and complete list of such permits, licenses, certificates and approvals, all of which are valid and in full force and effect, is set out in the Disclosure Schedule. (d) The Company has furnished to the Buyer accurate and complete copies of any environmental reports, assessments or other records, if any, relating to the environmental condition of the Real Property of which the Company, the Real Property Affiliates or the Stockholder is in possession. (e) The Company will promptly furnish to the Buyer written notice of any Release or of any actions or notices described in SECTION 4.22(B) that are received prior to Closing. (f) None of the Stockholder, the Company, or the Real Property Affiliates (i) is a party to or has agreed to any consent decree or order under any Environmental Laws relating to the Assets or the Generating Facilities, nor (ii) to the Stockholder's knowledge, is subject to any outstanding investigation, judgment, decree or order relating to compliance with any Environmental Laws or to the investigation or cleanup of Hazardous Materials under any Environmental Laws. 4.23 TRANSACTIONS WITH RELATED PARTIES (a) Except as set forth in the Disclosure Schedule, neither any present or former officer, director, stockholder or person known by the Company or the Stockholder to be an Affiliate of the Company, nor any person known by the Company or the Stockholder to be an Affiliate of any such person, is currently a party to any transaction or Agreement with the Company, including, without limitation, any Agreement providing for the employment of, furnishing of services by, rental of Assets from or to, or otherwise requiring payments to, any such officer, director, stockholder or Affiliate. (b) The Disclosure Schedule sets forth a list of Agreements between Affiliates of the Company and third parties which are for the benefit of the Company and which shall be assigned to the Company on or before the Closing Date. - 20 -

4.24 RESTRICTIONS AND CONSENTS (a) Except as set forth in the Disclosure Schedule, there are no Agreements, or other restrictions to which the Company or the Stockholder is a party or subject that would prevent or restrict the execution, delivery or performance of this Purchase Agreement by the Stockholder or result in any penalty, forfeiture, Agreement termination, or restriction on business operations of the Company as a result of the execution, delivery or performance of this Purchase Agreement by the Stockholder. The Disclosure Schedule lists all such Agreements that require the consent or acquiescence of any person or entity which is not party to this Purchase Agreement with respect to the execution, delivery or performance of this Purchase Agreement by the Stockholder. (b) Except as set forth in the Disclosure Schedule, no declaration, filing, or registration with, or notice to, or authorization, consent or approval of any Governmental Authority or any other Person is necessary for the consummation by the Stockholder of the transactions contemplated hereby. (c) The Disclosure Schedule lists all non-environmental permits, consents, certificates of occupancy, approvals and licenses necessary for operation of the Generating Facilities as currently conducted. The Company is in material compliance with the terms and conditions of all such non-environmental permits, consents, certificates of occupancy, approvals and licenses listed in the Disclosure Schedule. 4.25 AUTHORIZATION The execution, delivery and performance by the Stockholder of this Purchase Agreement and all other Documents executed by the Stockholder in connection with the transactions contemplated hereby, the fulfillment of and compliance with the respective terms and provisions hereof and thereby, and the consummation by the Stockholder of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not, subject to such consents, approvals and filings as are set forth in the Disclosure Schedule: (a) conflict with, or violate any provision of, any Law having applicability to the Stockholder, the Company or any Real Property Affiliate, or any provision of the certificate of incorporation or bylaws of the Stockholder, the Company or the Real Property Affiliates; (b) conflict with, or result in any breach of, or constitute a default under any Agreement to which the Stockholder, the Company or any Real Property Affiliate is a party or by which it or any of its Assets may be bound; or (c) result in or require the creation or imposition of or result in the acceleration of any indebtedness (other than intercompany indebtedness to Affiliates of the Company), or of any Encumbrance of any nature upon, or with respect to, the Company or the Real Property Affiliates or any of the Assets now owned or hereafter acquired by the Company or the Real Property Affiliates. - 21 -

4.26 LEGAL COMPLIANCE None of the Company or the Real Property Affiliates is in violation of or default under, nor has it breached, any term or provision of its certificate of incorporation or bylaws or any Agreement to which it is a party or by which it or any Asset thereof is bound or affected, except for any violations, breaches or defaults under Agreements which do not, individually or in the aggregate with any other such violations, breaches and defaults, have a Material Adverse Effect. Except as set forth in Disclosure Schedule 4.22, each of the Company and the Real Property Affiliates is in compliance with all Laws, the failure to comply with which could have a Material Adverse Effect. 4.27 BINDING OBLIGATION This Purchase Agreement constitutes, and each Document to be executed by the Stockholder pursuant hereto, when executed and delivered in accordance with the provisions hereof, shall constitute, a valid and binding obligation of the Stockholder, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors' rights generally and by the application of general principles of equity. 4.28 TITLE TO CAPITAL STOCK The Stockholder is and on the Closing Date will be, the sole legal, beneficial and record owner of all of the issued and outstanding shares of capital stock of the Company as set forth in Section 4.04 above hereto, with good, valid and marketable title thereto, free and clear of all Encumbrances, except such restrictions on the transfer of such shares as may be applicable under federal and state securities laws, with full right and lawful authority to sell and transfer the shares to the Buyer pursuant to this Purchase Agreement. The Company is and on the Closing Date will be, the sole legal, beneficial and record owner of all of the issued and outstanding shares of capital stock of the Real Property Affiliates as set forth in Section 4.04 above hereto, with good, valid and marketable title thereto, free and clear of all Encumbrances, except such restrictions on the transfer of such shares as may be applicable under federal and state securities laws. 4.29 AUTHORITY AND CAPACITY The Stockholder has full legal right, capacity, power and authority to execute and deliver this Purchase Agreement and all other Documents executed or to be executed by the Stockholder pursuant hereto, and to consummate the transactions contemplated hereby and thereby. - 22 -

4.30 ABSENCE OF VIOLATION The execution, delivery and performance by the Stockholder of this Purchase Agreement and all other Documents contemplated hereby to which such Stockholder is a party, the fulfillment of and the compliance with the respective terms and provisions hereof and thereof, and the consummation of the transactions contemplated hereby and thereby, do not and will not, except as otherwise set forth in the Disclosure Schedule: (a) conflict with, or violate any provision of, any Laws having applicability to such Stockholder; or (b) conflict with, or result in any breach of, or constitute a default under, any Agreement to which the Stockholder is a party. 4.31 TRANSFER OF TITLE Upon payment at Closing for the Shares to be purchased from the Stockholder pursuant to the terms of this Purchase Agreement, the Buyer will acquire good, valid and marketable title thereto, free and clear of all Encumbrances, except such restrictions on the transfer of such shares as may be applicable under federal and state securities laws. 4.32 HOLDING COMPANY ACT AND EWG STATUS The Company is not an "electric utility company" or a "holding company" as defined in the Public Utility Holding Company Act of 1935, as amended ("PUHCA"). The Company has been determined to be an "exempt wholesale generator" under Section 32 of PUHCA. The execution and delivery of this Agreement by the Stockholder does not violate any provision of PUHCA or any rule or regulation thereunder. 4.33 MARKET-BASED RATES On or before the Closing Date, the Company will have authority to sell wholesale electric power at market-based rates. 4.34 NYISO The Generating Facilities are all currently owned and operated in full compliance with all applicable NYISO rules and regulations. 4.35 GENERATING FACILITIES INFORMATION The information provided by Stockholder at Section 4.35 of the Disclosure Schedule regarding the Generating Facilities contains no material misstatement with respect to the subject matter thereof as of the date hereof which would result in a Material Adverse Effect. - 23 -

4.36 EMISSIONS ALLOWANCES All Emission Allowances of vintage years 2003 and 2004, as set forth in Disclosure Schedule 7.02, are held by the Company free and clear of all Encumbrances. 5. REPRESENTATIONS AND WARRANTIES OF THE BUYER The Buyer hereby represents and warrants to the Stockholder as follows: 5.01 ORGANIZATION AND STANDING The Buyer is a corporation duly organized, validly existing and in active status under the laws of the State of Wisconsin and has the corporate power and authority to enter into this Purchase Agreement and to carry out the transactions contemplated hereby. 5.02 AUTHORIZATION The execution, delivery and performance by the Buyer of this Purchase Agreement and all other Documents executed or to be executed by the Buyer in connection with the transactions contemplated hereby, the fulfillment of and the compliance with the respective terms and provisions hereof and thereof, and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action (which authorization has not been modified or rescinded and is in full force and effect), and do not and will not except as set forth in the Disclosure Schedule: (a) conflict with, or violate any provision of, any Law having applicability to the Buyer or any provision of the articles of incorporation or bylaws of the Buyer; or (b) conflict with, or result in any breach of, or constitute a default under, any Agreement to which the Buyer is a party or by which the Buyer is bound. No other corporate action is necessary for the Buyer to enter into this Purchase Agreement and all other Documents contemplated hereby and to consummate the transactions contemplated hereby and thereby. 5.03 BINDING OBLIGATION This Purchase Agreement constitutes, and each Document to be executed by the Buyer pursuant hereto, when executed and delivered in accordance with the provisions hereof, shall constitute a valid and binding obligation of the Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors' rights generally and by the application of general principles of equity. 5.04 NO REGISTRATION UNDER THE SECURITIES ACT The Buyer understands that the capital stock to be purchased by it under this Purchase Agreement has not been registered under the Securities Act or any state securities laws, - 24 -

in reliance upon exemptions contained in the Securities Act and such state securities laws or interpretations thereof, and cannot be offered for sale, sold or otherwise transferred unless such capital stock being acquired hereunder subsequently is so registered or qualifies for exemption from registration under the Securities Act and such state securities laws. 5.05 ACQUISITION FOR INVESTMENT The capital stock is being acquired under this Purchase Agreement by the Buyer in good faith solely for its own account, for investment and not with a view toward resale or other distribution within the meaning of the Securities Act. Such capital stock will not be offered for sale, sold or otherwise transferred by the Buyer without either registration or exemption from registration under the Securities Act and applicable state securities laws. 5.06 EVALUATION OF MERITS AND RISKS OF INVESTMENT The Buyer has such knowledge and experience in financial and business matters that the Buyer is capable of evaluating the merits and risks of the Buyer's investment in such capital stock being acquired hereunder. The Buyer understands and is able to bear any economic risks associated with such investment (including, without limitation, the necessity of holding such capital stock for an indefinite period of time, inasmuch as such capital stock has not been registered under the Securities Act or any state securities laws). 5.07 CONSENTS Except as set forth in the Disclosure Schedule, no declarations, filings or registrations with, or notice to, or authorization, consent or approval of any Governmental Authority or any other Person is necessary for the consummation by the Buyer of the transaction contemplated by this Purchase Agreement. 6. COVENANTS OF THE BUYER 6.01 MAINTENANCE OF PLANS (a) The Buyer shall maintain either (i) each of the benefit plans currently maintained by the Company (as set forth on Schedule 4.21(a), other than items 1 and 10) and, with respect to a defined contribution plan, provide for participation by the Company's employees in a similar defined contribution plan of the Buyer, which plan may be an existing plan of the Buyer or one established specifically for purposes of this transaction (the "BUYER DEFINED CONTRIBUTION PLAN") or (ii) benefit plans which in the aggregate are substantially comparable in value to the benefit plans in which the Company's employees participate as of the Closing Date, on behalf of the Company's employees from the Closing Date through the end of calendar year 2005. - 25 -

(b) As soon as practicable after the Closing Date, the Stockholder shall cause the trustee of the Griffith Savings Incentive Plan (currently known as the CH Resources, Inc. Savings Incentive Plan), as in effect from time to time (the "SIP"), to effectuate, and the Buyer shall cause the trustee of the Buyer Defined Contribution Plan to accept, a transfer, in cash, of the entire account balances attributable to the Company's employees under the SIP (including appropriate earnings adjustments attributable to the period from the Closing Date to the date of transfer). The Buyer Defined Contribution Plan and the trust therefor, and the SIP and the trust therefor, shall be qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code, respectively, and each shall have a favorable determination letter or such other evidence of qualifications or exemption as is reasonably acceptable to the parties. 6.02 ENVIRONMENTAL LIABILITIES AND SITE ASSESSMENTS (a) At Closing, and except as set forth in Sections 6.02(b) and 11.04 below, the Buyer covenants to assume all past, present and future on-site and off-site liability, legally binding obligation or responsibility or Environmental Claim under or related to Environmental Law or common law arising from the pre-Closing and post-Closing ownership and operation of the Assets, and the pre-Closing AND POST-CLOSING environmental condition of the Assets (collectively, "Environmental Costs"). The Buyer further covenants to indemnify the Stockholder and hold the Stockholder harmless for all such liabilities, obligations and responsibilities as of Closing. (b) Except as provided in Section 11.04 below, the Stockholder shall retain potential off-site liability arising from waste shipments prior to Closing from the Generating Facilities to facilities owned and operated by non-related companies; provided such liabilities arose solely from the Company's operation of the Generating Facilities. The Buyer covenants that any other off-site liabilities relating to waste shipments from the Generating Facilities will become the obligation of the Buyer at Closing. (c) The Generating Facilities operate under environmental permits, licenses, registration, certificates, and other provisions administered by federal, state, county, and municipal agencies. At Closing, the Buyer covenants to assume and become responsible for compliance with Environmental Laws, environmental permits, requirements, and obligations applicable to the Generating Facilities. The Stockholder shall use its reasonable efforts to assist the Buyer in obtaining the transfer or re-issuance of the applicable environmental permits, licenses, registration, and certificates as necessary. 7. COVENANTS OF THE STOCKHOLDER 7.01 SEVERANCE (a) The Stockholder shall assume severance obligations as set forth in ss. 7.01(b) below to all current employees to whom Buyer does not offer continued employment in accordance with the following terms: (i) each employee's offer must be made in writing, (ii) salaries must be equal to or greater than, current base salaries, (iii) employees must receive - 26 -

equivalent benefits in the aggregate (as determined by the Stockholder), (iv) employees must continue to be employed at the location where they are currently assigned; (v) service time accrued with the Company will be fully credited in the Buyer's vacation plan, (vi) there will be no waiting period for eligibility in the Buyer's 401(k) plan; and (vii) there will be no lapse in health care coverage and the Buyer's benefit plan will assume liability for pre-existing medical conditions. (b) In the event that Buyer does not offer continued employment to any employee upon the foregoing terms, Stockholder shall be liable for such employee's severance. 7.02 ENVIRONMENTAL MATTERS (a) The Stockholder covenants that subject to applicable legal and regulatory provisions, the Stockholder will transfer to the Buyer any and all post-Closing environmental entitlements or credits associated with the Generating Facilities; PROVIDED that Stockholder shall retain Emission Allowances for 2001-2002 and Buyer shall receive the Emission Allowances for the years 2003 through 2004 in the manner set forth in the Disclosure Schedule. (b) The Stockholder covenants that all other future Emission Allowances and/or environmental entitlements or credits issued after the date hereof by any Governmental Authority for the Generating Facilities shall, at Closing, become the sole property of, and be for the sole benefit of, the Buyer. Without limitation, this covenant pertains to any federal or New York State Emission Allowance program or similar program administered by the U.S. EPA or NYSDEC or similar Governmental Authority and by which the U.S. EPA or the State of New York administers a NOx or SO2 Emission Allowance program. 7.03 CLOSING PERIOD OPERATIONS The Stockholder covenants to cause the Company to continue to own and operate the Generating Facilities during the period between execution of the Purchase Agreement and Closing. The Company shall operate the Generating Facilities and administer activities in the Ordinary Course of Business during this period but will consult with the Buyer on significant operating decisions, major capital expenditures and material contract executions. Material decisions will be subject to joint approval by the Stockholder and the Buyer. 7.04 TRANSITION SERVICES The Stockholder covenants to provide the Buyer with reasonable post-Closing transition services as requested by the Buyer to assist in effectuating the transition of operating, administrative and other support services. Such services shall be provided at arms-length commercial rates. - 27 -

7.05 EMPLOYEES Stockholder covenants and agrees to not offer employment to any employee of the Company or the Real Property Affiliates, or allow its Affiliates to offer employment to any employee of the Company or the Real Property Affiliates, without the prior written consent of the Buyer. Stockholder shall provide all commercially reasonable assistance and cooperation to Buyer as requested by Buyer in connection with the retention of the Company's employees. 7.06 VOLTAGE SUPPORT SERVICE (a) Stockholder covenants that each of the Generating Facilities will have an automatic voltage regulator prior to Closing. (b) Stockholder covenants that prior to Closing it shall use Commercially Reasonable Efforts to have each Generating Facility become a Supplier of Voltage Support Service, as those terms are defined in the NYISO tariffs. Such actions shall include all testing and other steps necessary to qualify for payments as described in Section 1.1 of Rate Schedule 2 of the NYISO ISO Market Administration and Control Area Services Tariff. (c) In the event that Stockholder fails to complete all necessary testing and other steps contemplated in Section 7.06(b), then Stockholder shall compensate Buyer for all costs directly and reasonably incurred in completing all such testing and other steps, but excluding costs incurred in the Ordinary Course of Business in connection with the operation of the Generating Facilities and excluding any revenues foregone by reason of the failure to complete such testing and other steps. 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE STOCKHOLDER The obligations of the Stockholder under this Purchase Agreement are subject to the fulfillment, at or prior to the Closing, of each of the following conditions, and failure to satisfy any such condition shall excuse and discharge all obligations of the Stockholder to carry out the provisions of this Purchase Agreement, unless such failure is agreed to in writing by the Stockholder: 8.01 REPRESENTATIONS AND WARRANTIES The representations and warranties made by the Buyer in this Purchase Agreement or in any Document furnished by the Buyer pursuant to this Purchase Agreement shall be true and correct in all material respects when made and on and as of the Closing Date as though such representations and warranties were made on and as of the Closing Date. - 28 -

8.02 PERFORMANCE The Buyer shall have performed and complied in all material respects with all Agreements and conditions required by this Purchase Agreement to be performed or complied with by the Buyer prior to the Closing Date. 8.03 BUYER'S CERTIFICATE The Buyer shall have delivered to the Stockholder a certificate, dated as of the Closing Date and executed by a senior officer of the Buyer, certifying to the fulfillment of the conditions set forth in SECTION 8.01 and SECTION 8.02. 8.04 DOCUMENTS AT CLOSING All Documents required to be furnished by the Buyer to the Stockholder prior to or at the Closing shall have been so furnished. 8.05 LEGAL OPINION The Stockholder shall have received an opinion from Foley & Lardner, counsel to the Buyer, in form and substance reasonably satisfactory to the Stockholder. 8.06 CONSENTS AND APPROVALS The Stockholder shall have obtained all of the waivers, permits, consents, approvals or other authorizations set forth in Disclosure Schedule 4.24(b), in form and substance reasonably satisfactory to Stockholder (including expiration of any applicable appeal periods), all of which are in full force and effect on the Closing Date. 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER The obligations of the Buyer under this Purchase Agreement are subject to the fulfillment, at or prior to the Closing, of each of the following conditions, and failure to satisfy any such condition shall excuse and discharge all obligations of the Buyer to carry out the provisions of this Agreement, unless such failure is agreed to in writing by the Buyer: 9.01 REPRESENTATIONS AND WARRANTIES The representations and warranties made by the Stockholder in this Purchase Agreement and the statements contained in the Disclosure Schedule and Exhibits attached hereto or in any Document furnished by the Company or the Stockholder pursuant to this Purchase Agreement shall be true and correct in all material respects when made, and on and as of the Closing Date as though such representations and warranties were made on and as of the Closing Date. - 29 -

9.02 PERFORMANCE The Stockholder shall have performed and complied in all material respects with all Agreements and conditions required by this Purchase Agreement to be performed or complied with prior to the Closing Date. 9.03 ABSENCE OF ADVERSE CHANGES There shall have been no Material Adverse Effect since the Balance Sheet Date in the business, operations, condition (financial or otherwise), Assets or liabilities of the Company or the Real Property Affiliates. 9.04 LEGAL PROCEEDINGS No action or proceeding by or before any Governmental Authority shall have been instituted or threatened (and not subsequently settled, dismissed or otherwise terminated) which is reasonably expected to restrain, prohibit or invalidate the transactions contemplated by this Purchase Agreement. 9.05 DOCUMENTS AT CLOSING All Documents required to be furnished by the Stockholder to the Buyer prior to or at the Closing shall have been so furnished. 9.06 OFFICER CERTIFICATE The Stockholder shall have delivered to the Buyer a certificate, dated as of the Closing Date and executed by an authorized officer of the Stockholder, certifying to the fulfillment of the conditions specified in SECTIONS 9.01 THROUGH 9.05. 9.07 CONSENTS All consents, authorizations, approvals and notifications required to be obtained or made by the Stockholder in connection with the consummation of the transactions contemplated by this Purchase Agreement shall have been duly obtained or made in form and substance reasonably satisfactory to Buyer (including expiration of all applicable appeal periods) and shall be in full force and effect as of the Closing Date. 9.08 RESIGNATION OF DIRECTORS The Buyer shall have received the written resignations of all of the members of the Board of Directors and to the extent requested by the Buyer, the officers of the Company (effective as of the Closing Date). - 30 -

9.09 LEGAL OPINION The Buyer shall have received an opinion from Winston & Strawn, counsel to the Stockholder, in form and substance reasonably satisfactory to the Buyer. 9.10 CONSENTS AND APPROVALS The Buyer shall have obtained all of the waivers, permits, consents, approvals or other authorizations set forth in Disclosure Schedule 5.07, in form and substance reasonably satisfactory to Buyer (including expiration of all applicable appeal periods), all of which are in full force and effect on the Closing Date. 9.11 FIRPTA STATEMENT Stockholder shall have furnished to Buyer on or before the Closing Date a certification of Stockholder's nonforeign status as set forth in Treasury Regulation Section 1.445-2(b). If Stockholder shall not have furnished such a statement at or prior to the Closing, Buyer may close and withhold such amounts from the Purchase Price as Buyer and Stockholder reasonably deem appropriate under Section 1445 of the Code. 9.12 REAL ESTATE Buyer shall have received: (1) a "non-imputation" endorsement (protecting the Company and/or Real Property Affiliates against matters that might have been known to Stockholder or the Company's prior management and/or employees) in a form reasonably acceptable to Buyer; (2) new owner's title policies insuring the full value of all Real Property owned, leased or used as of the date of Closing; (3) estoppel certificates from Niagara County Industrial Development Authority, Onandaga County Industrial Development Authority and Lewis County Industrial Development Authority, in a form reasonably acceptable to Buyer; and (4) current ALTA surveys of all Real Property owned, leased or used by the Company and/or Real Property Affiliates (including appurtenant easements) all of which items (1) through (4) above disclose no matters which would have a Material Adverse Effect except insofar as such matters shall have been cured to Buyer's reasonable satisfaction. Such title commitments and policies and ALTA surveys shall be at Buyer's expense. If Buyer elects to obtain updates of the Surveys, or new surveys, Buyer shall order same within fifteen (15) days of this Purchase Agreement. Buyer shall receive such items for review, if ordered, not later than thirty (30) days prior to Closing. 9.13 RELIANCE LETTER Buyer shall have received a letter report addressed to Buyer from the applicable environmental consultant, dated within thirty (30) days prior to the Closing Date, (a) updating the environmental site assessments concerning the Generating Facilities and (b) permitting Buyer - 31 -

to rely on the environmental site assessments, as updated, as though such assessment(s) had originally been performed on behalf of, addressed and delivered to Buyer. 9.14 INSURANCE Buyer shall have obtained all insurance coverages that are usual, customary and reasonably necessary for operation of the Generating Facilities in accordance with prevailing industry standards; PROVIDED that if such insurance coverages are not available at any cost on or after April 30, 2002, Buyer may elect to delay the Closing until such coverages become available, PROVIDED FURTHER that no Closing Date Purchase Price Adjustment shall be made if Buyer so elects and all other conditions to Buyer's obligation to close shall have been met or waived. 10. CLOSING 10.01 CLOSING OF SALE AND PURCHASE Subject to the terms and conditions of this Purchase Agreement, the Closing shall be initially scheduled for April 15, 2002 to take place on the Closing Date at the offices of Winston & Strawn, 1400 L St., N.W., Washington, D.C. or at such other date, time and place acceptable to the Buyer and the Stockholder. The Closing shall be effective for all purposes as of 11:59 p.m. Eastern time, on the Closing Date. 10.02 DELIVERIES BY THE STOCKHOLDER At the Closing, the Stockholder shall deliver to the Buyer the following: (a) certificates representing the shares of capital stock being sold to the Buyer pursuant to SECTION 2.01, duly endorsed in blank or with duly executed stock powers attached; (b) a copy of the resolutions adopted by the Board of Directors of the Stockholder, the Company and the Real Property Affiliates authorizing the transactions contemplated by this Purchase Agreement certified by the Secretary or other duly authorized officer of the Stockholder, the Company or the Real Property Affiliates, as applicable; (c) the written resignations of all of the current members of the Board of Directors of the Company and the Real Property Affiliates and to the extent requested by the Buyer, the officers of the Company and the Real Property Affiliates (effective as of the Closing Date); (d) the certificate required by SECTION 9.06; (e) certificates of incumbency and specimen signatures of the signatory officers of the Stockholder, the Company and the Real Property Affiliates; - 32 -

(f) a certificate of good standing of the Stockholder, the Company and the Real Property Affiliates issued by the state of New York, each such certificate to be dated as of a date not more than seven (7) days prior to the Closing Date; (g) the certificate of incorporation, bylaws, minute books and stock books of the Company and the Real Property Affiliates and all other books and records reasonably requested by the Buyer; (h) the legal opinion described in SECTION 9.09; (i) the Guaranty, duly executed by Stockholder Guarantor; (j) (A) all books and records of the Company and the Real Property Affiliates held by the Stockholder and any of its Affiliates, including, without limitation, minute books, or other registers, books of account, Company Agreements, all data, information, books, operating records, operating, safety and maintenance manuals, engineering and design plans, blueprints and as-built plans, specifications, drawings, reports, procedures, facility compliance plans, test records and results (including tests performed in accordance with NYISO and NYSRC rules), other records and filings made with regulatory agencies regarding operations at the Generating Facilities, environmental procedures and similar records of Stockholder necessary for the operation of the Generating Facilities, to the extent in the Stockholder's possession or readily available, other than such items that are proprietary to third parties and accounting records (collectively, the "OPERATING RECORDS"), and (B) all personnel files relating to the employees, to the extent in the Stockholder's possession and including files pertaining to (1) skill and development training and resumes, (2) seniority histories, (3) salary and benefit information, (4) Occupational Safety and Health Act medical reports, (5) medical records and restriction forms, (6) performance evaluations, and (7) disciplinary records (collectively, the "TRANSFERRED EMPLOYEE RECORDS"); PROVIDED, HOWEVER, that (x) the Stockholder shall be permitted to retain copies, or originals to the extent it provides Buyer with copies of same, of all Operating Records and Transferred Employee Records, and (y) the Stockholder shall cooperate with Buyer to transfer all electronic Operating Records and Transferred Employee Records in a format that is reasonably acceptable to and useable by Buyer; (k) (i) the monthly UCAP determinations for each of the Generating Facilities from NYISO from and including November 2001 to Closing, and (ii) the monthly Generator Availability Data System event logs for the 14-month period prior to Closing; (l) executed instruments of assignment with respect to the Agreements listed on Disclosure Schedule 4.23 (b); (m) an instrument of assignment and assumption as shall, in the reasonable opinion of the Buyer, be necessary for the Stockholder to obtain the right and claims and assume the liabilities and obligations set forth in Schedule 4.19 (b) of the Disclosure Schedule; and - 33 -

(n) all such other documents, instruments and certificates as may be reasonably requested by Buyer to effectuate the transactions contemplated hereby. 10.03 DELIVERIES BY THE BUYER At the Closing, the Buyer shall deliver the following: (a) the Purchase Price as set forth in SECTION 2.02; (b) a certified copy (i) of the resolutions adopted by the Board of Directors of the Buyer authorizing the transactions contemplated by this Purchase Agreement and (ii) the articles of incorporation and the bylaws of the Buyer; (c) certificates of incumbency and specimen signatures of the signatory officers of the Buyer; (d) a certificate of active status of the Buyer issued by the state of Wisconsin dated as of a date not more than seven (7) days prior to the Closing Date; (e) the certificate required by SECTION 8.03; and (f) the legal opinion described in SECTION 8.05. 11. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES 11.01 SURVIVAL OF REPRESENTATIONS All representations, warranties, covenants, indemnities and other Agreements made by any party to this Purchase Agreement herein or pursuant hereto, or made pursuant to any Disclosure Schedule, shall be deemed made on and as of the Closing Date as though such representations, warranties, covenants, indemnities and other Agreements were made on and as of such date, and all such representations, warranties, covenants, indemnities and other Agreements shall survive the Closing and any investigation, audit or inspection at any time made by or on behalf of any party hereto, as follows: (a) unless otherwise specified herein below, representations and warranties shall survive for a period of twelve (12) months after the Closing Date; (b) representations and warranties with respect to Taxes shall survive until the expiration of the applicable statute of limitations; (c) representations, warranties and covenants for matters relating to title to the capital stock of the Company shall continue in full force and effect in perpetuity; (d) representations, warranties and covenants for matters relating to title to the Company's Assets shall continue in full force and effect for a period of two (2) years after the Closing Date; (e) representations, warranties and covenants with respect to the Environmental Laws shall survive for a period of four (4) years after the Closing Date; subject to Section 11.04 below; (f) the representations in Section 4.11 shall not survive the Closing and (g) the covenants and agreements in this ARTICLE 11 and the covenants and agreements which by their terms survive - 34 -

Closing shall continue in full force and effect until fully discharged. Notwithstanding anything herein to the contrary, any representation, warranty, covenant or Agreement which is the subject of a claim which is asserted in writing prior to the expiration of the applicable period set forth above shall survive with respect to such claim or dispute until the final resolution thereof. 11.02 AGREEMENT OF STOCKHOLDER TO INDEMNIFY Subject to the conditions and provisions of this ARTICLE 11, the Stockholder hereby agrees to indemnify, defend and hold harmless the Buyer Indemnified Persons from and against and in respect of all Losses resulting from, imposed upon or incurred by the Buyer Indemnified Persons, directly or indirectly, by reason of or resulting from: (a) any misrepresentation or breach of any representation or warranty, or noncompliance with any covenants or other Agreements, given or made by the Stockholder in this Purchase Agreement or in the Disclosure Schedules or Exhibits attached hereto or in any Document furnished by or on behalf of any such party pursuant to this Purchase Agreement; (b) any arrangements between the Company and/or the Stockholder and any broker, finder, agent or similar advisor in connection with the transactions contemplated by the Purchase Agreement, and any claim for fees or other amounts arising out of any such arrangement or alleged arrangement; and (c) any claims made under any Agreements or arrangements between the Stockholder and/or the Company and any former officer, director or stockholder of the Company that were entered into prior to the Closing Date; PROVIDED, HOWEVER, that, except for (x) Losses arising out of a willful or intentional breach of representations, warranties or covenants by the Company or the Stockholder, (y) Losses arising out of any breach of representations or warranties for matters relating to title to the capital stock of the Company, and (z) any liabilities or obligations in respect of (i) Taxes of the Company or any Subsidiary for taxable periods (or portions thereof) beginning before and ending on or before the Closing Date, and (ii) Taxes payable by the Company or any Subsidiary solely by reason of being severally liable for the tax of the Stockholder or any Tax Affiliate of the Stockholder pursuant to Treasury Regulation Section 1.1502-6 or any analogous state or local tax law, none of which shall be subject to the following limitations, the Stockholder shall not have any liability under SECTION 11.02(a) except to the extent that the aggregate amount of claims for Losses asserted under such Section exceeds One Hundred Thousand Dollars ($100,000); PROVIDED, FURTHER, HOWEVER, in no event shall the aggregate amount of liability of the Stockholder for Losses asserted under SECTION 11.02(a) (except for Losses arising out of a willful or intentional breach of representations, warranties or covenants by the Company, or the Stockholder, and Losses arising out of any breach of representations or warranties for matters relating to title to the capital stock of the Company), exceed Six Million Dollars ($6,000,000). It shall be a condition to the right of any Buyer Indemnified Person to indemnification pursuant to this Section that such Buyer Indemnified Person shall assert a claim for such indemnification within the applicable survival periods set forth in SECTION 11.01 hereof. Notwithstanding the foregoing, the Stockholder shall indemnify Buyer from the first dollar of Losses in connection with the OSHA litigation matter set forth in Disclosure Schedule 4.19(a) even if such Losses are less than One Hundred Thousand Dollars ($100,000). - 35 -

11.03 AGREEMENT OF THE BUYER TO INDEMNIFY Subject to the conditions and provisions of this ARTICLE 11, the Buyer hereby agrees to indemnify, defend and hold harmless the Stockholder Indemnified Persons from and against and in respect of all Losses resulting from, imposed upon or incurred by the Stockholder Indemnified Persons, directly or indirectly, by reason of or resulting from any misrepresentation or breach of any representation or warranty, or noncompliance with any covenants or other Agreements, given or made by the Buyer in this Purchase Agreement or in the Exhibits or in any Document furnished by or on behalf of the Buyer pursuant to this Purchase Agreement; PROVIDED, HOWEVER, that, except for Losses arising out of a willful or intentional breach of representations, warranties or covenants by the Buyer, none of which shall be subject to the following limitations, the Buyer shall have no liability under this SECTION 11.03 until the aggregate amount of claims for Losses asserted under such Section exceeds One Hundred Thousand Dollars ($100,000); PROVIDED, FURTHER, HOWEVER, in no event shall the aggregate amount of liability of the Buyer for Losses asserted under this SECTION 11.03 (except for Losses arising out of a willful or intentional breach of representations, warranties or covenants by the Buyer), exceed Six Million Dollars ($6,000,000). It shall be a condition to the rights of the Stockholder Indemnified Persons to indemnification pursuant to this Section that such parties shall assert a claim for such indemnification within the applicable survival periods set forth in SECTION 11.01 hereof. 11.04 SHARED ENVIRONMENTAL COSTS. Subject to the conditions and provisions of this Article 11 and the specific aggregate thresholds and limits established in this Section 11.04, the Buyer and the Stockholder hereby agree to share Environmental Costs arising as a result of pre-Closing operations of the Assets and arising during the period of four years after the date of Closing ("SHARED ENVIRONMENTAL COSTS") as follows: all Environmental Costs arising during (a) year one shall be shared 50% by Stockholder and 50% by Buyer; (b) year two shall be shared 50% by Stockholder and 50% by Buyer; (c) year three shall be shared 33% by Stockholder and 67% by Buyer; (d) year four shall be shared 17% by Stockholder and 83% by Buyer, and (e) year five and thereafter shall be 100% Buyer's liability. Environmental Costs shall not be deemed Shared Environmental Costs until the aggregate of all Environmental Costs shall exceed five hundred thousand dollars ($500,000). Stockholder's obligation to share Environmental Costs shall accrue for those Environmental Costs in excess of five hundred thousand dollars ($500,000) and shall not under any circumstances exceed an aggregate amount of four million dollars ($4,000,000). 11.05 CONDITIONS OF INDEMNIFICATION The obligations and liabilities of the Stockholder and the Buyer hereunder with respect to their respective indemnities pursuant to this ARTICLE 11, resulting from any Third Party Claim shall be subject to the following terms and conditions: (a) The party seeking indemnification (the "INDEMNIFIED PARTY") must give the other party (the "INDEMNIFYING PARTY") notice of any Third Party Claim which is asserted against, resulting to, imposed upon or incurred by the Indemnified Party and which may give rise to - 36 -

liability of the Indemnifying Party pursuant to this ARTICLE 11, stating (to the extent known or reasonably anticipated) the nature and basis of such Third Party Claim and the amount thereof; PROVIDED that the failure to give such notice shall not affect the rights of the Indemnified Party hereunder except to the extent that the Indemnifying Party shall have suffered actual material damage by reason of such failure. (b) Subject to SECTION 11.05(C) below, the Indemnifying Party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense of such Third Party Claim at the Indemnifying Party's risk and expense. (c) In the event that (i) the Indemnifying Party shall elect not to undertake such defense, (ii) within a reasonable time after notice from the Indemnified Party of any such Third Party Claim, the Indemnifying Party shall fail to undertake to defend such Third Party Claim, (iii) there is a reasonable probability that such Third Party Claim may materially and adversely affect the Indemnified Party other than as a result of money damages or other money payments, or (iv) there is a reasonable probability that the amount of Losses asserted under such Third Party Claim may exceed the Indemnifying Party's obligations under this ARTICLE 11, then the Indemnified Party (upon further written notice to the Indemnifying Party) shall have the right to undertake the defense, compromise or settlement of such Third Party Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the Indemnifying Party; PROVIDED, HOWEVER, that if the Indemnified Party undertakes defense of such Third Party Claim under clause (iv) above, the Indemnified Party shall not, without the Indemnifying Party's written consent (which consent shall not be unreasonably withheld), settle such Third Party Claim if the Indemnifying Party will be responsible for any amounts under such settlement. In the event that the Indemnified Party undertakes the defense of a Third Party Claim under this SECTION 11.05(C), the Indemnifying Party shall pay to the Indemnified Party, in addition to the other sums required to be paid hereunder, the reasonable costs and expenses incurred by the Indemnified Party in connection with such defense, compromise or settlement as and when such costs and expenses are so incurred. (d) Anything in this SECTION 11.05 to the contrary notwithstanding, (i) the Indemnifying Party shall not, without the Indemnified Party's written consent, settle or compromise such Third Party Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party of a release from all liability in respect of such Third Party Claim in form and substance satisfactory to the Indemnified Party; (ii) in the event that the Indemnifying Party undertakes defense of such Third Party Claim, the Indemnified Party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to participate in the defense, compromise or settlement thereof and each party and its counsel and other representatives shall cooperate with the other party and its counsel and representatives in connection therewith; and (iii) in the event that the Indemnifying Party undertakes defense of such Third Party Claim, the Indemnifying Party shall have an obligation to keep the Indemnified Party informed of the status of the defense of such Third Party Claim and furnish the Indemnified Party with all documents, instruments and information that the Indemnified Party shall reasonably request in connection therewith. - 37 -

(e) With respect to the indemnification obligations set forth in Section 11.04 regarding Environmental Costs which become Shared Environmental Costs, the Parties shall cooperate to effectuate the successful completion of remediation or corrective action in compliance with Environmental Laws. The Buyer shall control and lead all such remediation or corrective actions which give rise to Shared Environmental Costs. Upon discovery of any condition it reasonably believes will require remediation or corrective action giving rise to Shared Environmental Costs, Buyer shall promptly notify and afford Stockholder an opportunity to review and approve its proposed remediation or corrective actions, which Stockholder approval shall not be unreasonably withheld. 11.06 REMEDIES CUMULATIVE The remedies provided herein shall be cumulative and shall not preclude the assertion by the Stockholder or the Buyer of any other rights or the seeking of any other remedies against the other, or their respective successors or assigns. 12. TAX MATTERS 12.01 SECTION 338(H)(10) ELECTION At Buyer's request, the Stockholder shall join with Buyer in making an election under Section 338(h)(10) of the Code (and any corresponding election under state, local or foreign tax law) with respect to the purchase and sale of stock of the Company (the "SECTION 338(H)(10) ELECTION") in form and substance satisfactory to the Buyer. Buyer shall be responsible for the filing of any Form 8023 or analogous, ancillary or supporting forms, documents and statements under state, local or foreign law to make the Section 338(h)(10) Elections (the "SECTION 338 FORMS"). The Stockholder will include any income, gain, loss, deduction, or other tax item resulting from the Section 338(h)(10) Election on its Tax Returns to the extent required by applicable Laws. The Stockholder shall also pay any Tax liability imposed on the Company attributable to or in any way arising from the making of the Section 338(h)(10) Election, including, but not limited to, (a) any Tax imposed under Reg. ss. 1.338(h)(10)-1, or (b) any state, local or foreign Tax imposed on the Company's gain, and the Stockholder shall indemnify Buyer and the Company against any Losses arising out of any failure to pay the Taxes attributable to the Company. 12.02 ALLOCATION OF PURCHASE PRICE Buyer, the Company and the Stockholder agree that the Purchase Price and the liabilities of the Company (plus other relevant items) will be allocated to the Assets of the Company for all purposes (including Tax and financial accounting) in accordance with their fair market values as reasonably determined by Buyer in accordance with the applicable rules of Section 338 of the Code and the regulations thereunder and consented to by the Stockholder (which consent shall not be unreasonably withheld), which allocation shall be binding upon the - 38 -

parties. Within ninety (90) days following the Closing, Buyer and the Stockholder shall agree on a list of assets to which the "Aggregate Deemed Sales Price" (as defined under applicable Treasury Regulations) of the assets of the Company shall be allocated. All allocations contained in such schedule shall be used by each party in preparing the Section 338 Forms and all relevant Tax Returns (including amended returns and claims for refund), subject to adjustment to reflect (a) Stockholder's selling expenses as a reduction of sales proceeds, and (b) Buyer's acquisition expenses as an addition to the Purchase Price. In the event that the parties cannot agree on mutually satisfactory allocations within said time period, the Independent Accounting Firm shall, at Stockholder's and Buyer's joint and equal expense, determine the appropriate allocations based solely on presentations of Buyer and Stockholder (and not by independent review) within sixty (60) days of its engagement. The allocations determined by the Independent Accounting Firm shall be binding on the parties. The parties shall take no action inconsistent with, or fail to take any action necessary for the validity of the Section 338(h)(10) Election, and shall adopt and utilize the asset values determined in making such allocations for the purpose of all Tax Returns filed by them, and shall not voluntarily take any action inconsistent therewith upon examination of any Tax Return, in any refund claim, in any litigation or otherwise with respect to such Tax Returns. Buyer and Stockholder shall notify and provide the other with reasonable assistance in the event of an examination, audit or other proceeding regarding the agreed upon allocations. 12.03 TAX RETURNS AND PAYMENTS The Stockholder shall prepare or cause to be prepared and/or cause to be filed all Tax Returns for the Company and each Subsidiary for all Tax periods ending on or prior to the Closing Date ("PRE-CLOSING PERIODS") which are due after the Closing Date, including (without limitation) the Tax Returns on which the deemed assets sales resulting from the Section 338(h)(10) Election are reported. Such returns shall be prepared in a manner consistent with the Company's prior practice. The income or loss shall be reported on the Tax Return to be filed for the Company and the Subsidiaries for the period that begins January 1, 2002 and ends on the Closing Date, consistent with Treasury Regulation Section 1.1502-76(b). At least fifteen (15) days prior to the filing of each such return, the Stockholder shall provide the return to the Buyer for its review and comment and the Stockholder shall make such revisions to such return as are reasonably requested by the Buyer. Stockholder shall be responsible for payment of any Taxes for any Pre-Closing Periods, and shall be entitled to any refunds or credits shown on such returns necessary to conform the Tax Return with the preceding sentence or to be consistent with applicable Law and shall provide the Tax Return, as revised, to the Buyer for filing. The Buyer shall prepare or cause to be prepared and the Buyer shall timely file or cause to be filed any Tax Returns of the Company for Tax periods which begin before the Closing Date and end after the Closing Date (the "STRADDLE PERIODS"). Such Tax Returns shall be prepared in a manner consistent with the Company's prior practice to the extent consistent with applicable Laws. At least fifteen (15) days prior to the filing of each such Tax Return with respect to Straddle Periods, the Buyer shall provide copies of such Tax Return to the Stockholder for the Stockholder's review and comment and the Buyer shall make such revisions to such Tax Returns as are reasonably requested by the Stockholder. For returns relating to the Straddle Periods, the Stockholder shall pay to the Buyer within fifteen (15) days after the date on which Taxes are paid the portion of such Taxes which relates to the portion of such Taxable period ending on the - 39 -

Closing Date in excess of any reserve for such Tax liability (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) shown on the balance sheet in the Financial Statements (such excess "STRADDLE PERIOD TAXES"). Such Straddle Period Taxes shall be calculated as though the taxable year of the Company terminated as of the close of business on the Closing Date; PROVIDED, HOWEVER, that in the case of a Tax not based on income, receipts, proceeds, profits or similar items, such Straddle Period Taxes shall be equal to the amount of Tax for the taxable period multiplied by a fraction, the numerator of which shall be the number of days from the beginning of the taxable period through the Closing Date and the denominator of which shall be the number of days in the taxable period. After the Closing, Buyer shall not amend any Tax Returns filed before the Closing without Stockholder's consent. 12.04 COOPERATION ON TAX MATTERS (a) The Buyer and the Stockholder shall cooperate fully with each other and with each party's accounting firms and legal counsel, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this SECTION 12 and any audit, litigation or other proceeding with respect to Taxes or pertaining to the transactions contemplated by this Agreement. Such cooperation shall include the retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such filing, audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Stockholder agrees (i) to retain all books and records with respect to Tax matters pertinent to each of the Company and each Subsidiary relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Buyer or the Stockholder, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests the Stockholder shall allow the other party to take possession of such books and records prior to such transfer, destruction or discarding. (b) The Buyer and the Stockholder further agree, upon request, to use their reasonable best efforts to obtain any certificate or other document from any Governmental Authority or any other person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby). 12.05 CERTAIN TAXES Except as otherwise agreed, all transfer, documentary, sales, use, stamp, registration and other such Taxes and fees (including any penalties and interest) incurred in connection with this Purchase Agreement (including, but not limited to any real estate transfer tax, sales and use tax, mortgage recording tax, and any other city transfer tax or any similar tax imposed in other states or subdivisions), shall be paid by the Buyer when due. Subject to the preceding sentence, the party required by applicable law shall file all necessary Tax Returns and - 40 -

other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other Taxes and fees, and, if required by applicable Laws, the other party or its Affiliates will join in the execution of any such Tax Returns and other documentation. 12.06 TAX SHARING AGREEMENTS The obligations and liabilities of the Company and any Subsidiary to the Stockholder and its other Tax Affiliates, and the obligations of Stockholder and all its other Tax Affiliates to the Company and any Subsidiary, under the Central Hudson Group Federal Income Tax Allocation Agreement shall be terminated as of the Closing Date. 12.07 CONTESTS (a) Stockholder and the Buyer shall notify the other party in writing within thirty (30) days of receipt of written notice of any pending or threatened tax examination, audit or other administrative or judicial proceeding (a "TAX CONTEST") that could reasonably be expected to result in an indemnification obligation of such other party pursuant to this Agreement. If the recipient of such notice of a Tax Contest fails to provide such notice to the other party, it shall not be entitled to indemnification for any Taxes arising in connection with such Tax Contest, but only to the extent, if any, that such failure or delay shall have adversely affected the indemnifying party's ability to defend against, settle, or satisfy any action, suit or proceeding against it, or any damage, loss, claim or demand for which the indemnified party is entitled to indemnification hereunder. (b) If a Tax Contest relates to any Taxes for which the Stockholder is liable in full hereunder, the Stockholder shall, at its expense, control the defense and settlement of such Tax Contest. If such Tax Contest relates to any Taxes for which Buyer is liable in full hereunder, Buyer shall, at its own expense, control the defense and settlement of such Tax Contest. The party not in control of the defense shall have the right to observe the conduct of any Tax Contest at its expense, including through its own counsel and other professional experts. Buyer and the Stockholder shall jointly represent the Company or any Subsidiary in any Tax Contest relating to Taxes for which both are liable hereunder, and fees and expenses related to such representation shall be paid by the Buyer and the Stockholder in proportion to their respective liabilities. (c) Notwithstanding anything to the contrary in Section 12.06(b), to the extent that an issue raised in any Tax Contest controlled by one party or jointly controlled could materially affect the liability for Taxes of the other party, the controlling party shall not, and neither party in the case of joint control shall, enter into a final settlement without the consent of the other party, which consent shall not be unreasonably withheld. Where a party withholds its consent to any final settlement, that party may continue to initiate further proceedings, at its own expense, and the liability of the party that wished to settle (as between the consenting and non-consenting party) shall not exceed the liability that would have resulted from the proposed final settlement including interest, additions to Tax, and penalties that have accrued at that time, and the non-consenting party shall indemnify the consenting party for such Taxes. - 41 -

(d) Notwithstanding any other provision of this Agreement to the contrary, if a Tax Contest results in an increase in Taxes for which the Stockholder is liable hereunder, and such increase is attributable to adjustments based on timing differences which will reverse in taxable periods ending subsequent to the Closing Date, and, Buyer shall pay to the Stockholder, upon the Stockholder's request, an amount equal to the present value of the reduction in Taxes payable by the Buyer and its Affiliates in future taxable periods by reason of such reversal, determined by using a discount rate of 12% and an assumed tax rate of 40%, and by assuming that such reduction in Taxes will occur in the year or years of reversal. 12.08 DISPUTES In the event that a dispute arises between the Stockholder and the Buyer as to the amount of Taxes, or indemnification with respect to Taxes (whether or not attributable to the Company), the parties shall attempt in good faith to resolve such dispute, and any agreed upon amount shall be paid to the appropriate party. If such dispute is not resolved thirty (30) days thereafter, the parties shall submit the dispute to the Independent Accounting Firm for resolution, which resolution shall be final, conclusive and binding on the parties. Notwithstanding anything in this Agreement to the contrary, the fees and expenses of the Independent Accounting Firm in resolving the dispute shall be borne in proportion to the determination of the Independent Accounting Firm. Any payment required to be made as a result of the resolution of the dispute by the Independent Accounting Firm shall be made within ten (10) days after such resolution (together with any interest determined by the Independent Accounting Firm to be appropriate). 13. TERMINATION 13.01 TERMINATION This Purchase Agreement may be terminated at any time before the Closing Date under any one or more of the following circumstances: (a) by the mutual written consent of all of the parties hereto; (b) by the Buyer or the Stockholder, by written notice of termination delivered to the other parties if the Closing shall not have occurred prior to June 21, 2003; PROVIDED, HOWEVER, that the right to terminate this Purchase Agreement under this SECTION 13.01(B) shall not be available to any party whose breach of representations, warranties, covenants or agreements contained in this Purchase Agreement has been the cause of, or resulted in, the failure of the Closing to occur by such date; (c) by the Buyer if the Stockholder shall have breached, or failed to comply with, in any material respect any of its material obligations under this Purchase Agreement or any representation or warranty made by the Stockholder shall have been incorrect in any material respect when made or shall have since ceased to be true and correct in any material respect, and such breach, failure or misrepresentation is not cured within thirty (30) days after notice thereof; - 42 -

(d) by the Stockholder if the Buyer shall have breached, or failed to comply with, in any material respect any of its material obligations under this Purchase Agreement or any representation or warranty made by the Buyer shall have been incorrect in any material respect when made or shall have since ceased to be true and correct in any material respect, and such breach, failure or misrepresentation is not cured within thirty (30) days after notice thereof; and (e) by the Buyer or the Stockholder if any decree, permanent injunction, judgment, order or other action by any court of competent jurisdiction or any governmental or regulatory authority preventing or prohibiting consummation of the transactions under this Purchase Agreement shall have become final and non-appealable. 13.02 EFFECT OF TERMINATION In the event this Purchase Agreement is terminated as provided in this ARTICLE 13, this Purchase Agreement shall forthwith become wholly void and of no effect, and the parties shall be released from all future obligations hereunder; PROVIDED, HOWEVER, that the obligations of the parties as to confidentiality provided in SECTION 3.02 and the provisions of SECTION 14.03 relating to the payment of expenses, shall not be extinguished but shall survive such termination, and nothing herein shall relieve any party for any breach of this Agreement. The parties hereto shall have any and all remedies to enforce such obligations provided at law or in equity (including, without limitation, specific performance). 14. MISCELLANEOUS 14.01 ADDITIONAL ACTIONS AND DOCUMENTS Each of the parties hereto hereby agrees to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed, delivered and filed such further Documents as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Purchase Agreement. 14.02 BROKERS (a) The Stockholder represents and warrants to the Buyer that, except as set forth in the Disclosure Schedule, it has not (i) engaged any broker, finder or agent in connection with the transactions contemplated by this Purchase Agreement or (ii) incurred (or will incur) any unpaid liability to any broker, finder or agent for any brokerage fees, finders' fees or commissions, with respect to the transactions contemplated by this Purchase Agreement. (b) The Buyer represents and warrants to the Stockholder that, except for PricewaterhouseCoopers Securities LLC, which is acting for and at the expense of the Buyer, the Buyer has not (i) engaged any broker, finder or agent in connection with the transactions contemplated by this Purchase Agreement or (ii) incurred (and will not incur) any unpaid liability - 43 -

to any broker, finder or agent for any brokerage fees, finders' fees or commissions, with respect to the transactions contemplated by this Purchase Agreement. (c) Each party agrees to indemnify, defend and hold harmless each of the other parties from and against any and all claims asserted against such parties for any fees or commissions other than those set forth in this Section by any persons purporting to act or to have acted for or on behalf of the indemnifying party. 14.03 EXPENSES All costs, fees and Taxes (except as otherwise provided in Section 12.01 hereof in connection with the Section 338(h)(10) Election) imposed by any Governmental Authority in connection with the transactions contemplated hereby shall be borne by the Buyer, including without limitation, transfer and recording taxes. Subject to the foregoing and to the provisions of ARTICLE 11, each party hereto shall pay its own expenses incident to this Purchase Agreement and the transactions contemplated hereby, including all legal and accounting fees and disbursements. 14.04 ASSIGNMENT No party shall assign its rights and obligations under this Purchase Agreement, in whole or in part, whether by operation of law or otherwise, without the prior written consent of the other parties hereto, and any such assignment contrary to the terms hereof shall be null and void and of no force and effect. In no event shall the assignment by any party of its respective rights or obligations under this Purchase Agreement, whether before or after the Closing, release such party from its respective liabilities and obligations hereunder. Notwithstanding the foregoing, (i) Buyer may assign or otherwise transfer its rights under this Purchase Agreement to any bank, financial institution or other lender providing financing to Buyer, as collateral security for such financing and (ii) Buyer may assign all of its rights and obligations under this Purchase Agreement to any wholly-owned Subsidiary (direct or indirect) upon written notice to the Stockholder of any such assignment; provided, however, that no such assignment shall (x) impair or materially delay the consummation of the transactions contemplated hereby or (y) relieve or discharge Buyer from any of its obligations hereunder. 14.05 ENTIRE AGREEMENT; AMENDMENT This Purchase Agreement, including the Disclosure Schedule, the Exhibits and other Documents referred to herein or furnished pursuant hereto, constitute the entire Agreement among the parties hereto with respect to the transactions contemplated herein, and supersede all prior oral or written Agreements, commitments or understandings with respect to the matters provided for herein. No amendment, modification or discharge of this Purchase Agreement shall be valid or binding unless set forth in writing and duly executed and delivered by the party against whom enforcement of the amendment, modification, or discharge is sought. - 44 -

14.06 WAIVER No delay or failure on the part of any party hereto in exercising any right, power or privilege under this Purchase Agreement or under any other Documents furnished in connection with or pursuant to this Purchase Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. 14.07 CONSENT TO JURISDICTION (a) This Purchase Agreement and the duties and obligations of the parties hereunder and under each of the Documents referred to herein shall be enforceable against any party in the federal or state courts sitting in the State of New York. For such purpose, each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of such courts, and agrees that all claims in respect of this Purchase Agreement and such other Documents may be heard and determined in any of such courts. Neither party shall make any objection to the venue of such courts and each party hereby waives the right to assert that such courts constitute an inconvenient forum. (b) Each party hereto hereby irrevocably agrees that a final judgment of any of the courts specified above in any action or proceeding relating to this Purchase Agreement or to any of the other Documents referred to herein or therein shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. 14.08 SEVERABILITY If any part of any provision of this Purchase Agreement or any other Agreement or document given pursuant to or in connection with this Purchase Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or the remaining provisions of this Purchase Agreement. 14.09 GOVERNING LAW This Purchase Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of New York (excluding the choice of law rules thereof). - 45 -

14.10 NOTICES All notices, demands, requests, or other communications which may be or are required to be given, served, or sent by any party to any other party pursuant to this Purchase Agreement shall be in writing and shall be hand delivered, sent by overnight courier or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telegram, telecopy or telex, addressed as follows: (a) If to the Buyer: WPS Power Development, Inc. 1088 Springhurst Drive Green Bay, WI 54304 Attention: Charles A. Schrock, President Facsimile No.: 920-617-6140 with a copy (which shall not constitute notice) to: WPS Power Development, Inc. 1088 Springhurst Drive Green Bay, WI 54304 Attention: B. Frank Moon Facsimile No.: 920-617-6140 with a copy (which shall not constitute notice) to: Foley & Lardner 777 E. Wisconsin Ave. Milwaukee, WI 53202 Attention: Edward J. Hammond, Esq. Facsimile No.: 414-297-4900 (b) If to the Stockholder: Central Hudson Energy Services, Inc. 110 Main Street Poughkeepsie, NY 12601 Attention: Allan R. Page Facsimile No.: 845-473-7316 - 46 -

with a copy (which shall not constitute notice) to: Winston & Strawn 1400 L Street, N.W. Washington, DC 20005-3502 Attention: Donald K. Dankner Facsimile No.: (202) 371-5950 Each party may designate by notice in writing a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be hand delivered, sent, mailed, telecopied or telexed in the manner described above, or which shall be delivered to a telegraph company, shall be deemed sufficiently given, served, sent, received or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or (with respect to a telecopy or telex) the answerback being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation. 14.11 HEADINGS Article and Section headings contained in this Purchase Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Purchase Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof. 14.12 EXECUTION IN COUNTERPARTS To facilitate execution, this Purchase Agreement may be executed in as many counterparts as may be required. It shall not be necessary that the signatures of, or on behalf of, each party, or that the signatures of all persons required to bind any party, appear on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single Agreement. It shall not be necessary in making proof of this Purchase Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto. 14.13 LIMITATION ON BENEFITS The covenants, undertakings and agreements set forth in this Purchase Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and permitted assigns, except that the agreements set forth in ARTICLE 10 also shall be for the benefit of, and enforceable by, the Buyer Indemnified Persons and their respective successors, heirs, executors, administrators, legal representatives or permitted assigns. - 47 -

14.14 BINDING EFFECT Subject to any provisions hereof restricting assignment, this Purchase Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs, executors, administrators, legal representatives and assigns. IN WITNESS WHEREOF, the parties hereto have duly executed this Stock Purchase Agreement, or have caused this Stock Purchase Agreement to be duly executed on their behalf, as of the day and year first above written. BUYER: WPS POWER DEVELOPMENT, INC. By: Name:

Title: STOCKHOLDER: CENTRAL HUDSON ENERGY SERVICES, INC. By: Name:

Title: - 48 -

EXHIBIT A TO THE STOCK PURCHASE AGREEMENT DEFINITIONS "ADJUSTMENT STATEMENT" has the meaning set forth in SECTION 2.03 (b) of the Purchase Agreement. "AFFILIATE" means: (a) with respect to an individual person, any member of such person's immediate family, consisting of such person's spouse or children; (b) with respect to an entity, any officer or director of such entity; and (c) with respect to an individual person or entity, any person or entity which directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with such person or entity. "AGREEMENT" means any binding agreement (including any and all exhibits or attachments thereto) between two or more persons (or entities) with respect to their relative rights and/or obligations or with respect to a thing done or to be done. "ALTA" means American Land Title Association. "ARTICLE" means an Article of this Purchase Agreement. "ASSETS" means assets of every kind and everything that is or may be available for the payment of liabilities (whether inchoate, tangible or intangible), including, without limitation, real and personal property. Solely for purposes of this Purchase Agreement, Assets of the Real Property Affiliates shall be deemed Assets of the Company. "BALANCE SHEET DATE" means September 30, 2001 "BUYER" means WPS Power Development, Inc., a Wisconsin corporation. "BUYER DEFINED CONTRIBUTION PLAN" has the meaning set forth in SECTION 6.01(A) of the Purchase Agreement. "BUYER INDEMNIFIED PERSONS" means the Buyer and its officers, directors and employees. "CENTRAL HUDSON GROUP FEDERAL INCOME TAX ALLOCATION AGREEMENT" means that certain Central Hudson Group Federal Income Tax Allocation Agreement dated as of December 31, 1998 by and among Central Hudson Gas & Electric Corporation and the corporations identified on Exhibit A thereto. "CLOSING" means the closing of the sale and purchase of shares of the Company's capital stock pursuant to this Purchase Agreement.

"CLOSING DATE" means 10:00 a.m. local time on the date on which the satisfaction or, if permissible, waiver of the closing conditions set forth in ARTICLES 8 AND 9 occurs, or such other time and such date as shall be mutually agreed upon by the Buyer and the Stockholder. "CLOSING DATE PURCHASE PRICE ADJUSTMENT" means the Closing Date price adjustment as set forth in SCHEDULE 2.03(A). "COMMERCIALLY REASONABLE EFFORTS" means efforts which are reasonably necessary to cause, or assist in, the consummation of the transactions contemplated by this Agreement and which do not require the performing party to expend funds, incur expenses or assume liabilities other than those which are reasonable in nature and amount within the context of the transactions contemplated by this Agreement in order for the performing party to satisfy its obligations hereunder. "CODE" means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder. "COMPANY" means CH Resources, Inc., a New York corporation. "CONTROL" means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities, by Agreement or otherwise). "DEFINED BENEFIT PLAN" means a Plan that is or was a "defined benefit plan" as such term is defined in Section 3(35) of ERISA. "DISCLOSURE SCHEDULE" means the disclosure schedule identified as the Disclosure Schedule to the Purchase Agreement. The sections of the Disclosure Schedule shall be numbered to correspond to the applicable Section of this Purchase Agreement and together with all matters under such heading, shall be deemed to qualify the applicable Section and any other Section, subsection or clause hereof to which such disclosure clearly relates. "DISPUTE NOTICE" has the meaning set forth in SECTION 2.03 (c) of the Purchase Agreement. "DOCUMENTS" means any written or similar material (including, without limitation, computer storage media) on which is recorded (by letters, numbers or other marks) information, including, without limitation, legal opinions, mortgages, indentures, notes, instruments, leases, Agreements, insurance policies, reports, studies, financial statements (including, without limitation, the notes thereto), other written financial information, schedules, certificates, charts, maps, plans, letters, memoranda and all similar materials. "DOL" means the Department of Labor or its successors. -ii-

"EMISSION ALLOWANCE" means an authorization by any Governmental Authority to emit a specified amount of nitrogen oxide ("NOx") or sulfur dioxide ("SO2") from a specified source during or after a specified time frame. "ENCUMBRANCE" means any mortgage, lien, pledge, encumbrance, security interest, deed of trust, option, encroachment, reservation, order, decree, judgment, restriction, charge, Agreement, claim or equity of any kind. "ENVIRONMENTAL CLAIMS" has the meaning set forth in SECTION 4.22 (b) of the Purchase Agreement. " ENVIRONMENTAL COSTS" has the meaning set forth in the SECTION 6.02 (a) of the Purchase Agreement. "ENVIRONMENTAL LAWS" means any Laws (including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act), including any regulations promulgated pursuant to such Laws, now in effect relating to the generation, production, installation, use, storage, treatment, transportation, release, threatened release, or disposal of Hazardous Materials, noise control, or the protection of human health or the environment. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all Laws promulgated pursuant thereto or in connection therewith. "ERISA AFFILIATE" means any entity which is required to be aggregated with the Company in accordance with the terms of Section 414(b), (c), (m) or (o) of the Code. "ESOP" means any "employee stock ownership plan" as such term is defined in Section 407(d)(6) of ERISA or Section 4975(c)(7) of the Code. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and all regulations promulgated thereunder. "EXHIBIT" means an exhibit attached to the Purchase Agreement. "FERC" has the meaning set forth in SECTION 8.07 of the Purchase Agreement. "FINANCIAL STATEMENTS" has the meaning set forth in SECTION 4.06 of the Purchase Agreement. "FIRPTA" means Foreign Investor in Real Property Tax Act of 1980, as amended. "FORM 5500 SERIES" means Internal Revenue Service Form 5500 Annual Return/Report of Employee Benefit Plan. -iii-

"FORM 5330" has the meaning set forth in SECTION 4.21(J) of the Purchase Agreement. "GENERATING FACILITIES" means the three generating facilities owned and operated by the Company as described below: (a) Beaver Falls Generating Facility - an approximately 95 MW natural gas and oil-fired generating facility located in Crogham, New York. (b) Syracuse Generating Facility - an approximately 109 MW natural gas and oil-fired generating facility located in Solvay, New York outside of Syracuse. (c) Niagara Falls Generating Facility - an approximately 50 MW generating facility, utilizing bituminous coal, petroleum coke and potentially other fuels, located in Niagara Falls, New York. "GOVERNMENTAL AUTHORITY" means any court, administrative or regulatory agency or commission or other governmental entity or instrumentality, domestic, foreign or supranational or any department thereof. "GP MATE" means the accounting software licensed by General Physics. "GUARANTY" means that certain Guaranty by Stockholder Guarantor, to be dated the Closing Date, in the form attached hereto as Exhibit B. "HAZARDOUS MATERIALS" means any wastes, substances, radiation or materials (whether solids, liquids or gases) (i) which are defined as "pollutants", "contaminants", "hazardous wastes", "hazardous substances", "toxic substances", "radioactive materials", or other similar designations in, or otherwise subject to regulation under, any Environmental Laws; (ii) without limitation, which contain polychlorinated biphenyls (PCBs), asbestos and asbestos-containing materials, lead-based paints, urea-formaldehyde foam insulation, and petroleum or petroleum products (including, without limitation, crude oil or any fraction thereof) or (iii) which are known to the Stockholder to pose a hazard to human health, safety, natural resources, industrial hygiene, or the environment. "INDEMNIFIED PARTY" has the meaning set forth in SECTION 11.05(A) OF THE PURCHASE AGREEMENT. "INDEMNIFYING PARTY" has the meaning set forth in SECTION 11.05(A) OF THE PURCHASE AGREEMENT. "INDEPENDENT ACCOUNTING FIRM" means Ernst & Young, LLP. -iv-

"INDIVIDUAL ACCOUNT PLAN" means a Plan that is or was an "individual account plan" as such term is defined in Section 3(34) of ERISA. "INTELLECTUAL PROPERTY" means all franchises, patents, patent qualifications, trademarks, service marks, trade names, trade styles, brands, private labels, copyrights, know-how, computer software, industrial designs and drawings and general intangibles of a like nature, trade secrets, licenses, and rights and filings with respect to the foregoing, and all reissues, extensions and renewals thereof. "IRS" has the meaning set forth in SECTION 4.21 of the Purchase Agreement. "LAWS" means all foreign, federal, state and local statutes, laws, ordinances, regulations, rules, and legallybinding resolutions, orders, determinations, writs, injunctions, awards (including, without limitation, awards of any arbitrator), judgments and decrees applicable to the specified persons or entities and to the businesses and Assets thereof (including, without limitation, Laws relating to securities registration and regulation; the sale, leasing, ownership or management of real property; employment practices, terms and conditions, and wages and hours; building standards, land use and zoning; safety, health and fire prevention; and environmental protection, including Environmental Laws). "LOSSES" means all demands, losses, claims, actions or causes of action, assessments, damages, liabilities, costs and expenses, including, without limitation, interest, penalties and reasonable attorneys' fees and disbursements. "MATERIAL ADVERSE EFFECT" means a material adverse effect upon the business, operations, Assets or condition (financial or otherwise) of the Company taken as a whole. "MULTIEMPLOYER PLAN" means a "multiemployer plan" as such term is defined in Section 3(37) of ERISA. "NYISO" means (i) New York Independent System Operator and (ii) if the New York Independent System Operator is no longer the independent system operator for the bulk power transmission system, then any successor thereto performing similar functions in the State of New York, including any regional transmission organization, independent system operator, transco, and any other independent system administrator that possesses operational control over the bulk power transmission system. "NYSDEC" means New York State Department of Environmental Conservation and any successor thereto. "NYPSC" means the New York State Public Service Commission and any successor thereto. "NYSRC" means the New York State Reliability Council and any successor thereto. -v-

"OPERATING RECORDS" has the meaning set forth in SECTION 10.02 (j) of the Purchase Agreement. "ORDINARY COURSE OF BUSINESS" means ordinary course of the Company's business consistent with past practices. "OTHER ARRANGEMENT" means a benefit program or practice providing for bonuses, incentive compensation, vacation pay, severance pay, insurance, restricted stock, stock options, employee discounts, company cars, tuition reimbursement or any other perquisite or benefit (including, without limitation, any fringe benefit under Section 132 of the Code other than a de minimus fringe under Code Section 132(e)) to employees, officers or independent contractors that is not a Plan. "PENSION PLAN" means an "employee pension benefit plan" as such term is defined in Section 3(2) of ERISA. "PERMITTED LIENS" has the meaning set forth in SECTION 4.11 of the Purchase Agreement. "PERSON" means any individual, corporation (including any non-profit corporation), general or limited partnerships, limited liability company, joint venture, estate, trust, association, organization, labor union or other entity. "PLAN" means any written plan, program or arrangement, that is or was an "employee benefit plan" as such term is defined in Section 3(3) of ERISA and (a) which was or is established or maintained by the Company; (b) to which the Company contributed or was obligated to contribute or to fund or provide benefits; or (c) which provides or promises benefits to any person who performs or who has performed services for the Company and because of those services is or has been (i) a participant therein or (ii) entitled to benefits thereunder. "PUHCA" has the meaning set forth in SECTION 4.32 of the Purchase Agreement.
"PRE-CLOSING of the Purchase Agreement. PERIODS" has the meaning set forth in SECTION 12.03

"PURCHASE AGREEMENT" means this Stock Purchase including the Disclosure Schedules and all Exhibits hereto.

Agreement,

"PURCHASE PRICE" has the meaning set forth in SECTION 2.02 of the Purchase Agreement. "QUALIFIED PLAN" means a Pension Plan that satisfies or is intended to satisfy, the requirements for tax qualification described in Section 401 of the Code. "REAL PROPERTY" means the portions of real property (and all improvements thereon) leased or used by the Company or Real Property Affiliates (including appurtenant easements). -vi-

"REAL PROPERTY AFFILIATES" means CH Syracuse Properties, Inc., a New York corporation and wholly owned non-regulated subsidiary of the Stockholder and CH Niagara Properties, Inc. a New York corporation and wholly owned non-regulated subsidiary of the Stockholder. "RELEASE" means any emission, spill, seepage, leak, escape, discharge, leaching, injection, pumping, pouring, emptying, dumping, disposal, or release of Hazardous Materials from the Real Property into or upon the air, soil, improvements, surface water, groundwater, the sewer, septic system, storm drain, publicly owned treatment works, or waste treatment, storage or disposal systems at, on, above, or under the Real Property. "SEC" means the Securities and Exchange Commission and any successor thereto. " SECTION 338 (H) (10) ELECTION" has the meaning set forth in SECTION 12.01 of the Purchase Agreement. "SECTION" means a Section (or a subsection) of the Purchase Agreement. "SECTION 338 FORMS" has the meaning set forth in SECTION 12.01 OF THE PURCHASE AGREEMENT. "SECURITIES ACT" means the Securities Act of 1933, as amended, and all regulations promulgated thereunder. "SECURITY INTERESTS" means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic's, materialmen's, and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase money liens and liens securing rental payments under capital lease arrangements, and (d) other liens arising in the ordinary course of business and not incurred in connection with the borrowing of money. "SHARED ENVIRONMENTAL COSTS" has the meaning set forth in SECTION 11.04 of the Purchase Agreement. "SHARES" has the meaning set forth in the Recitals. "SIEMENS" means Siemens Westinghouse Power Corporation. "STOCKHOLDER" means Central Hudson Energy Services, Inc., a New York corporation. "STOCKHOLDER GUARANTOR" means CH Energy Group, Inc. "STOCKHOLDER INDEMNIFIED PERSONS" means the Stockholder and its Affiliates and their respective officers, directors and employees. -vii-

"STRADDLE PERIODS" has the meaning set forth in SECTION 12.01 of the Purchase Agreement. "STRADDLE PERIOD TAXES" has the meaning set forth in SECTION 12.01 of the Purchase Agreement. "SUBSIDIARY" means any corporation, partnership, joint venture or other legal entity of which the Company (either alone or through or together with any other Subsidiary) (i) owns, directly or indirectly, fifty percent (50%) or more of the stock, partnership interests or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation, partnership, joint venture or other legal entity; or (ii) possesses, directly or indirectly, control over the direction of management or policies of such corporation, partnership, joint venture or other legal entity (whether through ownership of voting securities, by agreement or otherwise). "SURVEYS" has the meaning set forth in SECTION 4.11 (B) of the Purchase Agreement. "TAX AFFILIATE" means any entity that is a member of an affiliated group of corporations (within the meaning of Section 1540(a) of the Code) filing a consolidated U.S. federal income tax return, or a group of corporations filing a consolidated or combined tax return for state, local or foreign purposes (each a "Consolidated Group"), if the Company could be held liable for the Taxes of such entity or Consolidated Group. "TAX CONTEST" has the meaning set forth in SECTION 12.07 of the Purchase Agreement. "TAX RETURNS" means all returns, reports, declarations and information statements required to be filed by the Company or any Subsidiary (without regard to extensions of time permitted by law or otherwise) with any federal, state, local or foreign governmental authority or agency with respect to Taxes, including amendments thereto. "TAXES" means all federal, state, local and foreign taxes (including, without limitation, income, profit, franchise, sales, use, real property, personal property, ad valorem, excise, employment, social security and wage withholding taxes) and installments of estimated taxes, assessments, deficiencies, levies, imports, duties, withholdings, or other similar charges imposed by any governmental or quasi-governmental authorities, and any interest, penalties or additions to tax imposed thereon or in connection therewith. "THIRD PARTY CLAIM" means any claim or other assertion of liability by any third party. "TITLE I PLAN" means a Plan that is subject to Title I of ERISA. -viii-

"TRANSFERRED EMPLOYEE RECORDS " has the meaning set forth in SECTION 10.02 (J) of the Purchase Agreement. "TRANSMISSION CONGESTION CONTRACTS" or "TCCS" means those certain transmission congestion contracts (ID Nos. 2645 and 2646) currently held by the Company. "UCAP" has the meaning established and promulgated by NYISO, as in effect from time to time. "VOLTAGE SUPPORT SERVICE" has the meaning established and promulgated by NYISO, as in effect from time to time. "WELFARE PLAN" means an "employee welfare benefit plan" as such term is defined in SECTION 3(1) of ERISA. -ix-

EXHIBIT B TO THE STOCK PURCHASE AGREEMENT FORM OF GUARANTY THIS GUARANTY (this "Guaranty") is made as of ________, 2002 by CH Energy Group, Inc., a New York corporation ("Guarantor"), in favor of WPS Power Development, Inc., a Wisconsin corporation ("Buyer"). RECITALS Concurrently herewith (such date the "Closing Date"), Central Hudson Energy Services, Inc., a New York corporation and wholly-owned subsidiary of Guarantor ("Seller"), is consummating the sale to Buyer of all of the capital stock of CH Resources, Inc., a New York corporation and wholly-owned subsidiary of Seller ("Company"), pursuant to that certain Stock Purchase Agreement, dated as of December __, 2001 (the "Purchase Agreement"), between Seller and Buyer (any capitalized terms used herein and not defined herein having the respective meanings assigned in the Purchase Agreement). To induce Buyer to enter into the Purchase Agreement and consummate the transactions contemplated thereby, Guarantor has agreed to execute and deliver this Guaranty. The execution and performance by Buyer of the Purchase Agreement and the transactions contemplated thereby will benefit Guarantor. Without this Guaranty, Buyer would not execute and deliver the Purchase Agreement or consummate the transactions contemplated thereby. Therefore, in consideration of the execution and delivery by Buyer of the Purchase Agreement and consummation of the transactions contemplated thereby, Guarantor has agreed to execute and deliver this Guaranty. NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows: 1. GUARANTY. Guarantor guarantees to Buyer and its permitted successors and assigns the full and prompt payment and performance when due of all of the obligations of Seller under the Purchase Agreement (such obligations, the "Guaranteed Obligations"). 2. UNCONDITIONAL OBLIGATIONS. This Guaranty is a guaranty of payment and performance and not of collection and is an absolute, unconditional and irrevocable guarantee of the full and prompt payment and performance when due of all of the Guaranteed Obligations, whether or not from time to time reduced or extinguished or hereafter increased or incurred, and whether or not recovery may be, or hereafter may become, barred by any statute of limitations or otherwise. If any payment made by Seller or any other Person and applied to the Guaranteed Obligations is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be repaid or refunded for any reason, including bankruptcy, insolvency, or reorganization, then, to the extent of such payment or repayment, the liability of

Guarantor will continue to be in full force and effect (or be reinstated, if applicable) as fully as if such payment had never been made. Guarantor covenants that this Guaranty will not be fulfilled or discharged, except by the complete payment and performance of the Guaranteed Obligations, whether by the primary obligor or Guarantor under this Guaranty. Without limiting the generality of the foregoing, Guarantor's obligations hereunder will not be released, discharged or otherwise affected by the following: (a) any change in the Purchase Agreement or the obligations of Seller thereunder, or any insolvency, bankruptcy or similar proceeding affecting Seller or its assets or any defense that may arise in such insolvency, bankruptcy or similar proceeding; (b) the existence of any claim or set-off that seller has or that Guarantor may have against Buyer, whether in connection with this Guaranty or any unrelated transaction, provided that nothing in this Guaranty will be deemed a waiver by Guarantor of any claim or prevent the assertion of any claim by separate suit; (c) any law now or hereinafter in effect in any jurisdiction affecting any of the terms of the Purchase Agreement or the rights of Buyer with respect thereto; (d) any change in the corporate existence, structure or ownership of Guarantor or Seller or any assignment by Seller of its rights or obligations under the Purchase Agreement; (e) the existence of any default, breach, or dissolution in connection with the Purchase Agreement; (f) the existence of any release or amendment or waiver of or consent to departure from any other guaranty for all or any of the Guaranteed Obligations; (g) any exchange of, release of or non-perfection of any interest in any collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the obligations of Seller; and (h) any other act, omission to act, delay of any kind by any party hereto or any other Person, or any circumstance whatsoever that might, but for the provisions of this Section, constitute a legal or equitable discharge of the obligations of Guarantor hereunder. This Guaranty will in all respects be a continuing, absolute, and unconditional guaranty irrespective of the genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any part thereof or any instrument or agreement evidencing any of the Guaranteed Obligations ore relating thereto, or the existence, validity, enforceability, perfection, or extent of any collateral therefor or any other circumstances relating to the Guaranteed Obligations which might otherwise constitute a defense to the Guaranteed Obligations or this Guaranty. 3. INDEPENDENT OBLIGATIONS. Guarantor agrees that the Guaranteed Obligations are independent of the obligations of Seller under the Purchase Agreement and if any default occurs hereunder, a separate action or actions may be brought and prosecuted against Guarantor whether -2-

or not Seller is joined therein. Buyer may maintain successive actions for other defaults of Guarantor. Buyer's rights hereunder will not be exhausted by the exercise of any of its rights or remedies or by any such action or by any number of successive actions until and unless all Guaranteed Obligations have been paid and fully performed. (a) Guarantor agrees that Buyer may enforce this Guaranty, at any time and from time to time, without the necessity of resorting to or exhausting any security or collateral and without the necessity of proceeding against Seller. Guarantor hereby waives the right to require Buyer to proceed against Seller, to exercise any right or remedy under the Purchase Agreement, or to pursue any other remedy or to enforce any other right. (b) Guarantor will continue to be subject to this Guaranty notwithstanding: (i) any modification, agreement or stipulation between Buyer and Seller, or their respective successors and assigns, with respect to the Purchase Agreement or the Guaranteed Obligations; (ii) any waiver of or failure to enforce any of the terms, covenants or conditions contained in the Purchase Agreement or any modification thereof; (iii) any release of Seller from any liability with respect to the Purchase Agreement; or (iv) any release or subordination of any collateral then held by Buyer as security for the performance by Seller of the Guaranteed Obligations. (c) The Guaranteed Obligations are not conditional or contingent upon the genuineness, validity, regularity or enforceability of the Purchase Agreement or the pursuit by Buyer of any remedies which Buyer either now has or may hereafter have with respect thereto under the Purchase Agreement. 4. LIABILITY OF GUARANTOR. (a) Buyer may enforce this Guaranty upon the occurrence of a breach by Seller of any of the Guaranteed Obligations, notwithstanding the existence of any dispute between Seller and Buyer with respect to the existence of any such breach. (b) Guarantor's performance of some, but not all, of the Guaranteed Obligations will in no way limit, affect, modify or abridge Guarantor's liability for those Guaranteed Obligations that have not been performed. (c) Buyer, upon such terms as it deems appropriate, without notice or demand and without affecting the validity or enforceability of this Guaranty or giving rise to any reduction, limitation, impairment, discharge or termination of Guarantor's liability hereunder, from time to time may (i) with respect to Seller's financial obligations, renew, extend, accelerate, increase the rate of interest on, or otherwise change the time, place, manner or terms of payment of financial obligations that are Guaranteed Obligations, or subordinate the payment of the same to the payment of any other obligations, or any or all of the above, (ii) settle, compromise, release or discharge, or accept or refuse any offer of performance with respect to, or substitutions for, the Guaranteed Obligations or any agreement relating thereto, (iii) request and accept other guarantees of the Guaranteed Obligations and take and hold security for the payment of this Guaranty or the Guaranteed Obligations, (iv) release, surrender, exchange, substitute, compromise, settle, rescind, waive, alter, subordinate or modify, with or without consideration, -3-

any security for performance of the Guaranteed Obligations, any other guarantees of the Guaranteed Obligations, or any other obligation of any Person with respect to the Guaranteed Obligations, (v) enforce and apply any security hereafter held by or for the benefit of Buyer in respect of this Guaranty or the Guaranteed Obligations and direct the order or manner of sale thereof or exercise of any other right or remedy that Buyer may have against any such security, as Buyer in its discretion may determine, and (vi) exercise any other rights available to it under the Purchase Agreement. (d) This Guaranty and the obligations of Guarantor hereunder will be valid and enforceable and will not be subject to any reduction, limitation, impairment, discharge or termination for any reason (other than indefeasible performance in full of the Guaranteed Obligations), including without limitation the occurrence of any of the following, whether or not Guarantor will have had notice or knowledge of any of them: (i) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of any claim or demand or any right, power or remedy (whether arising under the Purchase Agreement, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement or instrument relating thereto; (ii) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including without limitation provisions relating to events of default) of the Purchase Agreement or any agreement or instrument executed pursuant thereto; (iii) Buyer's consent to the change, reorganization or termination of the corporate structure or existence of Seller; (iv) any defenses, set-offs or counterclaims Seller or Guarantor may allege or assert against Buyer in respect of the Guaranteed Obligations, including but not limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (v) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of Guarantor as an obligor in respect of the Guaranteed Obligations. 5. WAIVERS. To the fullest extent permitted by law, Guarantor hereby waives and agrees not to assert or take advantage of: (a) any right to require Buyer to proceed against Seller or any other Person or to proceed against or exhaust any security held by Buyer at any time or to pursue any right or remedy under the Purchase Agreement or any other remedy in Buyer's power before proceeding against Guarantor; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of, or revocation hereby by Guarantor or Seller or any other Person or the failure of Buyer to file or enforce a claim against the estate (either in administration, bankruptcy or any other proceeding) of any such Person; (c) any defense that may arise by reason of any presentment, demand for payment or performance or otherwise, protest or notice of any other kind or lack thereof; (d) any right or defense arising out of an election of remedies by Buyer; (e) all notices to Guarantor, to Seller, or to any other Person, including, but not limited to, notices of the acceptance of this Guaranty or the creation, renewal, extension, modification, accrual of any of Seller's obligations under the Purchase Agreement, or of default in the payment or performance of any such obligations, enforcement of any right or remedy with respect thereto or notice of any other matters relating thereto; (f) any statute of limitations affecting Guarantor's liability hereunder or the enforcement thereof; (g) any requirements of diligence or promptness on the part of Buyer; (h) any defense arising out of the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument relating -4-

thereto or by reason of the cessation of the liability of Seller, or any other Person from any cause other than indefeasible performance in full of the Guaranteed Obligations; (i) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (j) any defense based upon any act or omission of Buyer that directly or indirectly results in or aids the discharge or release of Seller or Guarantor or any security given or held by Buyer in connection with the Guaranteed Obligations; and (k) any and all surety ship defenses under applicable law. 6. CUMULATIVE RIGHTS. All rights powers and remedies of Buyer hereunder are in addition to and not in lieu of all other rights, powers and remedies given to Buyer, whether at law, in equity or otherwise. 7. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants that: (a) it is a corporation duly organized, validly existing, and in good standing under the laws of the State of New York and has all requisite corporate powers and all material governmental licenses, authorizations, consents and approvals required to own its properties and carry on its business as now conducted; (b) it has all requisite corporate power and authority to execute, deliver and perform this Guaranty; (c) the execution, delivery, and performance by Guarantor of this Guaranty have been duly authorized by all necessary corporate action on the part of Guarantor; (d) this Guaranty has been duly executed and delivered and constitutes the legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms; (e) neither the execution nor delivery of this Guaranty nor compliance with or fulfillment of the terms, conditions, and provisions hereof will conflict with, result in a material breach or violation of the terms, conditions, or provisions of, or constitute a material default, an event of default, or an event creating rights of acceleration, termination, or cancellation, or a loss of rights under, (1) the certificate of incorporation or by-laws of Guarantor (or equivalent governing instruments), (2) any judgment, decree, order, contract, agreement, indenture, instrument, note, mortgage, lease, governmental permit, or other authorization, right, restriction, or obligation to which Guarantor is a party or any of its property is subject or by which Guarantor is bound, or (3) any federal, state, or local law, statute, ordinance, rule or regulation applicable to Guarantor; (f) it now has and will continue to have full and complete access to any and all information concerning the transactions contemplated by the Purchase Agreement and Seller's financial status, and its ability to perform the Guaranteed Obligations; (g) it has reviewed and approved a copy of the Purchase Agreement and is fully informed of the remedies Buyer may pursue, with or without notice to Seller or any other Person, in the event of default of any of the Guaranteed Obligations; -5-

(h) it has made and so long as the Guaranteed Obligations (or any portion thereof) remain unsatisfied, it will make its own credit analysis of Seller and will keep itself fully informed as to all aspects of the financial condition of Seller, the performance of the Guaranteed Obligations, and all circumstances bearing upon the risk of non payment or nonperformance of the Guaranteed Obligations. Guarantor hereby waives and relinquishes any duty on the part of Buyer to disclose any matter, fact or thing relating to the business, operations or conditions of Seller now known or hereafter known by Buyer. (i) no consent, authorization, approval, order, license, certificate, or permit or act of or from, or declaration or filing with, any Governmental Authority or any party to any contract, agreement, instrument, lease, or license to which Guarantor is a party or by which Guarantor is bound, is required for the execution, delivery, or compliance with the terms hereof by Guarantor, except as have been obtained prior to the date hereof; and (j) there is no pending or, to its knowledge, threatened action, suit, proceeding, arbitration, litigation, or investigation of or before any Governmental Authority or any other entity which challenges the validity or enforceability of this Guaranty. 8. GOVERNING LAW. The validity, interpretation and effect of this Guaranty are governed by and will be construed in accordance with the laws of the State of New York applicable to contracts made and performed in such State, without regard to conflicts of law doctrines. 9. ENTIRE AGREEMENT. This Guaranty contains the entire agreement of Guarantor with respect to the transactions contemplated hereby, and supersedes all negotiations, representations, warranties, commitments, offers, contracts and writings prior to the date hereof, written or oral, with respect to the subject matter hereof. No waiver, modification or amendment of any provision of this Guaranty shall be effective unless made in writing and duly signed by Buyer referring specifically to this Guaranty, and then only to the specific purpose, extent and interest so provided. 10. SEVERABILITY. If any provision of this Guaranty is determined to be unenforceable for any reason by a court of competent jurisdiction, this Guaranty will be adjusted rather than voided, to achieve the intent of the parties, and all of the provisions not deemed unenforceable will be deemed valid and enforceable to the greatest extent possible. 11. NOTICES. All notices, requests, demands and other communications under this Guaranty must be in writing and must be delivered in person or sent by certified mail, postage prepaid, or by overnight delivery, and properly addressed as follows: -6-

If to Guarantor: CH Energy Group, Inc. 110 Main Street Poughkepsie, NY 12601 Attention: Allan R. Page Facsimile No. (845) 473-7316 With a copies to: Winston & Strawn 1400 L Street, N.W. Washington, DC 20005-3502 Attention: Donald K. Dankner Facsimile No.: (202) 371-5950 Gould & Wilkie LLP One Chase Manhattan Plaza (58th Floor) New York, NY 10005-1401 Attention: John E. Gould Facsimile: (212) 809-6890 If to Buyer: WPS Power Development, Inc. 1088 Springhurst Drive Green Bay, WI 54304 Attention: Charles A. Schrock Facsimile No.: (920) 617-6140 With a copies to: WPS Power Development, Inc. 1088 Springhurst Drive Green Bay, WI 54304 Attention: B. Frank Moon Facsimile No.: (920) 617-6140 Foley & Lardner 777 East Wisconsin Avenue Milwaukee, WI 53202-5367 Attention: Edward J. Hammond Facsimile No.: (414) 297-4900 -7-

Either Guarantor or Buyer may from time to time change its address for the purpose of notices by a similar notice specifying a new address, but no such change is effective until actually received by the party sought to be charged with its contents. All notices and other communications required or permitted under this Guaranty which are addressed as provided in this Section 11 shall be effective upon delivery, if delivered personally or by overnight mail, and shall be effective five (5) days following deposit in the United States mail, postage prepaid, if delivered by mail. 12. CAPTIONS. The captions of the various Sections of this Guaranty have been inserted for convenience of reference only and do not modify, explain, enlarge or restrict any of the provisions of this Guaranty. 13. ASSIGNABILITY. This Guaranty is binding upon and inures to the benefit of the successors and assigns of Guarantor and Buyer, but is not assignable by either Party without the prior written consent of the other Party, which consent will not be unreasonably withheld, except that Buyer may assign this Guaranty to an Affiliate without obtaining any further consent from Guarantor. Any assignment by Guarantor is further conditioned on the assignee's agreement in writing to assume all of the Guarantor's obligations hereunder; provided, however, that any assignment by Guarantor effected in accordance with this Section 13 shall not relieve Guarantor of its obligations and liabilities under this Guaranty. 14. CONSTRUCTION OF AGREEMENT. Ambiguities or uncertainties in the wording of this Guaranty will not be construed for or against any party, but will be construed in the manner that most accurately reflects the parties' intent as of the date hereof. 15. NO WAIVER. Any forbearance or failure to exercise, and any delay by Buyer in exercising, any right, power or remedy hereunder will not impair any such right, power or remedy or be construed to be a waiver thereof, nor will it preclude the further exercise of any such right, power or remedy. The remedies herein provided are cumulative and not exclusive of any remedies provided by law, by agreement or otherwise. 16. BANKRUPTCY; POST-PETITION INTEREST. (a) The obligations of Guarantor under this Guaranty will not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Seller or by any defense which Seller may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding. Buyer is not obligated to file any claim relating to the Guaranteed Obligations if Seller becomes subject to a bankruptcy, reorganization, or similar proceeding, and the failure of Buyer so to file will not affect Guarantor's obligations under this Guaranty. (b) Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed Obligations which accrues after the commencement of any proceeding referred to in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by -8-

operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guaranteed Obligations if said proceedings had not been commenced) will be included in the Guaranteed Obligations because it is the intention of Guarantor and Buyer that the Guaranteed Obligations should be determined without regard to any rule of law or order that may relieve Seller of any portion of such Guaranteed Obligations. Guarantor will permit any trustee in bankruptcy, receiver, debtor-in-possession, assignee for the benefit of creditors or any similar Person to pay Buyer, or allow the claim of Buyer in respect of any such interest accruing after the date on which such proceeding is commenced. IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first written above. CH ENERGY GROUP, INC. By: Name:

Title: -9-

EXHIBIT (10)(i)70 WPS POWER DEVELOPMENT, INC. 1088 SPRINGHURST DRIVE GREEN BAY, WISCONSIN 54304 December 21, 2001 Central Hudson Enterprises Corporation 110 Main Street Poughkeepsie, NY 12601 RE: TRANSMISSION CONGESTION CONTRACTS Ladies & Gentlemen: We refer you to the two Transmission Congestion Contracts held by Central Hudson Enterprises Corporation ("CHEC") described in the Confidential Offering Memorandum regarding CH Resources, Inc. dated September 2001 (the "TCCs"). This letter reflects our understanding and agreement regarding the transfer and assignment of the TCCs. CHEC shall transfer and assign all of its rights, title and interest in and to the TCCs to WPS Energy Services, Inc. or one of its corporate affiliates ("ESI"), and ESI shall assume all obligations under the TCCs, for a cash purchase price of $3,982,440 payable by ESI to CHEC at closing subject to adjustment as provided below. Such transfer shall take place pursuant to an Assignment and Assumption Agreement containing reasonable and customary terms and conditions to be agreed between the parties. The closing of such transfer shall take place no later than the closing under the Stock Purchase Agreement dated as of December 21, 2001 (the "SPA") between Central Hudson Energy Services, Inc. and us. The purchase price shall be adjusted as follows: (i) if the closing is delayed beyond May 15, 2002, the price shall be reduced by $4,700 for each day from and including May 16, 2002 through and including the date of the closing subject to the limitation set forth in Section 9.14 of the SPA; and (ii) if the closing occurs prior to April 16, 2002, the price shall be increased by $4,700 for each day after the closing date to but not including April 16, 2002. In no event shall such adjustment exceed an aggregate amount of $625,000. If this letter meets with your understanding of our agreement, please so indicate by signing in the space provided below, whereupon this will become a binding agreement between us. Very truly yours, WPS POWER DEVELOPMENT, INC.
By: /s/ CHARLES A. SCHROCK -------------------------------------Name: Charles A. Schrock Title: President

ACCEPTED AND AGREED TO: CENTRAL HUDSON ENTERPRISES CORPORATION
By: /s/ ALLEN R. PAGE -------------------------------------Name: Allen R. Page Title: President

EXHIBIT (10)(i)72 July 3, 2001 Power Marketing Central Hudson Gas & Electric Corporation 284 South Avenue Poughkeepsie, New York 12601 Mr. Andrew Grams Dynegy Marketing and Trade 1000 Louisiana, Suite 5800 Houston, Texas 77002 Dear Drew: As we discussed Central Hudson and Dynegy have agreed, as of July 1, 2001, to settle the TPA as a Contract for Differences based on the NYISO, Zone G, Day Ahead Market prices. This will allow both Central Hudson and Dynegy to explore the merits of a financial settlement for the TPA. Prices for this settlement will be based on those previously agreed to in The Transitional Power Agreement. If for any reason either party, Dynegy or Central Hudson, wishes to end this temporary agreement and return to a physical delivery such a change will be effective the first day of the next month. Notification of returning to a physical transaction would be made two working days prior to the start of the month. Should you have any questions or concerns, please feel free to contact me. Yours truly,
/s/ JAMES VALLEAU --------------------------------James Valleau Director of Power Marketing

EXHIBIT (10)(iii)13 EMPLOYMENT AGREEMENT AGREEMENT by and between CH Energy Group Inc. ("Energy Group"), a New York corporation, and ---------------- (the "Executive"), dated as of the ----- day of ---------, 2000. The Board of Directors of Energy Group (the "Board") has determined that it is in the best interests of Energy Group and its shareholders to assure that Energy Group will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of Energy Group. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to Energy Group currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused Energy Group to enter into this Agreement with the Executive. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. This Employment Agreement shall be between Energy Group and the Executive named above for all periods during which the Executive serves in the capacity as an officer of Energy Group or any of its affiliated companies. 2. CERTAIN DEFINITIONS. (a) As used in this Agreement, "Energy Group" shall mean CH Energy Group, Inc. as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. (b) As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with Energy Group. (c) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 2(d)) on which a Change of Control (as defined in Section 3) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with Energy Group or any of its affiliated companies is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

(d) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the following July 31, which July 31 and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date". Unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate one year from such Renewal Date, unless at least 60 days prior to the Renewal Date Energy Group shall give notice to the Executive that the Change of Control Period shall not be so extended; PROVIDED, that such a notice shall be null and void if it is reasonably demonstrated by the Executive that such notice was given (i) at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise in connection with or anticipation of a Change of Control. (e) The "Multiple" shall mean three. 3. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))(a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of Energy Group (the "Outstanding Energy Group Common Stock") or (y) the combined voting power of the then outstanding voting securities of Energy Group entitled to vote generally in the election of directors (the "Outstanding Energy Group Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Energy Group, (ii) any acquisition by Energy Group, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Energy Group or its affiliated companies or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 3; or (b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Energy Group's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Energy Group (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or 2

substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energy Group or all or substantially all of Energy Group's assets either directly or through one or more of its affiliated companies) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Energy Group Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energy Group or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business combination; or (d) Approval by the shareholders of Energy Group of a complete liquidation or dissolution of Energy Group. 4. EMPLOYMENT PERIOD. Energy Group hereby agrees to continue, or cause to be continued, the Executive in its employ, or in the employ of any of its affiliated companies, and the Executive hereby agrees to remain in the employ of Energy Group or any of its affiliated companies subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of such date (the "Employment Period"). 5. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location within Energy Group's service territory (as it existed immediately before the Effective Date); PROVIDED, that the Executive may be required to relocate outside such service territory if Energy Group or any of its affiliated companies provides the Executive with relocation benefits at least as favorable as those that would have been provided under Energy Group's, or any affiliated 3

companies' applicable relocation policy as in effect immediately before the Effective Date. (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of Energy Group or any of its affiliated companies and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of Energy Group or any of its affiliated companies in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to Energy Group or any of its affiliated companies. (b) COMPENSATION. (i) BASE SALARY. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by Energy Group or any of its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as used in this Agreement shall refer to Annual Base Salary as so increased. (ii) ANNUAL BONUS. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's highest bonus under Central Hudson Gas & Electric Corporation's Management Incentive Plan, Energy Group's Executive Compensation Program, if applicable, or any comparable annual bonus under any predecessor or successor plan, for the last three full fiscal years prior to the Effective Date (annualized in the event that the Executive was not employed by Energy Group or its affiliated company for the whole of such fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded. 4

(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of Energy Group or its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by Energy Group or its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of Energy Group or its affiliated companies. (iv) WELFARE BENEFIT PLANS. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by Energy Group or its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of Energy Group or its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of Energy Group or its affiliated companies. (v) EXPENSES. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of Energy Group or any of its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (vi) FRINGE BENEFITS. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of Energy Group or any of its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive shall be entitled to an office and support staff at least equal to the most favorable of 5

the foregoing provided to the Executive by Energy Group or any of its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (viii) VACATION. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of Energy Group or any of its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (ix) CERTAIN EXCLUSIONS. In determining the benefits provided in subclauses (i) through and including (viii) of this paragraph (b), there shall be excluded from consideration any such benefits provided by any of the affiliated companies during the measuring periods, if any, referred to in such subclauses if Energy Group has elected not to enter into Employment Agreements (of this Type) with executives of such affiliated companies. 6. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If Energy Group or any of its affiliated companies determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 13(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with Energy Group or any of its affiliated companies shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with Energy Group or any of its affiliated companies on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by Energy Group or its insurers and acceptable to the Executive or the Executive's legal representative. (b) CAUSE. The Executive's employment during the Employment Period may be terminated for Cause. For purposes of this Agreement, "Cause" shall mean: (i) the willful and continued failure of the Executive to perform substantially the Executive's duties with Energy Group or any of its affiliated companies (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of Energy Group which specifically identifies the 6

manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to Energy Group or any of its affiliated companies. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of Energy Group or any of its affiliated companies. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of Energy Group or any of its affiliated companies based upon the advice of counsel for Energy Group shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of Energy Group or any of its affiliated companies. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. (c) GOOD REASON. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean: (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 5 (a) of this Agreement, or any other action by Energy Group or any of its affiliated companies which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Energy Group or any of its affiliated companies promptly after receipt of notice thereof given by the Executive; (ii) any failure by Energy Group or any of its affiliated companies to comply with any of the provisions of Section 5(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by Energy Group or any of its affiliated companies promptly after receipt of notice thereof given by the Executive; (iii) Energy Group or any of its affiliated companies requiring the Executive to be based at any office or location other than as provided in Section 5(a)(I)(B) hereof or Energy Group or any of its affiliated companies requiring the 7

Executive to travel on company business to a substantially greater extent than required immediately prior to the Effective Date; (iv) any purported termination by Energy Group or any of its affiliated companies of the Executive's employment otherwise than as expressly permitted by this Agreement; or (v) any failure by Energy Group or any of its affiliated companies to comply with and satisfy Section 12(c) of this Agreement. For purposes of this Section 6(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement. (d) NOTICE OF TERMINATION. Any termination by Energy Group or any of its affiliated companies for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or Energy Group or any of its affiliated companies to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or Energy Group or any of its affiliated companies, respectively, hereunder or preclude the Executive or Energy Group or any of its affiliated companies, respectively, from asserting such fact or circumstance in enforcing the Executive's or Energy Group's or any of its affiliated company's rights hereunder. (e) DATE OF TERMINATION. "Date of Termination" means (i) if the Executive's employment is terminated by Energy Group or any of its affiliated companies for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by Energy Group or any of its affiliated companies other than for Cause or Disability, the Date of Termination shall be the date on which Energy Group or any of its affiliated companies notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 7. OBLIGATIONS OF ENERGY GROUP AND ITS AFFILIATED COMPANIES UPON TERMINATION. (a) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period, Energy Group or any of its affiliated companies shall terminate the Executive's employment other 8

than for Cause or Disability or the Executive shall terminate employment for Good Reason: (i) Energy Group shall pay, or cause to be paid, to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and B. the amount equal to the product of (1) the Multiple and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus; (ii) for a number of years after the Executive's Date of Termination equal to the Multiple, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, Energy Group or any of its affiliated companies shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 5(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the expiration of a number of years after the Date of Termination equal to the Multiple and to have retired on the last day of such period; (iii) Energy Group or any of its affiliated companies shall, at its sole expense as incurred, provide the Executive with out placement services from a 9

recognized out placement service provider, the scope of which shall be selected by the Executive in his sole discretion but the cost to Energy Group shall not exceed $30,000; and (iv) to the extent not theretofore paid or provided, Energy Group or any of its affiliated companies shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of Energy Group or any of its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"). (b) DEATH. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 7(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by Energy Group or any of its affiliated companies to the estates and beneficiaries of peer executives of Energy Group and any such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of Energy Group or any of its affiliated companies and their beneficiaries. (c) DISABILITY. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate as of the Disability Effective Date, without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 7 (c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by Energy Group or any of its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of Energy Group or any of its affiliated companies and their families. (d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment shall 10

be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by Energy Group or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 13(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with Energy Group or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with Energy Group or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 9. FULL SETTLEMENT. Energy Group's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Energy Group or any of its affiliated companies may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Energy Group agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by Energy Group or any of its affiliated companies, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). 10. CERTAIN ADDITIONAL PAYMENTS BY ENERGY GROUP OR ITS AFFILIATED COMPANIES. (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by Energy Group or any of its affiliated companies to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a 11

"Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that could be paid to the Executive such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. (b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a major accounting firm with expertise in such matters designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Energy Group and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by Energy Group. All fees and expenses of the Accounting Firm shall be borne solely by Energy Group. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid, or caused to be paid, by Energy Group to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Energy Group and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by Energy Group should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Energy Group exhausts its remedies pursuant to Section 10(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid, or caused to be paid, by Energy Group to or for the benefit of the Executive. (c) The Executive shall notify Energy Group in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Energy Group of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise Energy Group of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to Energy Group (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Energy Group notifies the Executive in 12

writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give Energy Group any information reasonably requested by Energy Group relating to such claim, (ii) take such action in connection with contesting such claim as Energy Group shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by Energy Group, (iii) cooperate with Energy Group in good faith in order effectively to contest such claim, and (iv) permit Energy Group to participate in any proceedings relating to such claim; provided, however, that Energy Group shall bear and pay, or cause to be paid, directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 10(c), Energy Group shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Energy Group shall determine; provided, however, that if Energy Group directs the Executive to pay such claim and sue for a refund, Energy Group shall advance, or cause to be advanced, the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Energy Group's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (d) If, after the receipt by the Executive of an amount advanced, or caused to be advanced, by Energy Group pursuant to Section 10(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Energy Group's 13

complying with the requirements of Section 10(c)) promptly pay to Energy Group the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced, or caused to be advanced, by Energy Group pursuant to Section 10(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Energy Group does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 11. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity for the benefit of Energy Group or any of its affiliated companies all secret or confidential information, knowledge or data relating to Energy Group or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by Energy Group or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with Energy Group or any of its affiliated companies, the Executive shall not, without the prior written consent of Energy Group or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than Energy Group and those designated by it. In no event shall an asserted violation of the provisions of this Section 11 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 12. SUCCESSORS. (a) This Agreement is personal to the Executive and without the prior written consent of Energy Group shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon Energy Group and its successors and assigns. (c) Energy Group will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Energy Group to assume expressly and agree to perform this Agreement in the same manner and to the same extent that Energy Group would be required to perform it if no such succession had taken place. 13. EARLY TERMINATION. This agreement shall terminate as of the date Executive becomes employed by any of the affiliated companies to which Energy Group has elected not to enter into employment agreements (of this Type) with executives of such affiliated companies; provided such employment becomes effective prior to a Change of Control. 14

14. MISCELLANEOUS. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: IF TO THE EXECUTIVE: (full address of Executive) IF TO ENERGY GROUP: CH Energy Group, Inc. 284 South Avenue Poughkeepsie, New York 12601-4879 Attention: Chief Executive Officer or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) Energy Group may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's or Energy Group's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or Energy Group may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 6(c) (i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. 15

(f) The Executive and Energy Group acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and Energy Group, or any of its affiliated companies, the employment of the Executive by Energy Group or any of its affiliated companies is "at will" and, subject to Section 2(c) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or Energy Group or any of its affiliated companies at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement; PROVIDED, that this Agreement may not be terminated by Energy Group or any of its affiliated companies if it is reasonably demonstrated by the Executive that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control. From and after the Effective Date, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, Energy Group has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. (full name of Executive) CH Energy Group, Inc. By __________________________________________ Chairman of the Board and Chief Executive Officer (add Central Hudson Energy Services, Inc. or Central Hudson Gas & Electric Corporation, if needed By __________________________________________ President and Chief Operating Officer 16

EXHIBIT (10)(iii)16 EMPLOYMENT AGREEMENT AGREEMENT by and between CH Energy Group, Inc. ("Energy Group"), a New York corporation, and Paul J. Ganci (the "Executive"), dated as of the 28th day of September, 2001. The Board of Directors of Energy Group (the "Board"), has determined that it is in the best interests of Energy Group and its shareholders to assure that Energy Group will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of Energy Group. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive's full attention and dedication to Energy Group currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused Energy Group to enter into this Agreement with the Executive. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 1. This Employment Agreement shall be between Energy Group and the Executive named above for all periods during which the Executive serves in the capacity as an officer of Energy Group or any of its affiliated companies. 2. CERTAIN DEFINITIONS. (a) As used in this Agreement, "Energy Group" shall mean CH Energy Group, Inc. as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. (b) As used in this Agreement, the term "affiliated companies" shall include any company controlled by, controlling or under common control with Energy Group. (c) The "Effective Date" shall mean the first date during the Change of Control Period (as defined in Section 2(d)) on which a Change of Control (as defined in Section 3) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive's employment with Energy Group or any of its affiliated companies is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this

Agreement the "Effective Date" shall mean the date immediately prior to the date of such termination of employment. (d) The "Change of Control Period" shall mean the period commencing on the date hereof and ending on the following July 31, which July 31 and each annual anniversary thereof shall be hereinafter referred to as the "Renewal Date". Unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate one year from such Renewal Date, unless at least 60 days prior to the Renewal Date Energy Group shall give notice to the Executive that the Change of Control Period shall not be so extended; PROVIDED, that such a notice shall be null and void if it is reasonably demonstrated by the Executive that such notice was given (i) at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise in connection with or anticipation of a Change of Control. (e) The "Multiple" shall mean three. 3. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of Energy Group (the "Outstanding Energy Group Common Stock") or (y) the combined voting power of the then outstanding voting securities of Energy Group entitled to vote generally in the election of directors (the "Outstanding Energy Group Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Energy Group, (ii) any acquisition by Energy Group, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Energy Group or any corporation controlled by Energy Group or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 3; or (b) Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Energy Group's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Energy Group (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding En2

ergy Group Common Stock and Outstanding Energy Group Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energy Group or all or substantially all of Energy Group's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energy Group or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of Energy Group of a complete liquidation or dissolution of Energy Group. 4. EMPLOYMENT PERIOD. Energy Group hereby agrees to continue, or cause to be continued, the Executive in the employ, and the Executive hereby agrees to remain in the employ, of Energy Group or any of its affiliated companies subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the third anniversary of such date (the "Employment Period"). 5. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i) During the Employment Period, (A) the Executive's position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive's services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location within Energy Group's service territory (as it existed immediately before the Effective Date); PROVIDED, that the Executive may be required to relocate outside such service territory if Energy Group or any of its affiliated companies provides the Executive with relocation benefits at least as favorable as those that would have been provided under Energy Group's or any affiliated companies' applicable relocation policy as in effect immediately before the Effective Date. (ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of Energy Group and its affiliated companies and, to the extent necessary to discharge the responsibilities assigned to 3

the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive's responsibilities as an employee of Energy Group or any of its affiliated companies in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive's responsibilities to Energy Group and its affiliated companies. (b) COMPENSATION. (i) BASE SALARY. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate, at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by Energy Group and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as used in this Agreement shall refer to Annual Base Salary as so increased. (ii) ANNUAL BONUS. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's highest bonus under Energy Group's Executive Annual Incentive Plan, or Energy Group's Executive Compensation Program, as applicable, or any comparable annual bonus under any predecessor or successor plan, for the last three full fiscal years prior to the Effective Date (the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded. (iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of Energy Group or its affiliated companies and its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by Energy Group and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of Energy Group or any of its affiliated companies. 4

(iv) WELFARE BENEFIT PLANS. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by Energy Group or its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of Energy Group or its affiliated companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of Energy Group or any of its affiliated companies. (v) EXPENSES. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of Energy Group or any of its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (vi) FRINGE BENEFITS. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of Energy Group or any of its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive shall be entitled to an office and support staff at least equal to the most favorable of the foregoing provided to the Executive by Energy Group or any of its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. (viii) VACATION. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of Energy Group or any of its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any of its affiliated companies. 6. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If Energy Group determines in good faith that the Disability of the Executive has occurred 5

during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 13(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with Energy Group and its affiliated companies shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to fulltime performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of the Executive from the Executive's duties with Energy Group and its affiliated companies on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by Energy Group or its insurers and acceptable to the Executive or the Executive's legal representative. (b) CAUSE. Energy Group may terminate the Executive's employment during the Employment Period for Cause. For purposes of this Agreement, "Cause" shall mean: (i) the willful and continued failure of the Executive to perform substantially the Executive's duties with Energy Group or any of its affiliated companies (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to Energy Group or any of its affiliated companies. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of Energy Group and its affiliated companies. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for Energy Group shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of Energy Group and its affiliated companies. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board (excluding the Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. (c) GOOD REASON. The Executive's employment may be terminated by the Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean: (i) the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), 6

authority, duties or responsibilities as contemplated by Section 5(a) of this Agreement (including without limitation the Executive's ceasing to serve as sole chief executive officer of a widely held, publicly traded corporation), or any other action by Energy Group or any of its affiliated companies which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Energy Group or any of its affiliated companies promptly after receipt of notice thereof given by the Executive; (ii) any failure by Energy Group or any of its affiliated companies to comply with any of the provisions of Section 5(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by Energy Group or any of its affiliated companies promptly after receipt of notice thereof given by the Executive; (iii) Energy Group's or any of its affiliated companies' requiring the Executive to be based at any office or location other than as provided in Section 5(a)(i)(B) hereof or Energy Group or any of its affiliated companies requiring the Executive to travel on company business to a substantially greater extent than required immediately prior to the Effective Date; (iv) any purported termination by Energy Group or any of its affiliated companies of the Executive's employment otherwise than as expressly permitted by this Agreement; or (v) any failure by Energy Group or any of its affiliated companies to comply with and satisfy Section 12(c) of this Agreement. For purposes of this Section 6(c), any good faith determination of "Good Reason" made by the Executive shall be conclusive. Anything in this Agreement to the contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement. (d) NOTICE OF TERMINATION. Any termination by Energy Group for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 13(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or Energy Group to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or Energy Group, respectively, hereunder or preclude the Executive or Energy Group, re7

spectively, from asserting such fact or circumstance in enforcing the Executive's or Energy Group's rights hereunder. (e) DATE OF TERMINATION. "Date of Termination" means (i) if the Executive's employment is terminated by Energy Group for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive's employment is terminated by Energy Group other than for Cause or Disability, the Date of Termination shall be the date on which Energy Group notifies the Executive of such termination and (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be. 7. OBLIGATIONS OF ENERGY GROUP UPON TERMINATION. (a) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period, Energy Group shall terminate the Executive's employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason: (i) Energy Group shall pay, or cause to be paid, to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts: A. the sum of (1) the Executive's Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the "Highest Annual Bonus") and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the "Accrued Obligations"); and B. the amount equal to the product of (1) the Multiple and (2) the sum of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus; (ii) for a number of years after the Executive's Date of Termination equal to the Multiple, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, Energy Group or any of its affiliated companies shall continue benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 5(b)(iv) of this Agreement if the Executive's employment had not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of Energy Group or any 8

of its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility. For purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits pursuant to such plans, practices, programs and policies, the Executive shall be considered to have remained employed until the expiration of a number of years after the Date of Termination equal to the Multiple and to have retired on the last day of such period; (iii) Energy Group or any of its affiliated companies shall, at its sole expense as incurred, provide the Executive with outplacement services from a recognized outplacement service provider, the scope of which shall be selected by the Executive in his sole discretion but the cost to Energy Group of which shall not exceed $30,000; and (iv) to the extent not theretofore paid or provided, Energy Group or any of its affiliated companies shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of Energy Group or any of its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"). (b) DEATH. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 7(b) shall include, without limitation, and the Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by Energy Group or any of its affiliated companies to the estates and beneficiaries of peer executives of Energy Group and any such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive's estate and/or the Executive's beneficiaries, as in effect on the date of the Executive's death with respect to other peer executives of Energy Group or any of its affiliated companies and their beneficiaries. (c) DISABILITY. If the Executive's employment is terminated by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate as of the Disability Effective Date, without further obligations to the Executive, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 7 (c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally 9

provided by Energy Group or any of its affiliated companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive's family, as in effect at any time thereafter generally with respect to other peer executives of Energy Group or any of its affiliated companies and their families. (d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. 8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any plan, program, policy or practice provided by Energy Group or any of its affiliated companies and for which the Executive may qualify, nor, subject to Section 13(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with Energy Group or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with Energy Group or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 9. FULL SETTLEMENT. The obligation of Energy Group and its affiliated companies to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Energy Group or any of its affiliated companies may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Energy Group agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by Energy Group or any of its affiliated companies, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). 10

10. CERTAIN ADDITIONAL PAYMENTS BY ENERGY GROUP. (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by Energy Group or any of its affiliated companies to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 10) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that could be paid to the Executive such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount. (b) Subject to the provisions of Section 10(c), all determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a major accounting firm with expertise in such matters designated by the Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to Energy Group and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by Energy Group. All fees and expenses of the Accounting Firm shall be borne solely by Energy Group. Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid (or caused to be paid) by Energy Group to the Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon Energy Group and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by Energy Group should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Energy Group exhausts its remedies pursuant to Section 10(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid (or caused to be paid) by Energy Group to or for the benefit of the Executive. (c) The Executive shall notify Energy Group in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Energy Group of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise Energy 11

Group of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to Energy Group (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Energy Group notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall: (i) give Energy Group any information reasonably requested by Energy Group relating to such claim, (ii) take such action in connection with contesting such claim as Energy Group shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by Energy Group, (iii) cooperate with Energy Group in good faith in order effectively to contest such claim, and (iv) permit Energy Group to participate in any proceedings relating to such claim; provided, however, that Energy Group shall bear and pay (or caused to be borne and paid) directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 10(c), Energy Group shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Energy Group shall determine; provided, however, that if Energy Group directs the Executive to pay such claim and sue for a refund, Energy Group shall advance (or cause to be advanced) the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, Energy Group's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 12

(d) If, after the receipt by the Executive of an amount advanced (or caused to be advanced) by Energy Group pursuant to Section 10(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to Energy Group's complying with the requirements of Section 10(c)) promptly pay to Energy Group the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced (or cause to be advanced) by Energy Group pursuant to Section 10(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and Energy Group does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 11. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity for the benefit of Energy Group and its affiliated companies all secret or confidential information, knowledge or data relating to Energy Group or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive's employment by Energy Group or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive's employment with Energy Group and its affiliated companies, the Executive shall not, without the prior written consent of Energy Group or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than Energy Group and those designated by it. In no event shall an asserted violation of the provisions of this Section 11 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 12. SUCCESSORS. (a) This Agreement is personal to the Executive and without the prior written consent of Energy Group shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon Energy Group and its successors and assigns. (c) Energy Group will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Energy Group to assume expressly and agree to perform this Agreement in the same manner and to the same extent that Energy Group would be required to perform it if no such succession had taken place. 13. MISCELLANEOUS. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 13

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: IF TO THE EXECUTIVE: Paul J. Ganci 50 Pleasant Ridge Poughkeepsie, New York 12603 IF TO ENERGY GROUP: CH Energy Group, Inc. 284 South Avenue Poughkeepsie, New York 12601-4879 Attention: Chief Financial Officer or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) Energy Group may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's or Energy Group's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or Energy Group may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 6(c) (i)-(v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. (f) The Executive and Energy Group acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and Energy Group, the employment of the Executive by Energy Group and/or any of its affiliated companies is "at will" and, subject to Section 2(c) hereof, prior to the Effective Date, the Executive's employment and/or this Agreement may be terminated by either the Executive or Energy Group at any time prior to the Effective Date, in which case the Executive shall have no further rights under this 14

Agreement; PROVIDED, that this Agreement may not be terminated by Energy Group if it is reasonably demonstrated by the Executive that such termination (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control. From and after the Effective Date this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof, including, without limitation, the Employment Agreement entered into by the parties as of December 1, 1998, other than the letter dated May 30, 1990 regarding confidentiality. IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and, pursuant to the authorization from its Board of Directors, Energy Group has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.
/s/ PAUL J. GANCI ---------------------------------------------Paul J. Ganci

CH Energy Group, Inc.
By /s/ JACK EFFRON -------------------------------------------Jack Effron Chairman of the Compensation & Succession Committee of the Board of Directors

EXHIBIT (10)(iii)18 CENTRAL HUDSON GAS & ELECTRIC CORPORATION SAVINGS INCENTIVE PLAN

TABLE OF CONTENTS ARTICLE I DEFINITIONS ARTICLE II ADMINISTRATION 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 POWERS AND RESPONSIBILITIES OF THE EMPLOYER............................12 DESIGNATION OF ADMINISTRATIVE AUTHORITY................................12 POWERS AND DUTIES OF THE ADMINISTRATOR.................................12 RECORDS AND REPORTS....................................................14 APPOINTMENT OF ADVISERS................................................14 PAYMENT OF EXPENSES....................................................14 CLAIMS PROCEDURE.......................................................14 CLAIMS REVIEW PROCEDURE................................................15 ARTICLE III ELIGIBILITY 3.1 3.2 3.3 3.4 3.5 3.6 3.7 CONDITIONS OF ELIGIBILITY..............................................15 EFFECTIVE DATE OF PARTICIPATION........................................15 DETERMINATION OF ELIGIBILITY...........................................16 TERMINATION OF ELIGIBILITY.............................................16 OMISSION OF ELIGIBLE EMPLOYEE..........................................16 INCLUSION OF INELIGIBLE EMPLOYEE.......................................16 ELECTION NOT TO PARTICIPATE............................................16 ARTICLE IV CONTRIBUTION AND ALLOCATION 4.1 4.2 4.3 4.4 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION..........................17 PARTICIPANT'S SALARY REDUCTION ELECTION................................17 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION...............................20 ALLOCATION OF CONTRIBUTION AND EARNINGS................................20

4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13

ACTUAL DEFERRAL PERCENTAGE TESTS.......................................22 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.........................24 ACTUAL CONTRIBUTION PERCENTAGE TESTS...................................26 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.....................28 MAXIMUM ANNUAL ADDITIONS...............................................29 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS..............................31 TRANSFERS FROM QUALIFIED PLANS.........................................32 VOLUNTARY CONTRIBUTIONS................................................34 DIRECTED INVESTMENT ACCOUNT............................................35 ARTICLE V VALUATIONS

5.1 5.2

VALUATION OF THE TRUST FUND............................................36 METHOD OF VALUATION ...................................................37

ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 DETERMINATION OF BENEFITS UPON RETIREMENT..............................37 DETERMINATION OF BENEFITS UPON DEATH...................................37 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.......................38 DETERMINATION OF BENEFITS UPON TERMINATION.............................38 DISTRIBUTION OF BENEFITS...............................................41 DISTRIBUTION OF BENEFITS UPON DEATH....................................43 TIME OF SEGREGATION OR DISTRIBUTION....................................44 DISTRIBUTION FOR MINOR BENEFICIARY.....................................44 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.........................44 PRE-RETIREMENT DISTRIBUTION............................................44 ADVANCE DISTRIBUTION FOR HARDSHIP......................................45 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION........................46 DIRECT ROLLOVER........................................................46 ELIMINATION OF LOOKBACK RULE...........................................47

ARTICLE VII AMENDMENT, TERMINATION, MERGERS AND LOANS 7.1 7.2 7.3 7.4 AMENDMENT..............................................................48 TERMINATION............................................................48 MERGER OR CONSOLIDATION................................................49 LOANS TO PARTICIPANTS..................................................49 ARTICLE VIII MISCELLANEOUS 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14 8.15 PARTICIPANT'S RIGHTS...................................................50 ALIENATION.............................................................51 CONSTRUCTION OF PLAN...................................................51 GENDER AND NUMBER......................................................51 LEGAL ACTION...........................................................52 PROHIBITION AGAINST DIVERSION OF FUNDS.................................52 BONDING................................................................52 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.............................53 INSURER'S PROTECTIVE CLAUSE............................................53 RECEIPT AND RELEASE FOR PAYMENTS.......................................53 ACTION BY THE EMPLOYER.................................................53 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.....................53 HEADINGS...............................................................54 APPROVAL BY INTERNAL REVENUE SERVICE...................................54 UNIFORMITY.............................................................55 ARTICLE IX PARTICIPATING EMPLOYERS 9.1 9.2 ADOPTION BY OTHER EMPLOYERS............................................55 REQUIREMENTS OF PARTICIPATING EMPLOYERS................................55

9.3 9.4 9.5 9.6 9.7 9.8 9.9

DESIGNATION OF AGENT...................................................56 EMPLOYEE TRANSFERS.....................................................56 PARTICIPATING EMPLOYER CONTRIBUTION....................................56 AMENDMENT..............................................................56 DISCONTINUANCE OF PARTICIPATION........................................57 ADMINISTRATOR'S AUTHORITY..............................................57 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE......................57

CENTRAL HUDSON GAS & ELECTRIC CORPORATION SAVINGS INCENTIVE PLAN THIS PLAN, hereby adopted this 1st day of October, 2001, by Central Hudson Gas & Electric Corporation (herein referred to as the "Employer"). WITNESSETH: WHEREAS, the Employer heretofore established a Profit Sharing Plan effective Januay 1, 1984, (hereinafter called the "Effective Date") known as Central Hudson Gas & Electric Corporation Savings Incentive Plan (herein referred to as the "Plan") in recognition of the contribution made to its successful operation by its employees and for the exclusive benefit of its eligible employees; and WHEREAS, under the terms of the Plan, the Employer has the ability to amend the Plan, provided the Trustee joins in such amendment if the provisions of the Plan affecting the Trustee are amended; NOW, THEREFORE, effective October 1, 2001, except as otherwise provided, the Employer in accordance with the provisions of the Plan pertaining to amendments thereof, hereby amends the Plan in its entirety and restates the Plan to provide as follows: ARTICLE I DEFINITIONS 1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. 1.2 "Administrator" means the Employer unless another person or entity has been designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. 1.3 "Affiliated Employer" means any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business (whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Regulations under Code Section 414(o). 1.4 "Anniversary Date" means December 31. 1

1.5 "Beneficiary" means the person to whom the share of a deceased Participant's total account is payable, subject to the restrictions of Sections 6.2 and 6.6. 1.6 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time. 1.7 "Compensation" with respect to any Participant means such Participant's wages for the Plan Year within the meaning of Code Section 3401(a) (for the purposes of income tax withholding at the source) but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401 (a)(2)). For purposes of this Section, the determination of Compensation shall be made by: (a) excluding overtime. (b) excluding commissions. (c) excluding bonuses. (d) including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403 (b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions. For a Participant's initial year of participation, Compensation shall be recognized as of such Employee's effective date of participation pursuant to Section 3.2. Compensation in excess of $150,000 shall be disregarded. Such amount shall be adjusted for increases in the cost of living in accordance with Code Section 401(a)(17), except that the dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year beginning with or within such calendar year. For any short Plan Year the Compensation limit shall be an amount equal to the Compensation limit for the calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12). For purposes of this Section, if the Plan is a plan described in Code 2

Section 413(c) or 414(f) (a plan maintained by more than one Employer), the limitation applies separately with respect to the Compensation of any Participant from each Employer maintaining the Plan. If, in connection with the adoption of this amendment and restatement, the definition of Compensation has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of this amendment and restatement, Compensation means compensation determined pursuant to the Plan then in effect. 1.8 "Contract" or "Policy" means any life insurance policy, retirement income or annuity policy or annuity contract (group or individual) issued pursuant to the terms of the Plan. 1.9 "Deferred Compensation" with respect to any Participant means the amount of the Participant's total Compensation which has been contributed to the Plan in accordance with the Participant's deferral election pursuant to Section 4.2 excluding any such amounts distributed as excess "annual additions" pursuant to Section 4.10(a). 1.10 "Designated Investment Alternative" means a specific investment identified by name by a Fiduciary as an available investment under the Plan which may be acquired or disposed of by the Trustee pursuant to the investment direction by a Participant. 1.11 "Directed Investment Option" means one or more of the following: (a) a Designated Investment Alternative. (b) any other investment permitted by the Plan and the Participant Direction Procedures and acquired or disposed of by the Trustee pursuant to the investment direction of a Participant. 1.12 "Early Retirement Date" means the first day of the month (prior to the Normal Retirement Date) coinciding with or following the date on which a Participant or Former Participant attains age 55, and has completed at least 10 Years of Service with the Employer (Early Retirement Age). A Participant shall become fully Vested upon satisfying this requirement if still employed at his Early Retirement Age. A Former Participant who terminates employment after satisfying the service requirement for Early Retirement and who thereafter reaches the age requirement contained herein shall be entitled to receive his benefits under this Plan. 1.13 "Elective Contribution" means the Employer contributions to the Plan of Deferred Compensation excluding any such amounts distributed as excess "annual additions" pursuant to Section 4.10(a). In addition, any Employer Qualified Non-Elective Contribution made pursuant to Section 4.1(c) and Section 4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests shall be considered an Elective 3

Contribution for purposes of the Plan. Any contributions deemed to be Elective Contributions (whether or not used to satisfy the "Actual Deferral Percentage" tests) shall be subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be required to satisfy the nondiscrimination requirements of Regulation 1.401(k)-1 (b)(5), the provisions of which are specifically incorporated herein by reference. 1.14 "Eligible Employee" means any Employee. Employees who are Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this Plan. Employees of Affiliated Employers shall not be eligible to participate in this Plan unless such Affiliated Employers have specifically adopted this Plan in writing. 1.15 "Employee" means any person who is employed by the Employer or Affiliated Employer. Employee shall include Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan described in Code Section 414(n)(5) and such Leased Employees do not constitute more than 20% of the recipient's non- highly compensated work force. 1.16 "Employer" means Central Hudson Gas & Electric Corporation and any successor which shall maintain this Plan; and any predecessor which has maintained this Plan. The Employer is a corporation, with principal offices in the State of New York. In addition, where appropriate, the term Employer shall include any Participating Employer (as defined in Section 9.1) which shall adopt this Plan. 1.17 "Excess Aggregate Contributions" means, with respect to any Plan Year, the excess of the aggregate amount of the Employer matching contributions made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary Employee contributions pursuant to Section 4.6(a) and any qualified non-elective contributions or elective deferrals taken into account pursuant to Section 4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the maximum amount of such contributions permitted under the limitations of Section 4.7(a). 1.18 "Excess Contributions" means, with respect to a Plan Year, the excess of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests made on behalf of Highly Compensated Participants for the Plan Year over the maximum amount of such contributions permitted under Section 4.5(a). Excess Contributions, including amounts recharacterized pursuant to Section 4.6(a)(2), shall be treated as an "annual addition" pursuant to Section 4.9(b). 4

1.19 "Excess Deferred Compensation" means, with respect to any taxable year of a Participant, the excess of the aggregate amount of such Participant's Deferred Compensation and the elective deferrals pursuant to Section 4.2(f) actually made on behalf of such Participant for such taxable year, over the dollar limitation provided for in Code Section 402(g), which is incorporated herein by reference. Excess Deferred Compensation shall be treated as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan unless distributed to the affected Participant not later than the first April 15th following the close of the Participant's taxable year. However, Excess Deferred Compensation of Non-Highly Compensated Participants is not taken into account for purposes of Section 4.5(a) to the extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d). 1.20 "Fiduciary" means any person who (a) exercises any discretionary authority or discretionary control respecting management of the Plan or exercises any authority or control respecting management or disposition of its assets, (b) renders investment advice for a fee or other compensation, direct or indirect, with respect to any monies or other property of the Plan or has any authority or responsibility to do so, or (c) has any discretionary authority or discretionary responsibility in the administration of the Plan, including, but not limited to, the Trustee, the Employer and its representative body, and the Administrator. 1.21 "Fiscal Year" means the Employer's accounting year of 12 months commencing on January 1 of each year and ending the following December 31. 1.22 "Former Participant" means a person who has been a Participant, but who has ceased to be a Participant for any reason. 1.23 "415 Compensation" with respect to any Participant means such Participant's wages for the Plan Year within the meaning of Code Section 3401(a) (for the purposes of income tax withholding at the source) but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401 (a)(2)). For Plan Years beginning after December 31, 1997, for purposes of this Section, the determination of "415 Compensation" shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed or deferred by the Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of Code Sections 125 or 457. If, in connection with the adoption of this amendment and restatement, the definition of "415 Compensation" has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of this amendment and restatement, "415 Compensation" means compensation determined pursuant to the Plan then in effect. 5

1.24 "414(s) Compensation" with respect to any Participant means such Participant's Elective Contributions attributable to Deferred Compensation recharacterized as voluntary Employee contributions pursuant to Section 4.6(a) plus "415 Compensation" paid during a Plan Year. The amount of "414(s) Compensation" with respect to any Participant shall include "414(s) Compensation" for the entire twelve (12) month period ending on the last day of such Plan Year, except that "414(s) Compensation" shall only be recognized for that portion of the Plan Year during which an Employee was a Participant in the Plan. For purposes of this Section, the determination of "414(s) Compensation" shall be made by including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions. "414(s) Compensation" in excess of $150,000 shall be disregarded. Such amount shall be adjusted for increases in the cost of living in accordance with Code Section 401 (a)(17), except that the dollar increase in effect on January 1 of any calendar year shall be effective for the Plan Year beginning with or within such calendar year. For any short Plan Year the "414(s) Compensation" limit shall be an amount equal to the "414(s) Compensation" limit for the calendar year in which the Plan Year begins multiplied by the ratio obtained by dividing the number of full months in the short Plan Year by twelve (12). If, in connection with the adoption of this amendment and restatement, the definition of "414(s) Compensation" has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of this amendment and restatement, "414(s) Compensation" means compensation determined pursuant to the Plan then in effect. 1.25 "Highly Compensated Employee" means, for Plan Years beginning after December 31, 1996, an Employee described in Code Section 414(q) and the Regulations thereunder, and generally means an Employee who performed services for the Employer during the "determination year" and is in one or more of the following groups: (a) Employees who at any time during the "determination year" or "look-back year" were "five percent owners" of the Employer. "Five percent owner" means any person who owns (or is considered as owning within the meaning of Code Section 318) more than five percent of the outstanding stock of the Employer or stock possessing more than five percent of the total combined voting power of all stock of the Employer or, in the case of an unincorporated business, any person who owns more than five percent of the capital or profits interest in the 6

Employer. In determining percentage ownership hereunder, employers that would otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as separate employers. (b) Employees who received "415 Compensation" during the "look-back year" from the Employer in excess of $80,000 and were in the Top Paid Group of Employees for the Plan Year. The "look-back year" shall be the calendar year ending with or within the Plan Year for which testing is being performed, and the "determination year" (if applicable) shall be the period of time, if any, which extends beyond the "look-back year" and ends on the last day of the Plan Year for which testing is being performed (the "lag period"). If the "lag period" is less than twelve months long, the dollar threshold amounts specified in (b), (c) and (d) above shall be prorated based upon the number of months in the "lag period." For purposes of this Section, the determination of "415 Compensation" shall be made by including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions. Additionally, the dollar threshold amount specified in (b) above shall be adjusted at such time and in the same manner as under Code Section 415(d), except that the base period shall be the calendar quarter ending September 30, 1996. In the case of such an adjustment, the dollar limit which shall be applied is the limit for the calendar year in which the "look-back year" begins. In determining who is a Highly Compensated Employee, Employees who are non-resident aliens and who received no earned income (within the meaning of Code Section 911 (d)(2)) from the Employer constituting United States source income within the meaning of Code Section 861 (a)(3) shall not be treated as Employees. Additionally, all Affiliated Employers shall be taken into account as a single employer and Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased Employees are covered by a plan described in Code Section 414(n)(5) and are not covered in any qualified plan maintained by the Employer. The exclusion of Leased Employees for this purpose shall be applied on a uniform and consistent basis for all of the Employer's retirement plans. Highly Compensated Former Employees shall be treated as Highly Compensated Employees without regard to whether they performed services during the "determination year." 1.26 "Highly Compensated Former Employee" means a former Employee who had a separation year prior to the "determination year" and was a Highly Compensated Employee in the year of separation from service or in any "determination year" after attaining age 55. Notwithstanding the foregoing, an Employee who separated from service prior to 1987 will be treated as a Highly Compensated Former Employee only if during the separation year (or year 7

preceding the separation year) or any year after the Employee attains age 55 (or the last year ending before the Employee's 55th birthday), the Employee either received "415 Compensation" in excess of $50,000 or was a "five percent owner." For purposes of this Section, "determination year," "415 Compensation" and "five percent owner" shall be determined in accordance with Section 1.25. Highly Compensated Former Employees shall be treated as Highly Compensated Employees. The method set forth in this Section for determining who is a "Highly Compensated Former Employee" shall be applied on a uniform and consistent basis for all purposes for which the Code Section 414(q) definition is applicable. 1.27 "Highly Compensated Participant" means any Highly Compensated Employee who is eligible to participate in the Plan. 1.28 "Hour of Service" means (1) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer for the performance of duties (these hours will be credited to the Employee for the computation period in which the duties are performed); (2) each hour for which an Employee is directly or indirectly compensated or entitled to compensation by the Employer (irrespective of whether the employment relationship has terminated) for reasons other than performance of duties (such as vacation, holidays, sickness, jury duty, disability, lay-off, military duty or leave of absence) during the applicable computation period (these hours will be calculated and credited pursuant to Department of Labor regulation 2530.200b-2 which is incorporated herein by reference); (3) each hour for which back pay is awarded or agreed to by the Employer without regard to mitigation of damages (these hours will be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made). The same Hours of Service shall not be credited both under (1) or (2), as the case may be, and under (3). Notwithstanding the above, (i) no more than 501 Hours of Service are required to be credited to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period); (ii) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker's compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service are not required to be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. For purposes of this Section, a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for 8

the benefit of particular Employees or are on behalf of a group of Employees in the aggregate. For purposes of this Section, Hours of Service will be credited for employment with other Affiliated Employers. The provisions of Department of Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference. 1.29 "Investment Manager" means an entity that (a) has the power to manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility to the Plan in writing. Such entity must be a person, firm, or corporation registered as an investment adviser under the Investment Advisers Act of 1940, a bank, or an insurance company. 1.30 "Late Retirement Date" means the first day of the month coinciding with or next following a Participant's actual Retirement Date after having reached his Normal Retirement Date. 1.31 "Leased Employee" means any person (other than an Employee of the recipient) who pursuant to an agreement between the recipient and any other person ("leasing organization") has performed services for the recipient (or for the recipient and related persons determined in accordance with Code Section 414(n)(6)) on a substantially full time basis for a period of at least one year, and such services are of a type historically performed by employees in the business field of the recipient employer. Contributions or benefits provided a Leased Employee by the leasing organization which are attributable to services performed for the recipient employer shall be treated as provided by the recipient employer. A Leased Employee shall not be considered an Employee of the recipient: (a) if such employee is covered by a money purchase pension plan providing: (1) a non-integrated employer contribution rate of at least 10% of compensation, as defined in Code Section 415(c)(3), but including amounts which are contributed by the Employer pursuant to a salary reduction agreement and which are not includible in the gross income of the Participant under Code Sections 125, 402(e) (3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions. (2) immediate participation; and (3) full and immediate vesting; and (b) if Leased Employees do not constitute more than 20% of the recipient's non-highly compensated work force. 9

1.32 "Net Profit" means with respect to any Fiscal Year the Employer's net income or profit for such Fiscal Year determined upon the basis of the Employer's books of account in accordance with generally accepted accounting principles, without any reduction for taxes based upon income, or for contributions made by the Employer to this Plan. 1.33 "Non-Elective Contribution" means the Employer contributions to the Plan excluding, however, contributions made pursuant to the Participant's deferral election provided for in Section 4.2 and any Qualified Non-Elective Contribution used in the "Actual Deferral Percentage" tests. 1.34 "Non-Highly Compensated Participant" means any Participant who is neither a Highly Compensated Employee nor a Family Member. 1.35 "Normal Retirement Age" means the Participant's 65th birthday. A Participant shall become fully Vested in his Participant's Account upon attaining his Normal Retirement Age. 1.36 "Normal Retirement Date" means the first day of the month coinciding with or next following the Participant's Normal Retirement Age. 1.37 "Participant" means any Eligible Employee who participates in the Plan and has not for any reason become ineligible to participate further in the Plan. 1.38 "Participant Direction Procedures" means such instructions, guidelines or policies, the terms of which are incorporated herein, as shall be established pursuant to Section 4.13 and observed by the Administrator and applied and provided to Participants who have Participant Directed Accounts. 1.39 "Participant's Account" means the account established and maintained by the Administrator for each Participant with respect to his total interest in the Plan and Trust resulting from the Employer Non-Elective Contributions. A separate accounting shall be maintained with respect to that portion of the Participant's Account attributable to Employer matching contributions made pursuant to Section 4.1(b), Employer discretionary contributions made pursuant to Section 4.1(d) and any Employer Qualified Non- Elective Contributions. 1.40 "Participant's Combined Account" means the total aggregate amount of each Participant's Elective Account and Participant's Account. 1.41 "Participant's Directed Account" means that portion of a Participant's interest in the Plan with respect to which the Participant has directed the investment in accordance with the Participant Direction Procedure. 1.42 "Participant's Elective Account" means the account established and maintained by the Administrator for each Participant with respect to his total interest 10

in the Plan and Trust resulting from the Employer Elective Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate accounting shall be maintained with respect to that portion of the Participant's Elective Account attributable to such Elective Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective Contributions. 1.43 "Plan" means this instrument, including all amendments thereto. 1.44 "Plan Year" means the Plan's accounting year of twelve (12) months commencing on January 1 of each year and ending the following December 31. 1.45 "Qualified Non-Elective Contribution" means any Employer contributions made pursuant to Section 4.1(c) and Section 4.6(b) and Section 4.8(g). Such contributions shall be considered an Elective Contribution for the purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage" tests or the "Actual Contribution Percentage" tests. 1.46 "Regulation" means the Income Tax Regulations as promulgated by the Secretary of the Treasury or his delegate, and as amended from time to time. 1.47 "Retired Participant" means a person who has been a Participant, but who has become entitled to retirement benefits under the Plan. 1.48 "Retirement Date" means the date as of which a Participant retires for reasons other than Total and Permanent Disability, whether such retirement occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date (see Section 6.1). 1.49 "Terminated Participant" means a person who has been a Participant, but whose employment has been terminated other than by death, Total and Permanent Disability or retirement. 1.50 "Top Paid Group" means the top 20 percent of Employees who performed services for the Employer during the applicable year, ranked according to the amount of "415 Compensation" (determined for this purpose in accordance with Section 1.25) received from the Employer during such year. All Affiliated Employers shall be taken into account as a single employer, and Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased Employees are covered by a plan described in Code Section 414(n)(5) and are not covered in any qualified plan maintained by the Employer. Employees who are non-resident aliens and who received no earned income (within the meaning of Code Section 911 (d)(2)) from the Employer constituting United States source income within the meaning of Code Section 861 (a)(3) shall not be treated as Employees. Additionally, for the purpose of determining the number of active Employees in any year, the following additional Employees shall also be excluded; however, such Employees shall still be considered for the purpose of identifying the particular Employees in the Top Paid Group: 11

(a) Employees with less than six (6) months of service; (b) Employees who normally work less than 17 1/2 hours per week; (c) Employees who normally work less than six (6) months during a year; and (d) Employees who have not yet attained age 21. In addition, if 90 percent or more of the Employees of the Employer are covered under agreements the Secretary of Labor finds to be collective bargaining agreements between Employee representatives and the Employer, and the Plan covers only Employees who are not covered under such agreements, then Employees covered by such agreements shall be excluded from both the total number of active Employees as well as from the identification of particular Employees in the Top Paid Group. The foregoing exclusions set forth in this Section shall be applied on a uniform and consistent basis for all purposes for which the Code Section 414(q) definition is applicable. 1.51 "Total and Permanent Disability" means a physical or mental condition of a Participant resulting from bodily injury, disease, or mental disorder which renders him incapable of continuing any gainful occupation and which condition constitutes total disability under the federal Social Security Acts. 1.52 "Trustee" means the person or entity named as trustee herein or in any separate trust forming a part of this Plan, and any successors. 1.53 "Trust Fund" means the assets of the Plan and Trust as the same shall exist from time to time. 1.54 "USERRA" means the Uniformed Services Employment and Reemployment Rights Act of 1994. Notwithstanding any provision of this Plan to the contrary, effective December 12,1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414 (u). 1.55 "Valuation Date" means the Anniversary Date and such other date or dates deemed necessary by the Administrator. The Valuation Date may include any day during the Plan Year that the Trustee, any transfer agent appointed by the Trustee or the Employer and any stock exchange used by such agent are open for business. 12

1.56 "Vested" means the nonforfeitable portion of any account maintained on behalf of a Participant. 1.57 "Voluntary Contribution Account" means the account established and maintained by the Administrator for each Participant with respect to his total interest in the Plan resulting from the Participant's nondeductible voluntary contributions made pursuant to Section 4.12. Amounts recharacterized as voluntary Employee contributions pursuant to Section 4.6(a) shall remain subject to the limitations of Sections 4.2(b) and 4.2(c). Therefore, a separate accounting shall be maintained with respect to that portion of the Voluntary Contribution Account attributable to voluntary Employee contributions made pursuant to Section 4.12. 1.58 "Year of Service" means the computation period of twelve (12) consecutive months, herein set forth, during which an Employee has at least 1000 Hours of Service. The computation period shall be the Plan Year if not otherwise set forth herein. Notwithstanding the foregoing, for any short Plan Year, the determination of whether an Employee has completed a Year of Service shall be made in accordance with Department of Labor regulation 2530.203-2(c). Years of Service with any Affiliated Employer shall be recognized. ARTICLE II ADMINISTRATION 2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER (a) In addition to the general powers and responsibilities otherwise provided for in this Plan, the Employer shall be empowered to appoint and remove the Trustee and the Administrator from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan, the Code, and the Act. The Employer may appoint counsel, specialists, advisers, agents (including any nonfiduciary agent) and other persons as the Employer deems necessary or desirable in connection with the exercise of its fiduciary duties under this Plan. The Employer may compensate such agents or advisers from the assets of the Plan as fiduciary expenses (but not including any business (settlor) 13

expenses of the Employer), to the extent not paid by the Employer. (b) The Employer shall establish a "funding policy and method," i.e., it shall determine whether the Plan has a short run need for liquidity (e.g., to pay benefits) or whether liquidity is a long run goal and investment growth (and stability of same) is a more current need, or shall appoint a qualified person to do so. The Employer or its delegate shall communicate such needs and goals to the Trustee, who shall coordinate such Plan needs with its investment policy. The communication of such a "funding policy and method" shall not, however, constitute a directive to the Trustee as to investment of the Trust Funds. Such "funding policy and method" shall be consistent with the objectives of this Plan and with the requirements of Title I of the Act. (c) The Employer shall periodically review the performance of any Fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures established hereunder. This requirement may be satisfied by formal periodic review by the Employer or by a qualified person specifically designated by the Employer, through day-to-day conduct and evaluation, or through other appropriate ways. 2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY The Employer shall be the Administrator. The Employer may appoint any person, including, but not limited to, the Employees of the Employer, to perform the duties of the Administrator. Any person so appointed shall signify his acceptance by filing written acceptance with the Employer. Upon the resignation or removal of any individual performing the duties of the Administrator, the Employer may designate a successor. 2.3 POWERS AND DUTIES OF THE ADMINISTRATOR The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan under the terms of Code Section 401(a), and shall comply with the terms of the 14

Act and all regulations issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish his duties under this Plan. The Administrator shall be charged with the duties of the general administration of the Plan, including, but not limited to, the following: (a) the discretion to determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Plan; (b) to compute, certify, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder; (c) to authorize and direct the Trustee with respect to all nondiscretionary or otherwise directed disbursements from the Trust; (d) to maintain all necessary records for the administration of the Plan; (e) to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan as are consistent with the terms hereof; (f) to determine the size and type of any Contract to be purchased from any insurer, and to designate the insurer from which such Contract shall be purchased; (g) to compute and certify to the Employer and to the Trustee from time to time the sums of money necessary or desirable to be contributed to the Plan; (h) to consult with the Employer and the Trustee regarding the short and long-term liquidity needs of the Plan in order that the Trustee can exercise any investment discretion in a manner designed to accomplish specific objectives; (i) to prepare and implement a procedure to notify Eligible Employees that they may elect to have a portion of their Compensation deferred or paid to them in cash; (j) to act as the named Fiduciary responsible for communications with Participants as needed to maintain Plan compliance with ERISA Section 404(c), including but not limited to the receipt and transmitting of Participant's directions as to the investment of their account(s) under the Plan and the formulation of policies, rules, and procedures pursuant to which Participants may give investment 15

instructions with respect to the investment of their accounts; (k) to assist any Participant regarding his rights, benefits, or elections available under the Plan. 2.4 RECORDS AND REPORTS The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, policies, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue Service, Department of Labor, Participants, Beneficiaries and others as required by law. 2.5 APPOINTMENT OF ADVISERS The Administrator, or the Trustee with the consent of the Administrator, may appoint counsel, specialists, advisers, agents (including nonfiduciary agents) and other persons as the Administrator or the Trustee deems necessary or desirable in connection with the administration of this Plan, including but not limited to agents and advisers to assist with the administration and management of the Plan, and thereby to provide, among such other duties as the Administrator may appoint, assistance with maintaining Plan records and the providing of investment information to the Plan's investment fiduciaries and to Plan Participants. 2.6 PAYMENT OF EXPENSES All expenses of administration may be paid out of the Trust Fund unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, or any person or persons retained or appointed by any Named Fiduciary incident to the exercise of their duties under the Plan, including, but not limited to, fees of accountants, counsel, Investment Managers, agents (including nonfiduciary agents) appointed for the purpose of assisting the Administrator or the Trustee in carrying out the instructions of Participants as to the directed investment of their accounts and other specialists and their agents, and other costs of administering the Plan. Until paid, the expenses shall constitute a liability of the Trust Fund. 2.7 CLAIMS PROCEDURE Claims for benefits under the Plan may be filed in writing with the Administrator. Written notice of the disposition of a claim shall be furnished to the claimant within 90 days after the application is filed. In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided. In addition, the claimant shall be furnished with an explanation 16

of the Plan's claims review procedure. 2.8 CLAIMS REVIEW PROCEDURE Any Employee, former Employee, or Beneficiary of either, who has been denied a benefit by a decision of the Administrator pursuant to Section 2.7 shall be entitled to request the Administrator to give further consideration to his claim by filing with the Administrator (on a form which may be obtained from the Administrator) a request for a hearing. Such request, together with a written statement of the reasons why the claimant believes his claim should be allowed, shall be filed with the Administrator no later than 60 days after receipt of the written notification provided for in Section 2.7. The Administrator shall then conduct a hearing within the next 60 days, at which the claimant may be represented by an attorney or any other representative of his choosing and at which the claimant shall have an opportunity to submit written and oral evidence and arguments in support of his claim. At the hearing (or prior thereto upon 5 business days written notice to the Administrator) the claimant or his representative shall have an opportunity to review all documents in the possession of the Administrator which are pertinent to the claim at issue and its disallowance. Either the claimant or the Administrator may cause a court reporter to attend the hearing and record the proceedings. In such event, a complete written transcript of the proceedings shall be furnished to both parties by the court reporter. The full expense of any such court reporter and such transcripts shall be borne by the party causing the court reporter to attend the hearing. A final decision as to the allowance of the claim shall be made by the Administrator within 60 days of receipt of the appeal (unless there has been an extension of 60 days due to special circumstances, provided the delay and the special circumstances occasioning it are communicated to the claimant within the 60 day period). Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based. ARTICLE III ELIGIBILITY 3.1 CONDITIONS OF ELIGIBILITY Any Eligible Employee shall be eligible to participate hereunder on the date of his employment with the Employer. However, any Employee who was a Participant in the Plan prior to the effective date of this amendment and restatement shall continue to participate in the Plan. 3.2 EFFECTIVE DATE OF PARTICIPATION An Eligible Employee shall become a Participant effective as of the date on which he satisfies the eligibility requirements of Section 3.1. 17

In the event an Employee who is not a member of an eligible class of Employees becomes a member of an eligible class, such Employee will participate immediately if such Employee would have otherwise previously become a Participant. 3.3 DETERMINATION OF ELIGIBILITY The Administrator shall determine the eligibility of each Employee for participation in the Plan based upon information furnished by the Employer. Such determination shall be conclusive and binding upon all persons, as long as the same is made pursuant to the Plan and the Act. Such determination shall be subject to review per Section 2.8. 3.4 TERMINATION OF ELIGIBILITY (a) In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Former Participant shall continue to vest in his interest in the Plan for each Year of Service completed while a noneligible Employee, until such time as his Participant's Account shall be forfeited or distributed pursuant to the terms of the Plan. Additionally, his interest in the Plan shall continue to share in the earnings of the Trust Fund. (b) In the event a Participant is no longer a member of an eligible class of Employees and becomes ineligible to participate, such Employee will participate immediately upon returning to an eligible class of Employees. 3.5 OMISSION OF ELIGIBLE EMPLOYEE If, in any Plan Year, any Employee who should be included as a Participant in the Plan is erroneously omitted and discovery of such omission is not made until after a contribution by his Employer for the year has been made, the Employer shall make a subsequent contribution with respect to the omitted Employee in the amount which the said Employer would have contributed with respect to him had he not been omitted. Such contribution shall be made regardless of whether or not it is deductible in whole or in part in any taxable year under applicable provisions of the Code. 3.6 INCLUSION OF INELIGIBLE EMPLOYEE If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the Employer shall not be entitled to recover the contribution made with respect to the ineligible person regardless of whether or not a deduction is allowable with respect to such contribution. In such event, the amount contributed with respect to the ineligible person shall constitute a Forfeiture (except for Deferred Compensation which shall be 18

distributed to the ineligible person) for the Plan Year in which the discovery is made. 3.7 ELECTION NOT TO PARTICIPATE An Employee may, subject to the approval of the Employer, elect voluntarily not to participate in the Plan. The election not to participate must be communicated to the Employer, in writing, at least thirty (30) days before the beginning of a Plan Year. ARTICLE IV CONTRIBUTION AND ALLOCATION 4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION For each Plan Year, the Employer shall contribute to the Plan: (a) The amount of the total salary reduction elections of all Participants made pursuant to Section 4.2(a), which amount shall be deemed an Employer Elective Contribution. (b) On behalf of each Participant who is eligible to share in matching contributions for the Plan Year, a discretionary matching contribution equal to a uniform percentage of each such Participant's Deferred Compensation, the exact percentage, if any, to be determined each year by the Employer, which amount, if any, shall be deemed an Employer Non-Elective Contribution. Except, however, in applying the matching percentage specified above, only salary reductions up to 6% of Compensation for Participants subject to a collective bargaining agreement and 8% of Compensation for all other Participants shall be considered. (c) On behalf of each Non-Highly Compensated Participant who is eligible to share in the Qualified Non-Elective Contribution for the Plan Year, a discretionary Qualified Non- Elective Contribution equal to a uniform percentage of each eligible individual's Compensation, the exact percentage, if any, to be determined each year by the Employer. Any Employer Qualified Non-Elective Contribution shall be deemed an Employer Elective Contribution. (d) A discretionary amount out of its current or accumulated Net Profits, which amount, if any, shall be deemed an Employer Non-Elective Contribution. (e) All contributions by the Employer shall be made in cash. 4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 19

(a) Each Participant may elect to defer from 1% to 12% of his Compensation which would have been received in the Plan Year, but for the deferral election. A deferral election (or modification of an earlier election) may not be made with respect to Compensation which is currently available on or before the date the Participant executed such election. For purposes of this Section, Compensation shall be determined prior to any reductions made pursuant to Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code Section 414(h)(2) that are treated as Employer contributions. The amount by which Compensation is reduced shall be that Participant's Deferred Compensation and be treated as an Employer Elective Contribution and allocated to that Participant's Elective Account. (b) The balance in each Participant's Elective Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason. (c) Notwithstanding anything in the Plan to the contrary, amounts held in the Participant's Elective Account may not be distributable (including any offset of loans) earlier than: (1) a Participant's separation from service, Total and Permanent Disability, or death; (2) Participant's attainment of age 59 1/2; (3) the termination of the Plan without the establishment or existence of a "successor plan," as that term is described in Regulation 1.401(k)-1(d)(3); (4) the date of disposition by the Employer to an entity that is not an Affiliated Employer of substantially all of the assets (within the meaning of Code Section 409(d)(2)) used in a trade or business of such corporation if such corporation continues to maintain this Plan after the disposition with respect to a Participant who continues employment with the corporation acquiring such assets; (5) the date of disposition by the Employer or an Affiliated Employer who maintains the Plan of its interest in a subsidiary (within the meaning of Code Section 409(d)(3)) to an entity which is not an Affiliated Employer but only with respect to a Participant who continues employment with such subsidiary; or 20

(6) the proven financial hardship of a Participant, subject to the limitations of Section 6.11. (d) For each Plan Year, a Participant's Deferred Compensation made under this Plan and all other plans, contracts or arrangements of the Employer maintaining this Plan shall not exceed, during any taxable year of the Participant, the limitation imposed by Code Section 402(g), as in effect at the beginning of such taxable year. If such dollar limitation is exceeded, a Participant will be deemed to have notified the Administrator of such excess amount which shall be distributed in a manner consistent with Section 4.2(f). The dollar limitation shall be adjusted annually pursuant to the method provided in Code Section 415(d) in accordance with Regulations. (e) In the event a Participant has received a hardship distribution pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the Employer, then such Participant shall not be permitted to elect to have Deferred Compensation contributed to the Plan on his behalf for a period of twelve (12) months following the receipt of the distribution. Furthermore, the dollar limitation under Code Section 402(g) shall be reduced, with respect to the Participant's taxable year following the taxable year in which the hardship distribution was made, by the amount of such Participant's Deferred Compensation, if any, pursuant to this Plan (and any other plan maintained by the Employer) for the taxable year of the hardship distribution. (f) If a Participant's Deferred Compensation under this Plan together with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under another qualified cash or deferred arrangement (as defined in Code Section 401(k)), a simplified employee pension (as defined in Code Section 408(k)), a salary reduction arrangement (within the meaning of Code Section 3121 (a)(5)(D)), a deferred compensation plan under Code Section 457(b), or a trust described in Code Section 501 (c)(18) cumulatively exceed the limitation imposed by Code Section 402(g) (as adjusted annually in accordance with the method provided in Code Section 415(d) pursuant to Regulations) for such Participant's taxable year, the Participant may, not later than March 1 following the close of the Participant's taxable year, notify the Administrator in writing of such excess and request that his Deferred Compensation under this Plan be reduced by an amount specified by the Participant. In such event, the Administrator may direct the Trustee to distribute such excess amount (and any Income allocable to such excess amount) to the Participant not later than the first April 15th following the close of the Participant's taxable year. Any distribution of less than the entire amount of Excess Deferred Compensation and Income shall be treated as a pro rata distribution of Excess Deferred Compensation and 21

Income. The amount distributed shall not exceed the Participant's Deferred Compensation under the Plan for the taxable year (and any Income allocable to such excess amount). Any distribution on or before the last day of the Participant's taxable year must satisfy each of the following conditions: (1) the distribution must be made after the date on which the Plan received the Excess Deferred Compensation; (2) the Participant shall designate the distribution as Excess Deferred Compensation; and (3) the Plan must designate the distribution as a distribution of Excess Deferred Compensation. Any distribution made pursuant to this Section 4.2(f) shall be made first from unmatched Deferred Compensation and, thereafter, from Deferred Compensation which is matched. Matching contributions which relate to such Deferred Compensation shall be forfeited. (g) Notwithstanding Section 4.2(f) above, a Participant's Excess Deferred Compensation shall be reduced, but not below zero, by any distribution and/or recharacterization of Excess Contributions pursuant to Section 4.6(a) for the Plan Year beginning with or within the taxable year of the Participant. (h) At Normal Retirement Date, or such other date when the Participant shall be entitled to receive benefits, the fair market value of the Participant's Elective Account shall be used to provide additional benefits to the Participant or his Beneficiary. (i) Employer Elective Contributions made pursuant to this Section may be segregated into a separate account for each Participant in a federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate, or other short-term debt security acceptable to the Trustee until such time as the allocations pursuant to Section 4.4 have been made. (j) The Employer and the Administrator shall implement the salary reduction elections provided for herein in accordance with the following: 4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION The Employer shall generally pay to the Trustee its contribution to the 22

Plan for each Plan Year within the time prescribed by law, including extensions of time, for the filing of the Employer federal income tax return for the Fiscal Year. However, Employer Elective Contributions accumulated through payroll deductions shall be paid to the Trustee as of the earliest date on which such contributions can reasonably be segregated from the Employer general assets, but in any event within ninety (90) days from the date on which such amounts would otherwise have been payable to the Participant in cash. The provisions of Department of Labor regulations 2510.3-102 are incorporated herein by reference. Furthermore, any additional Employer contributions which are allocable to the Participant's Elective Account for a Plan Year shall be paid to the Plan no later than the twelve-month period immediately following the close of such Plan Year. 4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS (a) The Administrator shall establish and maintain an account in the name of each Participant to which the Administrator shall credit as of each Anniversary Date all amounts allocated to each such Participant as set forth herein. (b) The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer contributions for each Plan Year. Within a reasonable period of time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contribution as follows: (1) With respect to the Employer Elective Contribution made pursuant to Section 4.1(a), to each Participant's Elective Account in an amount equal to each such Participant's Deferred Compensation for the year. (2) With respect to the Employer Non-Elective Contribution made pursuant to Section 4.1(b), to each Participant's Account in accordance with Section 4.1(b). Any Participant actively employed during the Plan Year shall be eligible to share in the matching contribution for the Plan Year. However, with respect to Plan Years beginning after December 31, 1989, in lieu of the foregoing, only Participants who are actively employed during the Plan Year shall be eligible to share in the matching contributions for the year. (3) With respect to the Employer Qualified Non-Elective Contribution made pursuant to Section 4.1(c), to each Participant's Elective Account when used to satisfy the "Actual Deferral Percentage" tests or Participant's Account in accordance with Section 4.1(c). 23

Any Non-Highly Compensated Participant actively employed during the Plan Year shall be eligible to share in the Qualified Non-Elective Contribution for the Plan Year. However, with respect to Plan Years beginning after December 31, 1989, in lieu of the foregoing, only Non- Highly Compensated Participants who are actively employed during the Plan Year shall be eligible to share in the Qualified Non-Elective Contribution for the year. (4) With respect to the Employer Non-Elective Contribution made pursuant to Section 4.1(d), to each Participant's Account in the same proportion that each such Participant's Compensation for the year bears to the total Compensation of all Participants for such year. Any Participant actively employed during the Plan Year shall be eligible to share in the discretionary contribution for the year. However, with respect to Plan Years beginning after December 31, 1989, in lieu of the foregoing, only Participants who are actively employed during the Plan Year shall be eligible to share in the discretionary contribution for the year. (c) As of each Anniversary Date any amounts which became Forfeitures since the last Anniversary Date shall first be made available to reinstate previously forfeited account balances of Former Participants, if any, in accordance with Section 6.4(f)(2). The remaining Forfeitures, if any, shall be in the following manner: (1) Forfeitures attributable to Employer discretionary contributions made pursuant to Section 4.1(d) shall be used to reduce the Employer contribution for the Plan Year in which such Forfeitures occur. (d) Notwithstanding the foregoing, Participants who are not actively employed on the last day of the Plan Year due to Retirement (Early, Normal or Late), Total and Permanent Disability or death shall share in the allocation of contributions for that Plan Year. Participants' transfers from other qualified plans and voluntary contributions deposited in the general Trust Fund shall share in any earnings and losses (net appreciation or net depreciation) of the Trust Fund in the same manner provided above. Each segregated account maintained on behalf of a Participant shall be credited or charged with its separate earnings and losses. (e) Notwithstanding anything herein to the contrary, Participants who terminated employment for any reason during the Plan Year shall share in the salary reduction contributions made by the Employer for the year of termination without regard to the Hours of Service credited. (f) If a Former Participant is reemployed after five (5) consecutive 1-Year Breaks in Service, then separate accounts shall be 24

maintained as follows: (1) one account for nonforfeitable benefits attributable to pre- break service; and (2) one account representing his status in the Plan attributable to post-break service. 4.5 ACTUAL DEFERRAL PERCENTAGE TESTS (a) Maximum Annual Allocation: For each Plan Year, the annual allocation derived from Employer Elective Contributions to a Participant's Elective Account shall satisfy one of the following tests: (1) The "Actual Deferral Percentage" for the Highly Compensated Participant group shall not be more than the "Actual Deferral percentage" of the Non-Highly Compensated Participant group multiplied by 1.25, or (2) The excess of the "Actual Deferral Percentage" for the Highly Compensated Participant group over the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group shall not be more than two percentage points. Additionally, the "Actual Deferral Percentage" for the Highly Compensated Participant group shall not exceed the "Actual Deferral Percentage" for the Non-Highly Compensated Participant group multiplied by 2. The provisions of Code Section 401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein by reference. However, in order to prevent the multiple use of the alternative method described in (2) above and in Code Section 401(m)(9)(A), any Highly Compensated Participant eligible to make elective deferrals pursuant to Section 4.2 and to make Employee contributions or to receive matching contributions under this Plan or under any other plan maintained by the Employer or an Affiliated Employer shall have a combination of his actual deferral ratio and his actual contribution ratio reduced pursuant to Section 4.6(a) and Regulation 1.401(m)-2, the provisions of which are incorporated herein by reference. (b) For the purposes of this Section "Actual Deferral Percentage" means, with respect to the Highly Compensated Participant group and Non- Highly Compensated Participant group for a Plan Year, the average of the ratios, calculated separately for each Participant in such group, of the amount of Employer Elective Contributions allocated to each Participant's Elective Account for such Plan Year, to such Participant's "414(s) Compensation" for such Plan Year. The actual deferral 25

ratio for each Participant and the "Actual Deferral Percentage" for each group shall be calculated to the nearest one-hundredth of one percent. Employer Elective Contributions allocated to each Non-Highly Compensated Participant's Elective Account shall be reduced by Excess Deferred Compensation to the extent such excess amounts are made under this Plan or any other plan maintained by the Employer. (c) For the purposes of Sections 4.5(a) and 4.6, a Highly Compensated Participant and a Non-Highly Compensated Participant shall include any Employee eligible to make a deferral election pursuant to Section 4.2, whether or not such deferral election was made or suspended pursuant to Section 4.2. (d) For the purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k), if two or more plans which include cash or deferred arrangements are considered one plan for the purposes of Code Section 401(a) (4) or 410(b) (other than Code Section 410 (b)(2)(A)(ii)), the cash or deferred arrangements included in such plans shall be treated as one arrangement. In addition, two or more cash or deferred arrangements may be considered as a single arrangement for purposes of determining whether or not such arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred arrangements included in such plans and the plans including such arrangements shall be treated as one arrangement and as one plan for purposes of this Section and Code Sections 401(a)(4), 410(b) and 401(k). Plans may be aggregated under this paragraph (e) only if they have the same plan year. Notwithstanding the above, an employee stock ownership plan described in Code Section 4975(e)(7) or 409 may not be combined with this Plan for purposes of determining whether the employee stock ownership plan or this Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k). (e) For the purposes of this Section, if a Highly Compensated Participant is a Participant under two or more cash or deferred arrangements (other than a cash or deferred arrangement which is part of an employee stock ownership plan as defined in Code Section 4975(e)(7) or 409 of the Employer or an Affiliated Employer, all such cash or deferred arrangements shall be treated as one cash or deferred arrangement for the purpose of determining the actual deferral ratio with respect to such Highly Compensated Participant. However, if the cash or deferred arrangements have different plan years, this paragraph shall be applied by treating all cash or deferred arrangements ending with or within the same calendar year as a single arrangement. 4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS In the event that the initial allocations of the Employer Elective Contributions made pursuant to Section 4.4 do not satisfy one of the tests set forth in Section 4.5(a), the Administrator shall adjust Excess Contributions pursuant to the 26

options set forth below: (a) On or before the fifteenth day of the third month following the end of each Plan Year, the Highly Compensated Participant having the highest actual deferral ratio shall have his portion of Excess Contributions distributed to him and/or at his election recharacterized as a voluntary Employee contribution pursuant to Section 4.12 until one of the tests set forth in Section 4.5(a) is satisfied, or until his actual deferral ratio equals the actual deferral ratio of the Highly Compensated Participant having the second highest actual deferral ratio. This process shall continue until one of the tests set forth in Section 4.5(a) is satisfied. For each Highly Compensated Participant, the amount of Excess Contributions is equal to the Elective Contributions used to satisfy the "Actual Deferral Percentage" tests on behalf of such Highly Compensated Participant (determined prior to the application of this paragraph) minus the amount determined by multiplying the Highly Compensated Participant's actual deferral ratio (determined after application of this paragraph) by his "414(s) Compensation." However, in determining the amount of Excess Contributions to be distributed and/or recharacterized with respect to an affected Highly Compensated Participant as determined herein, such amount shall be reduced pursuant to Section 4.2(f) by any Excess Deferred Compensation previously distributed to such affected Highly Compensated Participant for his taxable year ending with or within such Plan Year. (1) With respect to the distribution of Excess Contributions pursuant to (a) above, such distribution: (i) may be postponed but not later than the close of the Plan Year following the Plan Year to which they are allocable; (ii) shall be adjusted for Income; and (iii) shall be designated by the Employer as a distribution of Excess Contributions (and Income). (2) With respect to the recharacterization of Excess Contributions pursuant to (a) above, such recharacterized amounts: (i) shall be deemed to have occurred on the date on which the last of those Highly Compensated Participants with Excess Contributions to be recharacterized is notified of the recharacterization and the tax consequences of such recharacterization; 27

(ii) shall not exceed the amount of Deferred Compensation on behalf of any Highly Compensated Participant for any Plan Year; (iii) shall be treated as voluntary Employee contributions for purposes of Code Section 401 (a)(4) and Regulation 1.401(k)-1(b). Excess Contributions recharacterized as voluntary Employee contributions shall continue to be nonforfeitable and subject to the same distribution rules provided for in Section 4.2(c); (iv) are not permitted if the amount recharacterized plus voluntary Employee contributions actually made by such Highly Compensated Participant, exceed the maximum amount of voluntary Employee contributions (determined prior to application of Section 4.7(a)) that such Highly Compensated Participant is permitted to make under the Plan in the absence of recharacterization; and (v) shall be adjusted for Income. (3) Any distribution and/or recharacterization of less than the entire amount of Excess Contributions shall be treated as a pro rata distribution and/or recharacterization of Excess Contributions and Income. (4) Matching contributions which relate to Excess Contributions shall be forfeited unless the related matching contribution is distributed as an Excess Aggregate Contribution pursuant to Section 4.8. (b) Within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified NonElective Contribution on behalf of Non-Highly Compensated Participants electing salary reductions pursuant to Section 4.2 in an amount sufficient to satisfy one of the tests set forth in Section 4.5(a). Such contribution shall be allocated to the Participant's Elective Account of each Non-Highly Compensated Participant electing salary reductions pursuant to Section 4.2 in the same proportion that each such Non-Highly Compensated Participant's Deferred Compensation for the year bears to the total Deferred Compensation of all such Non-Highly Compensated Participants. (c) If during a Plan Year the projected aggregate amount of Elective Contributions to be allocated to all Highly Compensated Participants under this Plan would, by virtue of the tests set forth in Section 4.5(a), cause the Plan to fail such tests, then the Administrator may automatically reduce proportionately or in the order provided in Section 4.6(a) each affected Highly Compensated Participant's deferral 28

election made pursuant to Section 4.2 by an amount necessary to satisfy one of the tests set forth in Section 4.5 (a). 4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS (a) The "Actual Contribution Percentage" for the Highly Compensated Participant group shall not exceed the greater of: (1) 125 percent of such percentage for the Non-Highly Compensated Participant group; or (2) the lesser of 200 percent of such percentage for the Non-Highly Compensated Participant group, or such percentage for the Non-Highly Compensated Participant group plus 2 percentage points. However, to prevent the multiple use of the alternative method described in this paragraph and Code Section 401 (m)(9)(A), any Highly Compensated Participant eligible to make elective deferrals pursuant to Section 4.2 or any other cash or deterred arrangement maintained by the Employer or an Affiliated Employer and to make Employee contributions or to receive matching contributions under this Plan or under any plan maintained by the Employer or an Affiliated Employer shall have a combination of his actual deferral ratio and his actual contribution ratio reduced pursuant to Regulation 1.401 (m)-2 and Section 4.8(a). The provisions of Code Section 401(m) and Regulations 1.401(m)-1 (b) and 1.401 (m)-2 are incorporated herein by reference. (b) For the purposes of this Section and Section 4.8, "Actual Contribution Percentage" for a Plan Year means, with respect to the Highly Compensated Participant group and Non- Highly Compensated Participant group, the average of the ratios (calculated separately for each Participant in each group) of: (1) the sum of Employer matching contributions made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to Section 4.12 and Excess Contributions recharacterized as voluntary Employee contributions pursuant to Section 4.6(a) on behalf of each such Participant for such Plan Year; to (2) the Participant's "414(s) Compensation" for such Plan Year. (c) For purposes of determining the "Actual Contribution Percentage" and the amount of Excess Aggregate Contributions pursuant to Section 4.8(d), only Employer matching contributions contributed to the Plan prior to the end of the succeeding Plan Year 29

shall be considered. In addition, the Administrator may elect to take into account, with respect to Employees eligible to have Employer matching contributions pursuant to Section 4.1(b) or voluntary Employee contributions pursuant to Section 4.12 allocated to their accounts, elective deferrals (as defined in Regulation 1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code Section 401 (m)(4)(C)) contributed to any plan maintained by the Employer. Such elective deferrals and qualified non-elective contributions shall be treated as Employer matching contributions subject to Regulation 1.401(m)-1(b)(5) which is incorporated herein by reference. However, the Plan Year must be the same as the plan year of the plan to which the elective deferrals and the qualified non- elective contributions are made. (d) For purposes of this Section and Code Sections 401 (a)(4), 410(b) and 401(m), if two or more plans of the Employer to which matching contributions, Employee contributions, or both, are made are treated as one plan for purposes of Code Sections 401 (a)(4) or 410(b) (other than the average benefits test under Code Section 410 (b)(2)(A)(ii)), such plans shall be treated as one plan. In addition, two or more plans of the Employer to which matching contributions, Employee contributions, or both, are made may be considered as a single plan for purposes of determining whether or not such plans satisfy Code Sections 401 (a)(4), 410(b) and 401(m). In such a case, the aggregated plans must satisfy this Section and Code Sections 401 (a)(4), 410(b) and 401(m) as though such aggregated plans were a single plan. Plans may be aggregated under this paragraph (e) only if they have the same plan year. Notwithstanding the above, an employee stock ownership plan described in Code Section 4975(e)(7) or 409 may not be aggregated with this Plan for purposes of determining whether the employee stock ownership plan or this Plan satisfies this Section and Code Sections 401 (a)(4), 410(b) and 401(m). (e) If a Highly Compensated Participant is a Participant under two or more plans (other than an employee stock ownership plan as defined in Code Section 4975(e)(7) or 409) which are maintained by the Employer or an Affiliated Employer to which matching contributions, Employee contributions, or both, are made, all such contributions on behalf of such Highly Compensated Participant shall be aggregated for purposes of determining such Highly Compensated Participant's actual contribution ratio. However, if the plans have different plan years, this paragraph shall be applied by treating all plans ending with or within the same calendar year as a single plan. (f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated Participant and Non-Highly Compensated Participant shall 30

include any Employee eligible to have Employer matching contributions (whether or not a deferral election was made or suspended) or voluntary employee contributions (whether or not voluntary employee contributions are made) allocated to his account for the Plan Year. 4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS (a) In the event that the "Actual Contribution Percentage" for the Highly Compensated Participant group exceeds the "Actual Contribution Percentage" for the Non-Highly Compensated Participant group pursuant to Section 4.7 (a), the Administrator (on or before the fifteenth day of the third month following the end of the Plan Year, but in no event later than the close of the following Plan Year) shall direct the Trustee to distribute to the Highly Compensated Participant having the highest actual contribution ratio, his Vested portion of Excess Aggregate Contributions (and Income allocable to such contributions) and, if forfeitable, forfeit such non-Vested Excess Aggregate Contributions attributable to Employer matching contributions (and Income allocable to such forfeitures) until either one of the tests set forth in Section 4.7(a) is satisfied, or until his actual contribution ratio equals the actual contribution ratio of the Highly Compensated Participant having the second highest actual contribution ratio. This process shall continue until one of the tests set forth in Section 4.7(a) is satisfied. The distribution and/or forfeiture of Excess Aggregate Contributions shall be made in the following order: (1) Voluntary Employee contributions including Excess Contributions recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)(2); (2) Employer matching contributions. (b) Any distribution and/or forfeiture of less than the entire amount of Excess Aggregate Contributions (and Income) shall be treated as a pro rata distribution and/or forfeiture of Excess Aggregate Contributions and Income. Distribution of Excess Aggregate Contributions shall be designated by the Employer as a distribution of Excess Aggregate Contributions (and Income). Forfeitures of Excess Aggregate Contributions shall be treated in accordance with Section 4.4. (c) Excess Aggregate Contributions attributable to amounts other than voluntary Employee contributions, including forfeited matching contributions, shall be treated as Employer contributions for purposes of Code Sections 404 and 415 even if distributed from the Plan. 31

Forfeited matching contributions that are reallocated to Participants' Accounts for the Plan Year in which the forfeiture occurs shall be treated as an "annual addition" pursuant to Section 4.9(b) for the Participants to whose Accounts they are reallocated and for the Participants from whose Accounts they are forfeited. (d) For each Highly Compensated Participant, the amount of Excess Aggregate Contributions is equal to the Employer matching contributions made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary Employee contributions pursuant to Section 4.6 (a) and any qualified non-elective contributions or elective deferrals taken into account pursuant to Section 4.7(c) on behalf of the Highly Compensated Participant (determined prior to the application of this paragraph) minus the amount determined by multiplying the Highly Compensated Participant's actual contribution ratio (determined after application of this paragraph) by his "414(s) Compensation." The actual contribution ratio must be rounded to the nearest one-hundredth of one percent. In no case shall the amount of Excess Aggregate Contribution with respect to any Highly Compensated Participant exceed the amount of Employer matching contributions made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary Employee contributions pursuant to Section 4.6(a) and any qualified non-elective contributions or elective deferrals taken into account pursuant to Section 4.7(c) on behalf of such Highly Compensated Participant for such Plan Year. (e) The determination of the amount of Excess Aggregate Contributions with respect to any Plan Year shall be made after first determining the Excess Contributions, if any, to be treated as voluntary Employee contributions due to recharacterization for the plan year of any other qualified cash or deferred arrangement (as defined in Code Section 401 (k)) maintained by the Employer that ends with or within the Plan Year or which are treated as voluntary Employee contributions due to recharacterization pursuant to Section 4.6(a). (f) If during a Plan Year the projected aggregate amount of Employer matching contributions, voluntary Employee contributions and Excess Contributions recharacterized as voluntary Employee contributions to be allocated to all Highly Compensated Participants under this Plan would, by virtue of the tests set forth in Section 4.7(a), cause the Plan to fail such tests, then the Administrator may automatically reduce proportionately or in the order provided in Section 4.8(a) each affected Highly Compensated Participant's projected share of such contributions by an amount necessary to satisfy one of the tests set forth in Section 4.7(a). 32

(g) Notwithstanding the above, within twelve (12) months after the end of the Plan Year, the Employer may make a special Qualified Non-Elective Contribution on behalf of Non-Highly Compensated Participants in an amount sufficient to satisfy one of the tests set forth in Section 4.7(a). Such contribution shall be allocated to the Participant's Account of Non-Highly Compensated Participant in the same proportion that each Non-Highly Compensated Participant's Compensation for the Plan Year bears to the total Compensation of all Non-Highly Compensated Participants for the Plan Year. A separate accounting of any special Qualified Non-Elective Contribution shall be maintained in the Participant's Account. 4.9 MAXIMUM ANNUAL ADDITIONS (a) Notwithstanding the foregoing, the maximum "annual additions" credited to a Participant's accounts for any "limitation year" shall equal the lesser of: (1) $30,000 adjusted annually as provided in Code Section 415(d) pursuant to the Regulations, or (2) twenty-five percent (25%) of the Participant's "415 Compensation" for such "limitation year." For any short "limitation year," the dollar limitation in (1) above shall be reduced by a fraction, the numerator of which is the number of full months in the short "limitation year" and the denominator of which is twelve (12). (b) For purposes of applying the limitations of Code Section 415, "annual additions" means the sum credited to a Participant's accounts for any "limitation year" of (1) Employer contributions, (2) Employee contributions, (3) forfeitures, (4) amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code Section 415(l)(2) which is part of a pension or annuity plan maintained by the Employer and (5) amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Section 41 9A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e)) maintained by the Employer. Except, however, the "415 Compensation" percentage limitation referred to in paragraph (a)(2) above shall not apply to: (1) any contribution for medical benefits (within the meaning of Code Section 419A(f)(2)) after separation from service which is otherwise treated as an "annual addition," or (2) any amount otherwise treated as an "annual addition" under Code Section 415(l)(1). (c) For purposes of applying the limitations of Code Section 415, the transfer of funds from one qualified plan to another is not an "annual addition." In addition, the following are not Employee contributions for the purposes of Section 4.9(b)(2): (1) rollover contributions (as defined in Code Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant 33

from the Plan; (3) repayments of distributions received by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of distributions received by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory contributions); and (5) Employee contributions to a simplified employee pension excludable from gross income under Code Section 408(k)(6). (d) For purposes of applying the limitations of Code Section 415, the "limitation year" shall be the Plan Year. (e) For the purpose of this Section, all qualified defined contribution plans (whether terminated or not) ever maintained by the Employer shall be treated as one defined contribution plan. (f) For the purpose of this Section, if the Employer is a member of a controlled group of corporations, trades or businesses under common control (as defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by Code Section 415(h)), is a member of an affiliated service group (as defined by Code Section 414(m)), or is a member of a group of entities required to be aggregated pursuant to Regulations under Code Section 414(o), all Employees of such Employers shall be considered to be employed by a single Employer. (g) For the purpose of this Section, if this Plan is a Code Section 413(c) plan, each Employer who maintains this Plan will be considered to be a separate Employer. (h)(1) If a Participant participates in more than one defined contribution plan maintained by the Employer which have different Anniversary Dates, the maximum "annual additions" under this Plan shall equal the maximum "annual additions" for the "limitation year" minus any "annual additions" previously credited to such Participant's accounts during the "limitation year." (2) If a Participant participates in both a defined contribution plan subject to Code Section 412 and a defined contribution plan not subject to Code Section 412 maintained by the Employer which have the same Anniversary Date, "annual additions" will be credited to the Participant's accounts under the defined contribution plan subject to Code Section 412 prior to crediting "annual additions" to the Participant's accounts under the defined contribution plan not subject to Code Section 412. (3) If a Participant participates in more than one defined contribution plan not subject to Code Section 412 maintained by the Employer which have the same Anniversary Date, the maximum "annual additions" under this Plan shall equal the 34

product of (A) the maximum "annual additions" for the "limitation year" minus any "annual additions" previously credited under subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the numerator of which is the "annual additions" which would be credited to such Participant's accounts under this Plan without regard to the limitations of Code Section 415 and (ii) the denominator of which is such "annual additions" for all plans described in this subparagraph. (i) Notwithstanding anything contained in this Section to the contrary, the limitations, adjustments and other requirements prescribed in this Section shall at all times comply with the provisions of Code Section 415 and the Regulations thereunder, the terms of which are specifically incorporated herein by reference. 4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS (a) If, as a result of a reasonable error in estimating a Participant's Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any Participant under the limits of Section 4.9 or other facts and circumstances to which Regulation 1.4156(b)(6) shall be applicable, the "annual additions" under this Plan would cause the maximum "annual additions" to be exceeded for any Participant, the Administrator shall (1) distribute any elective deferrals (within the meaning of Code Section 402(g)(3)) or return any Employee contributions (whether voluntary or mandatory), and for the distribution of gains attributable to those elective deferrals and Employee contributions, to the extent that the distribution or return would reduce the "excess amount" in the Participant's accounts (2) hold any "excess amount" remaining after the return of any elective deferrals or voluntary Employee contributions in a "Section 415 suspense account" (3) use the "Section 415 suspense account" in the next "limitation year" (and succeeding "limitation years" if necessary) to reduce Employer contributions for that Participant if that Participant is covered by the Plan as of the end of the "limitation year," or if the Participant is not so covered, allocate and reallocate the "Section 415 suspense account" in the next "limitation year" (and succeeding "limitation years" if necessary) to all Participants in the Plan before any Employer or Employee contributions which would constitute "annual additions" are made to the Plan for such "limitation year" (4) reduce Employer contributions to the Plan for such "limitation year" by the amount of the "Section 415 suspense account" allocated and reallocated during such "limitation year." 35

(b) For purposes of this Article, "excess amount" for any Participant for a "limitation year" shall mean the excess, if any, of (1) the "annual additions" which would be credited to his account under the terms of the Plan without regard to the limitations of Code Section 415 over (2) the maximum "annual additions" determined pursuant to Section 4.9. (c) For purposes of this Section, "Section 415 suspense account" shall mean an unallocated account equal to the sum of "excess amounts" for all Participants in the Plan during the "limitation year." The "Section 415 suspense account" shall not share in any earnings or losses of the Trust Fund. 4.11 TRANSFERS FROM QUALIFIED PLANS (a) With the consent of the Administrator, amounts may be transferred from other qualified plans by Eligible Employees, provided that the trust from which such funds are transferred permits the transfer to be made and the transfer will not jeopardize the tax exempt status of the Plan or Trust or create adverse tax consequences for the Employer. The amounts transferred shall be set up in a separate account herein referred to as a "Participant's Rollover Account." Such account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason. (b) Amounts in a Participant's Rollover Account shall be held by the Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as provided in paragraphs (c) and (d) of this Section. (c) Except as permitted by Regulations (including Regulation 1.411 (d)-4), amounts attributable to elective contributions (as defined in Regulation 1.401 (k)-1 (g)(3)), including amounts treated as elective contributions, which are transferred from another qualified plan in a plan-to-plan transfer shall be subject to the distribution limitations provided for in Regulation 1.401(k)- 1(d). (d) The Administrator, at the election of the Participant, shall direct the Trustee to distribute all or a portion of the amount credited to the Participant's Rollover Account. Any distributions of amounts held in a Participant's Rollover Account shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Section 411 (a)(11) and the Regulations thereunder. Furthermore, such amounts shall be considered as part of a Participant's benefit in determining whether an involuntary cash-out of benefits without Participant consent 36

may be made. (e) The Administrator may direct that employee transfers made after a Valuation Date be segregated into a separate account for each Participant in a federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate, or other short term debt security acceptable to the Trustee until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as part of the general Trust Fund, to be determined by the Administrator. (f) For purposes of this Section, the term "qualified plan" shall mean any tax qualified plan under Code Section 401(a). The term "amounts transferred from other qualified plans" shall mean: (i) amounts transferred to this Plan directly from another qualified plan; (ii) distributions from another qualified plan which are eligible rollover distributions and which are either transferred by the Employee to this Plan within sixty (60) days following his receipt thereof or are transferred pursuant to a direct rollover; (iii) amounts transferred to this Plan from a conduit individual retirement account provided that the conduit individual retirement account has no assets other than assets which (A) were previously distributed to the Employee by another qualified plan as a lump-sum distribution (B) were eligible for tax-free rollover to a qualified plan and (C) were deposited in such conduit individual retirement account within sixty (60) days of receipt thereof and other than earnings on said assets; and (iv) amounts distributed to the Employee from a conduit individual retirement account meeting the requirements of clause (iii) above, and transferred by the Employee to this Plan within sixty (60) days of his receipt thereof from such conduit individual retirement account. (g) Prior to accepting any transfers to which this Section applies, the Administrator may require the Employee to establish that the amounts to be transferred to this Plan meet the requirements of this Section and may also require the Employee to provide an opinion of counsel satisfactory to the Employer that the amounts to be transferred meet the requirements of this Section. (h) This Plan shall not accept any direct or indirect transfers (as that term is defined and interpreted under Code Section 401 (a)(11) and the Regulations thereunder) from a defined benefit plan, money purchase plan (including a target benefit plan), stock bonus or profit sharing plan which would otherwise have provided for a life annuity form of payment to the Participant. (i) Notwithstanding anything herein to the contrary, a transfer directly to this Plan from another qualified plan (or a transaction having 37

the effect of such a transfer) shall only be permitted if it will not result in the elimination or reduction of any "Section 411 (d)(6) protected benefit" as described in Section 7.1. 4.12 VOLUNTARY CONTRIBUTIONS (a) In order to allow Participants the opportunity to increase their retirement income, each Participant may, at the discretion of the Administrator, elect to voluntarily contribute a portion of his compensation earned while a Participant under this Plan. Such contributions shall be paid to the Trustee within a reasonable period of time but in no event later than ninety (90) days after the Employer receives the contribution. The balance in each Participant's Voluntary Contribution Account shall be fully Vested at all times and shall not be subject to Forfeiture for any reason. (b) A Participant may elect to withdraw his voluntary contributions from his Voluntary Contribution Account and the actual earnings thereon in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Section 411 (a)(11) and the Regulations thereunder. If the Administrator maintains sub- accounts with respect to voluntary contributions (and earnings thereon) which were made on or before a specified date, a Participant shall be permitted to designate which subaccount shall be the source for his withdrawal. In the event such a withdrawal is made, or in the event a Participant has received a hardship distribution pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the Employer, then such Participant shall be barred from making any voluntary contributions to the Trust Fund for a period of twelve (12) months after receipt of the withdrawal or distribution. (c) At Normal Retirement Date, or such other date when the Participant or his Beneficiary shall be entitled to receive benefits, the fair market value of the Voluntary Contribution Account shall be used to provide additional benefits to the Participant or his Beneficiary. (d) The Administrator may direct that voluntary contributions made after a Valuation Date be segregated into a separate account for each Participant in a federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate, or other short term debt security acceptable to the Trustee until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as part of the general Trust Fund, to be determined by the Administrator. 38

4.13 DIRECTED INVESTMENT ACCOUNT (a) Participants may, subject to a procedure established by the Administrator (the Participant Direction Procedures) and applied in a uniform nondiscriminatory manner, direct the Trustee to invest all of their accounts in specific assets, specific funds or other investments permitted under the Plan and the Participant Direction Procedures. That portion of the interest of any Participant so directing will thereupon be considered a Participant's Directed Account. (b) As of each Valuation Date, all Participant Directed Accounts shall be charged or credited with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in the market value using publicly listed fair market values when available or appropriate. (1) To the extent that the assets in a Participant's Directed Account are accounted for as pooled assets or investments, the allocation of earnings, gains and losses of each Participant's Directed Account shall be based upon the total amount of funds so invested, in a manner proportionate to the Participant's share of such pooled investment. (2) To the extent that the assets in the Participant's Directed Account are accounted for as segregated assets, the allocation of earnings, gains and losses from such assets shall be made on a separate and distinct basis. (c) The Participant Direction Procedures shall provide an explanation of the circumstances under which Participants and their Beneficiaries may give investment instructions, including, but need not be limited to, the following: (1) the conveyance of instructions by the Participants and their Beneficiaries to invest Participant Directed Accounts in Directed Investments; (2) the name, address and phone number of the Fiduciary (and, if applicable, the person or persons designated by the Fiduciary to act on its behalf) responsible for providing information to the Participant or a Beneficiary upon request relating to the investments in Directed Investments; (3) applicable restrictions on transfers to and from any Designated Investment Alternative; 39

(4) any restrictions on the exercise of voting, tender and similar rights related to a Directed Investment by the Participants or their Beneficiaries; (5) a description of any transaction fees and expenses which affect the balances in Participant Directed Accounts in connection with the purchase or sale of Directed Investments; and (6) general procedures for the dissemination of investment and other information relating to the Designated Investment Alternatives as deemed necessary or appropriate, including but not limited to a description of the following: (i) the investment vehicles available under the Plan, including specific information regarding any Designated Investment Alternative; (ii) any designated Investment Managers; and (iii) a description of the additional information which may be obtained upon request from the Fiduciary designated to provide such information. (d) Any information regarding investments available under the Plan, to the extent not required to be described in the Participant Direction Procedures, may be provided to the Participant in one or more written documents which are separate from the Participant Direction Procedures and are not thereby incorporated by reference into this Plan. (e) The Administrator may, at its discretion, include in or exclude by amendment or other action from the Participant Direction Procedures such instructions, guidelines or policies as it deems necessary or appropriate to ensure proper administration of the Plan, and may interpret the same accordingly. ARTICLE V VALUATIONS 5.1 VALUATION OF THE TRUST FUND The Administrator shall direct the Trustee, as of each Valuation Date, to determine the net worth of the assets comprising the Trust Fund as it exists on the Valuation Date. In determining such net worth, the Trustee shall value the assets comprising the Trust Fund at their fair market value as of the Valuation Date and shall 40

deduct all expenses for which the Trustee has not yet obtained reimbursement from the Employer or the Trust Fund. The Trustee may update the value of any shares held in the Participant Directed Account by reference to the number of shares held by that Participant, priced at the market value as of the Valuation Date. 5.2 METHOD OF VALUATION In determining the fair market value of securities held in the Trust Fund which are listed on a registered stock exchange, the Administrator shall direct the Trustee to value the same at the prices they were last traded on such exchange preceding the close of business on the Valuation Date. If such securities were not traded on the Valuation Date, or if the exchange on which they are traded was not open for business on the Valuation Date, then the securities shall be valued at the prices at which they were last traded prior to the Valuation Date. Any unlisted security held in the Trust Fund shall be valued at its bid price next preceding the close of business on the Valuation Date, which bid price shall be obtained from a registered broker or an investment banker. In determining the fair market value of assets other than securities for which trading or bid prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers. ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 DETERMINATION OF BENEFITS UPON RETIREMENT Every Participant may terminate his employment with the Employer and retire for the purposes hereof on his Normal Retirement Date or Early Retirement Date. However, a Participant may postpone the termination of his employment with the Employer to a later date, in which event the participation of such Participant in the Plan, including the right to receive allocations pursuant to Section 4.4, shall continue until his Late Retirement Date. Upon a Participant's termination of employment, or as soon thereafter as is practicable, the Trustee shall distribute, at the election of the Participant, all amounts credited to such Participant's Combined Account in accordance with Section 6.5. 6.2 DETERMINATION OF BENEFITS UPON DEATH (a) Upon the death of a Participant before his Retirement Date or other termination of his employment, all amounts credited to such Participant's Combined Account shall become fully Vested. The Administrator shall direct the Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to distribute the value of the deceased Participant's accounts to the Participant's Beneficiary. 41

(b) Upon the death of a Former Participant, the Administrator shall direct the Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to distribute any remaining Vested amounts credited to the accounts of a deceased Former Participant to such Former Participant's Beneficiary. (c) Any security interest held by the Plan by reason of an outstanding loan to the Participant or Former Participant shall be taken into account in determining the amount of the death benefit. (d) The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a deceased Participant or Former Participant as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive. (e) The Beneficiary of the death benefit payable pursuant to this Section shall be the Participant's spouse. Except, however, the Participant may designate a Beneficiary other than his spouse if: (1) the spouse has waived the right to be the Participant's Beneficiary, or (2) the Participant is legally separated or has been abandoned (within the meaning of local law) and the Participant has a court order to such effect (and there is no "qualified domestic relations order" as defined in Code Section 414(p) which provides otherwise), or (3) the Participant has no spouse, or (4) the spouse cannot be located. In such event, the designation of a Beneficiary shall be made on a form satisfactory to the Administrator. A Participant may at any time revoke his designation of a Beneficiary or change his Beneficiary by filing written notice of such revocation or change with the Administrator. However, the Participant's spouse must again consent in writing to any change in Beneficiary unless the original consent acknowledged that the spouse had the right to limit consent only to a specific Beneficiary and that the spouse voluntarily elected to relinquish such right. In the event no valid designation of Beneficiary exists at the time of the Participant's death, the death benefit shall be payable to his estate. (f) Any consent by the Participant's spouse to waive any 42

rights to the death benefit must be in writing, must acknowledge the effect of such waiver, and be witnessed by a Plan representative or a notary public. Further, the spouse's consent must be irrevocable and must acknowledge the specific nonspouse Beneficiary. 6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY In the event of a Participant's Total and Permanent Disability prior to his Retirement Date or other termination of his employment, all amounts credited to such Participant's Combined Account shall become fully Vested. In the event of a Participant's Total and Permanent Disability, the Trustee, in accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such Participant all amounts credited to such Participant's Combined Account as though he had retired. 6.4 DETERMINATION OF BENEFITS UPON TERMINATION (a) If a Participant's employment with the Employer is terminated for any reason other than death, Total and Permanent Disability or retirement, such Participant shall be entitled to such benefits as are provided hereinafter pursuant to this Section 6.4. Distribution of the funds due to a Terminated Participant shall be made on the occurrence of an event which would result in the distribution had the Terminated Participant remained in the employ of the Employer (upon the Participant's death, Total and Permanent Disability, Early or Normal Retirement). However, at the election of the Participant, the Administrator shall direct the Trustee to cause the entire Vested portion of the Terminated Participant's Combined Account to be payable to such Terminated Participant. Any distribution under this paragraph shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Section 411(a)(11) and the Regulations thereunder. If the value of a Terminated Participant's Vested benefit derived from Employer and Employee contributions does not exceed $5,000 ($3,500 for Plan Years beginning prior to August 6,1997), the Administrator shall direct the Trustee to cause the entire Vested benefit to be paid to such Participant in a single lump sum. (b) A Participant shall become fully Vested in his Participant's Account attributable to Employer matching contributions made pursuant to Section 4.1(b) immediately upon entry into the Plan. (c) Notwithstanding the vesting schedule above, the Vested percentage of a Participant's Account shall not be less than the Vested percentage attained as of the later of the effective date or adoption date 43

of this amendment and restatement. (d) Notwithstanding the vesting schedule above, upon the complete discontinuance of the Employer contributions to the Plan or upon any full or partial termination of the Plan, all amounts credited to the account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture. (e) The computation of a Participant's nonforfeitable percentage of his interest in the Plan shall not be reduced as the result of any direct or indirect amendment to this Plan. In the event that the Plan is amended to change or modify any vesting schedule, a Participant with at least three (3) Years of Service as of the expiration date of the election period may elect to have his nonforfeitable percentage computed under the Plan without regard to such amendment. If a Participant fails to make such election, then such Participant shall be subject to the new vesting schedule. The Participant's election period shall commence on the adoption date of the amendment and shall end 60 days after the latest of: (1) the adoption date of the amendment, (2) the effective date of the amendment, or (3) the date the Participant receives written notice of the amendment from the Employer or Administrator. (f)(1) If any Former Participant shall be reemployed by the Employer before a 1-Year Break in Service occurs, he shall continue to participate in the Plan in the same manner as if such termination had not occurred. (2) If any Former Participant shall be reemployed by the Employer before five (5) consecutive 1-Year Breaks in Service, and such Former Participant had received a distribution of his entire Vested interest prior to his reemployment, his forfeited account shall be reinstated only if he repays the full amount distributed to him before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer or the close of the first period of five (5) consecutive 1-Year Breaks in Service commencing after the distribution. In the event the Former Participant does repay the full amount distributed to him, the undistributed portion of the Participant's Account must be restored in full, unadjusted by any gains or losses occurring subsequent to the Valuation Date coinciding with or preceding his termination. The source for such reinstatement shall first be any Forfeitures occurring during the year. If such source is insufficient, then the Employer shall contribute an amount which is sufficient to restore any such forfeited Accounts provided, however, that if a discretionary contribution is 44

made for such year pursuant to Section 4.1(d), such contribution shall first be applied to restore any such Accounts and the remainder shall be allocated in accordance with Section 4.4. (3) If any Former Participant is reemployed after a 1-Year Break in Service has occurred, of Service shall include of Service prior to his 1-Year Break in Service subject to the following rules: (i) If a Former Participant has a 1-Year Break in Service, his pre- break and post-break service shall be used for computing of Service for eligibility and for vesting purposes only after he has been employed for one (1) of Service following the date of his reemployment with the Employer; (ii) Any Former Participant who under the Plan does not have a nonforfeitable right to any interest in the Plan resulting from Employer contributions shall lose credits otherwise allowable under (i) above if his consecutive 1Year Breaks in Service equal or exceed the greater of (A) five (5) or (B) the aggregate number of his pre-break of Service; (iii) After five (5) consecutive 1-Year Breaks in Service, a Former Participant's Vested Account balance attributable to pre-break service shall not be increased as a result of post-break service; (iv) If a Former Participant is reemployed by the Employer, he shall participate in the Plan immediately on his date of reemployment; (v) If a Former Participant (a 1-Year Break in Service previously occurred, but employment had not terminated) is credited with an Hour of Service after the first eligibility computation period in which he incurs a 1-Year Break in Service, he shall participate in the Plan immediately. (g) In determining of Service for purposes of vesting under the Plan, of Service prior to the Effective Date of the Planshall be excluded. 6.5 DISTRIBUTION OF BENEFITS (a) The Administrator, pursuant to the election of the Participant, shall direct the Trustee to distribute to a Participant or his Beneficiary any amount to which he is entitled under the Plan in one or more of the following methods: (1) One lump-sum payment in cash. (2) Payments over a period certain in monthly, quarterly, semiannual, or annual cash installments. In order to provide such 45

installment payments, the Administrator may (A) segregate the aggregate amount thereof in a separate, federally insured savings account, certificate of deposit in a bank or savings and loan association, money market certificate or other liquid short-term security or (B) purchase a nontransferable annuity contract for a term certain (with no life contingencies) providing for such payment. The period over which such payment is to be made shall not extend beyond the Participant's life expectancy (or the life expectancy of the Participant and his designated Beneficiary). (b) Any distribution to a Participant who has a benefit which exceeds $5,000 ($3,500 for Plan Years beginning prior to August 6, 1997) shall require such Participant's consent if such distribution commences prior to the later of his Normal Retirement Age or age 62. However, if a Participant has begun to receive distributions pursuant to an optional form of benefit under which at least One scheduled periodic distribution has not yet been made, and if the value of the Participant's benefit, determined at the time of the first distribution under that optional form of benefit, exceeded $5,000 ($3,500 for Plan Years beginning prior to August 6,1997), then the value of the Participant's benefit is deemed to continue to exceed such amount. With regard to this required consent: (1) The Participant must be informed of his right to defer receipt of the distribution. If a Participant fails to consent, it shall be deemed an election to defer the commencement of payment of any benefit. However, any election to defer the receipt of benefits shall not apply with respect to distributions which are required under Section 6.5(c). (2) Notice of the rights specified under this paragraph shall be provided no less than 30 days and no more than 90 days before the date the distribution commences. (3) Consent of the Participant to the distribution must not be made before the Participant receives the notice and must not be made more than 90 days before the date the distribution commences. (4) No consent shall be valid if a significant detriment is imposed under the Plan on any Participant who does not consent to the distribution. Any such distribution may commence less than 30 days after the notice required under Regulation 1.411(a)-11(c) is given, provided that: 46

(1) Administrator clearly informs the Participant that the Participant has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option), and (2) the Participant, after receiving the notice, affirmatively elects a distribution. (c) Notwithstanding any provision in the Plan to the contrary, for Plan Years beginning after December 31, 1996, the distribution of a Participant's benefits shall be made in accordance with the following requirements and shall otherwise comply with Code Section 401 (a)(9) and the Regulations thereunder (including Regulation 1.401 (a) (9)-2), the provisions of which are incorporated herein by reference: Alternatively, distributions to a Participant must begin no later than the applicable April 1st as determined under the preceding paragraph and must be made over a period certain measured by the life expectancy of the Participant (or the life expectancies of the Participant and his designated Beneficiary) in accordance with Regulations. (1) Distributions to a Participant and his Beneficiaries shall only be made in accordance with the incidental death benefit requirements of Code Section 401 (a)(9)(G) and the Regulations thereunder. (d) For purposes of this Section, the life expectancy of a Participant and a Participant's spouse shall be redetermined annually in accordance with Regulations. Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation 1.72-9. (e) All annuity Contracts under this Plan shall be non-transferable when distributed. Furthermore, the terms of any annuity Contract purchased and distributed to a Participant or spouse shall comply with all of the requirements of the Plan. 6.6 DISTRIBUTION OF BENEFITS UPON DEATH (a)(1) The death benefit payable pursuant to Section 6.2 shall be paid to the Participant's Beneficiary within a reasonable time after the Participant's death by either of the following methods, as elected by the Participant (or if no election has been made prior to the Participant's death, by his Beneficiary) subject, however, to the rules specified in Section 6.6(b): (i) One lump-sum payment in cash. (ii) Payment in monthly, quarterly, semi-annual, or annual cash installments over a period to be determined by the Participant or his Beneficiary. After periodic installments commence, the Beneficiary shall have the right to direct the 47

Trustee to reduce the period over which such periodic installments shall be made, and the Trustee shall adjust the cash amount of such periodic installments accordingly. (2) In the event the death benefit payable pursuant to Section 6.2 is payable in installments, then, upon the death of the Participant, the Administrator may direct the Trustee to segregate the death benefit into a separate account, and the Trustee shall invest such segregated account separately, and the funds accumulated in such account shall be used for the payment of the installments. (b) Notwithstanding any provision in the Plan to the contrary, distributions upon the death of a Participant shall be made in accordance with the following requirements and shall otherwise comply with Code Section 401 (a)(9) and the Regulations thereunder. If it is determined pursuant to Regulations that the distribution of a Participant's interest has begun and the Participant dies before his entire interest has been distributed to him, the remaining portion of such interest shall be distributed at least as rapidly as under the method of distribution selected pursuant to Section 6.5 as of his date of death. If a Participant dies before he has begun to receive any distributions of his interest under the Plan or before distributions are deemed to have begun pursuant to Regulations, then his death benefit shall be distributed to his Beneficiaries by December 31st of the calendar year in which the fifth anniversary of his date of death occurs. However, the 5-year distribution requirement of the preceding paragraph shall not apply to any portion of the deceased Participant's interest which is payable to or for the benefit of a designated Beneficiary. In such event, such portion shall be distributed over a period not extending beyond the life expectancy of such designated Beneficiary provided such distribution begins not later than December 31st of the calendar year immediately following the calendar year in which the Participant died. However, in the event the Participant's spouse (determined as of the date of the Participant's death) is his Beneficiary, the requirement that distributions commence within one year of a Participant's death shall not apply. In lieu thereof, distributions must commence on or before the later of: (1) December 31st of the calendar year immediately following the calendar year in which the Participant died; or (2) December 31st of the calendar year in which the Participant would have attained age 70 1/2. If the surviving spouse dies before distributions to such spouse begin, then the 5-year distribution requirement of this Section shall apply as if the spouse was the Participant. (c) For purposes of this Section, the life expectancy of a Participant and a Participant's spouse shall be redetermined annually in 48

accordance with Regulations. Life expectancy and joint and last survivor expectancy shall be computed using the return multiples in Tables V and VI of Regulation 1.72-9. 6.7 TIME OF SEGREGATION OR DISTRIBUTION Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to make a distribution or to commence a series of payments the distribution or series of payments may be made or begun as soon as is practicable. However, unless a Former Participant elects in writing to defer the receipt of benefits (such election may not result in a death benefit that is more than incidental), the payment of benefits shall begin not later than the 60th day after the close of the Plan Year in which the latest of the following events occurs: (a) the date on which the Participant attains the earlier of age 65 or the Normal Retirement Age specified herein; (b) the 10th anniversary of the year in which the Participant commenced participation in the Plan; or (c) the date the Participant terminates his service with the Employer. 6.8 DISTRIBUTION FOR MINOR BENEFICIARY In the event a distribution is to be made to a minor, then the Administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains his residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan from further liability on account thereof. 6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN In the event that all, or any portion, of the distribution payable to a Participant or his Beneficiary hereunder shall, at the later of the Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending a registered letter, return receipt requested, to the last known address, and after further diligent effort, to ascertain the whereabouts of such Participant or his Beneficiary, the amount so distributable shall be treated as a Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is located subsequent to his benefit being reallocated, such benefit shall be restored unadjusted for earnings or losses. 6.10 PRE-RETIREMENT DISTRIBUTION At such time as a Participant shall have attained the age of 59 1/2 years, the Administrator, at the election of the Participant, shall direct the Trustee to distribute all or a portion of the Vested amount then credited to the accounts maintained on behalf of the Participant. In the event that the Administrator makes 49

such a distribution, the Participant shall continue to be eligible to participate in the Plan on the same basis as any other Employee. Any distribution made pursuant to this Section shall be made in a manner consistent with Section 6.5, including, but not limited to, all notice and consent requirements of Code Section 411 (a)(11) and the Regulations thereunder. Notwithstanding the above, pre-retirement distributions from a Participant's Elective Account shall not be permitted prior to the Participant attaining age 59 1/2 except as otherwise permitted under the terms of the Plan. 6.11 ADVANCE DISTRIBUTION FOR HARDSHIP (a) The Administrator, at the election of the Participant, shall direct the Trustee to distribute to any Participant in any one Plan Year up to the lesser of 100% of his Participant's Elective Account valued as of the last Valuation Date or the amount necessary to satisfy the immediate and heavy financial need of the Participant. Any distribution made pursuant to this Section shall be deemed to be made as of the first day of the Plan Year or, if later, the Valuation Date immediately preceding the date of distribution, and the Participant's Elective Account shall be reduced accordingly. Withdrawal under this Section is deemed to be on account of an immediate and heavy financial need of the Participant if the withdrawal is for: (1) Expenses for medical care described in Code Section 213(d) previously incurred by the Participant, his spouse, or any of his dependents (as defined in Code Section 152) or necessary for these persons to obtain medical care; (2) The costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments); (3) Funeral expenses for a member of the Participant's family; (4) Payment of tuition, related educational fees, and room and board expenses for the next twelve (12) months of post- secondary education for the Participant, his spouse, children, or dependents; or (5) Payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant's principal residence. (b) No distribution shall be made pursuant to this Section unless the Administrator determines, based upon all relevant facts and circumstances that the amount to be distributed is not in excess of the 50

amount required to relieve the financial need and that such need cannot be satisfied from other resources reasonably available to the Participant. For this purpose, the Participant's resources shall be deemed to include those assets of his spouse and minor children that are reasonably available to the Participant. The amount of the immediate and heavy financial need may include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the distribution. A distribution may be treated as necessary to satisfy a financial need if the Administrator relies upon the Participant's representation that the need cannot be relieved: (1) Through reimbursement or compensation by insurance or otherwise; (2) By reasonable liquidation of the Participant's assets, to the extent such liquidation would not itself increase the amount of the need; (3) By cessation of elective deferrals and voluntary Employee contributions under the Plan; or (4) By other distributions or loans from the Plan or any other qualified retirement plan, or by borrowing from commercial sources on reasonable commercial terms, to the extent such amounts would not themselves increase the amount of the need. (c) Notwithstanding the above, distributions from the Participant's Elective Account pursuant to this Section shall be limited, as of the date of distribution, to the Participant's Elective Account as of the end of the last Plan Year ending before July 1, 1989, plus the total Participant's Deferred Compensation after such date, reduced by the amount of any previous distributions pursuant to this Section and Section 6.10. (d) Any distribution made pursuant to this Section shall be made in a manner which is consistent with and satisfies the provisions of Section 6.5, including, but not limited to, all notice and consent requirements of Code Section 411 (a)(11) and the Regulations thereunder. 6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION All rights and benefits, including elections, provided to a

Participant in this Plan shall be subject to the rights afforded to any "alternate payee" under a "qualified domestic relations order." Furthermore, a distribution to an "alternate payee" shall be permitted if such distribution is authorized by a "qualified domestic 51

relations order," even if the affected Participant has not separated from service and has not reached the "earliest retirement age" under the Plan. For the purposes of this Section, "alternate payee," "qualified domestic relations order" and "earliest retirement age" shall have the meaning set forth under Code Section 414(p). 6.13 DIRECT ROLLOVER (a) Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an eligible rollover distribution that is equal to at least $500 paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (b) For purposes of this Section the following definitions shall apply: (1) An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401 (a)(9); the portion of any other distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); any hardship distribution described in Code Section 401 (k)(2)(B)(i)(IV); and any other distribution that is reasonably expected to total less than $200 during a year. (2) An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity. (3) A distributee includes an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic 52

relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse. (4) A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee. 6.14 ELIMINATION OF LOOKBACK RULE Notwithstanding anything in this Article to the contrary, the

"lookback rule" (the "lookback rule" provides that for purposes of determining whether a distribution may be made without consent, if the value at the time of a prior distribution exceeded the applicable dollar threshold (e.g., $5,000) then the value at any subsequent time is deemed to exceed the threshold) will not apply to any distributions made on or after October 17, 2000. ARTICLE VII AMENDMENT, TERMINATION, MERGERS AND LOANS 7.1 AMENDMENT (a) The Employer shall have the right at any time to amend the Plan, subject to the limitations of this Section. However, any amendment which affects the rights, duties or responsibilities of the Trustee and Administrator, other than an amendment to remove the Trustee or Administrator, may only be made with the Trustee's and Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee shall not be required to execute any such amendment unless the Trust provisions contained herein are a part of the Plan and the amendment affects the duties of the Trustee hereunder. (b) No amendment to the Plan shall be effective if it authorizes or permits any part of the Trust Fund (other than such part as is required to pay taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries or estates; or causes any reduction in the amount credited to the account of any Participant; or causes or permits any portion of the Trust Fund to revert to or become property of the Employer. (c) Except as permitted by Regulations, no Plan amendment or transaction having the effect of a Plan amendment (such as a merger, plan transfer or similar transaction) shall be effective to the 53

extent it eliminates or reduces any "Section 411 (d)(6) protected benefit" or adds or modifies conditions relating to "Section 411 (d)(6) protected benefits" the result of which is a further restriction on such benefit unless such protected benefits are preserved with respect to benefits accrued as of the later of the adoption date or effective date of the amendment. "Section 411 (d)(6) protected benefits" are benefits described in Code Section 411 (d) (6)(A), early retirement benefits and retirement-type subsidies, and optional forms of benefit. 7.2 TERMINATION (a) The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee and Administrator written notice of such termination. Upon any full or partial termination, all amounts credited to the affected Participants' Combined Accounts shall become 100% Vested as provided in Section 6.4 and shall not thereafter be subject to forfeiture, and all unallocated amounts shall be allocated to the accounts of all Participants in accordance with the provisions hereof. (b) Upon the full termination of the Plan, the Employer shall direct the distribution of the assets of the Trust Fund to Participants in a manner which is consistent with and satisfies the provisions of Section 6.5. Distributions to a Participant shall be made in cash or through the purchase of irrevocable nontransferable deferred commitments from an insurer. Except as permitted by Regulations, the termination of the Plan shall not result in the reduction of "Section 411 (d)(6) protected benefits" in accordance with Section 7.1(c). 7.3 MERGER OR CONSOLIDATION This Plan may be merged or consolidated with, or its assets and/or liabilities may be transferred to any other plan and trust only if the benefits which would be received by a Participant of this Plan, in the event of a termination of the plan immediately after such transfer, merger or consolidation, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the transfer, merger or consolidation, and such transfer, merger or consolidation does not otherwise result in the elimination or reduction of any "Section 411 (d) (6) protected benefits" in accordance with Section 7.1(c). 7.4 LOANS TO PARTICIPANTS (a) The Trustee may, in the Trustee's discretion, make loans to Participants and Beneficiaries under the following circumstances: (1) loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in an amount greater than the amount 54

made available to other Participants and Beneficiaries; (3) loans shall bear a reasonable rate of interest; (4) loans shall be adequately secured; and (5) shall provide for repayment over a reasonable period of time. (b) Loans made pursuant to this Section (when added to the outstanding balance of all other loans made by the Plan to the Participant) shall be limited to the lesser of: (1) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from the Plan to the Participant during the one year period ending on the day before the date on which such loan is made, over the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made, or (2) one-half (1/2) of the present value of the non-forfeitable accrued benefit of the Participant under the Plan. For purposes of this limit, all plans of the Employer shall be considered one plan. Additionally, with respect to any loan made prior to January 1, 1987, the $50,000 limit specified in (1) above shall be unreduced. (c) Loans shall provide for level amortization with payments to be made not less frequently than quarterly over a period not to exceed five (5) years. However, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at the time the loan is made) as a principal residence of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. For this purpose, a principal residence has the same meaning as a principal residence under Code Section 1034. Notwithstanding the foregoing, loans made prior to January 1, 1987 which are used to acquire, construct, reconstruct or substantially rehabilitate any dwelling unit which, within a reasonable period of time is to be used (determined at the time the loan is made) as a principal residence of the Participant or a member of his family (within the meaning of Code Section 267(c)(4)) may provide for periodic repayment over a reasonable period of time that may exceed five (5) years. Additionally, loans made prior to January 1,1987, may provide for periodic payments which are made less frequently than quarterly and which do not necessarily result in level amortization. Loan repayments will be suspended under this Plan as permitted under Code Section 414(u)(4). 55

(d) Any loans granted or renewed on or after the last day of the first Plan Year beginning after December 31, 1988 shall be made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not be limited to, the following: (1) the identity of the person or positions authorized to administer the Participant loan program; (2) a procedure for applying for loans; (3) the basis on which loans will be approved or denied; (4) limitations, if any, on the types and amounts of loans offered; (5) the procedure under the program for determining a reasonable rate of interest; (6) the types of collateral which may secure a Participant loan; and (7) the events constituting default and the steps that will be taken to preserve Plan assets. Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan. Furthermore, such Participant loan program may be modified or amended in writing from time to time without the necessity of amending this Section. ARTICLE VIII MISCELLANEOUS 8.1 PARTICIPANT'S RIGHTS This Plan shall not be deemed to constitute a contract between the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan. 56

8.2 ALIENATION (a) Subject to the exceptions provided below, no benefit which shall be payable out of the Trust Fund to any person (including a Participant or his Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; and no such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized by the Trustee, except to such extent as may be required by law. (b) This provision shall not apply to the extent a Participant or Beneficiary is indebted to the Plan, as a result of a loan from the Plan. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such proportion of the amount distributed as shall equal such loan indebtedness shall be paid by the Trustee to the Trustee or the Administrator, at the direction of the Administrator, to apply against or discharge such loan indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given written notice by the Administrator that such loan indebtedness is to be so paid in whole or part from his Participant's Combined Account. If the Participant or Beneficiary does not agree that the loan indebtedness is a valid claim against his Vested Participant's Combined Account, he shall be entitled to a review of the validity of the claim in accordance with procedures provided in Sections 2.7 and 2.8. (c) This provision shall not apply to a "qualified domestic relations order" defined in Code Section 414(p), and those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan. 8.3 CONSTRUCTION OF PLAN This Plan shall be construed and enforced according to the Act and the laws of the State of New York, other than its laws respecting choice of law, to the extent not preempted by the Act. 57

8.4 GENDER AND NUMBER Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply. 8.5 LEGAL ACTION In the event any claim, suit, or proceeding is brought regarding the Trust and/or Plan established hereunder to which the Trustee, the Employer or the Administrator may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee, the Employer or the Administrator, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable. 8.6 PROHIBITION AGAINST DIVERSION OF FUNDS (a) Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan or of the Trust, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any trust fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants, Retired Participants, or their Beneficiaries. (b) In the event the Employer shall make an excessive contribution under a mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may demand repayment of such excessive contribution at any time within one (1) year following the time of payment and the Trustees shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the excess contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned. 8.7 BONDING Every Fiduciary, except a bank or an insurance company, unless exempted by the Act and regulations thereunder, shall be bonded in an amount not less than 10% of the amount of the funds such Fiduciary handles; provided, however, that the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of funds handled shall be determined at the beginning of each Plan Year by the amount of funds handled by such person, group, or class to be covered and their 58

predecessors, if any, during the preceding Plan Year, or if there is no preceding Plan Year, then by the amount of the funds to be handled during the then current year. The bond shall provide protection to the Plan against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in connivance with others. The surety shall be a corporate surety company (as such term is used in Act Section 412(a)(2)), and the bond shall be in a form approved by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary, the cost of such bonds shall be an expense of and may, at the election of the Administrator, be paid from the Trust Fund or by the Employer. 8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE Neither the Employer, the Administrator, nor the Trustee, nor their successors shall be responsible for the validity of any Contract issued hereunder or for the failure on the part of the insurer to make payments provided by any such Contract, or for the action of any person which may delay payment or render a Contract null and void or unenforceable in whole or in part. 8.9 INSURER'S PROTECTIVE CLAUSE Any insurer who shall issue Contracts hereunder shall not have any responsibility for the validity of this Plan or for the tax or legal aspects of this Plan. The insurer shall be protected and held harmless in acting in accordance with any written direction of the Trustee, and shall have no duty to see to the application of any funds paid to the Trustee, nor be required to question any actions directed by the Trustee. Regardless of any provision of this Plan, the insurer shall not be required to take or permit any action or allow any benefit or privilege contrary to the terms of any Contract which it issues hereunder, or the rules of the insurer. 8.10 RECEIPT AND RELEASE FOR PAYMENTS Any payment to any Participant, his legal representative, Beneficiary, or to any guardian or committee appointed for such Participant or Beneficiary in accordance with the provisions of the Plan, shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee and the Employer, either of whom may require such Participant, legal representative, Beneficiary, guardian or committee, as a condition precedent to such payment, to execute a receipt and release thereof in such form as shall be determined by the Trustee or Employer. 8.11 ACTION BY THE EMPLOYER Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority. 8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 59

The "named Fiduciaries" of this Plan are (1) the Employer, (2) the Administrator and (3) the Trustee. The named Fiduciaries shall have only those specific powers, duties, responsibilities, and obligations as are specifically given them under the Plan or as accepted by or assigned to them pursuant to any procedure provided under the Plan, including but not limited to any agreement allocating or delegating their responsibilities, the terms of which are incorporated herein by reference. In general, unless otherwise indicated herein or pursuant to such agreements, the Employer shall have the duties specified in Article II hereof, as the same may be allocated or delegated thereunder, including but not limited to the responsibility for making the contributions provided for under Section 4.1; and shall have the authority to appoint and remove the Trustee and the Administrator; to formulate the Plan's "funding policy and method"; and to amend or terminate, in whole or in part, the Plan. The Administrator shall have the responsibility for the administration of the Plan, including but not limited to the items specified in Article II of the Plan, as the same may be allocated or delegated thereunder. The Administrator shall act as the named Fiduciary responsible for communicating with the Participant according to the Participant Direction Procedures. The Trustee shall have the responsibility of management and control of the assets held under the Trust, except to the extent directed pursuant to Article II or with respect to those assets, the management of which has been assigned to an Investment Manager, who shall be solely responsible for the management of the assets assigned to it, all as specifically provided in the Plan and any agreement with the Trustee. Each named Fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan, authorizing or providing for such direction, information or action. Furthermore, each named Fiduciary may rely upon any such direction, information or action of another named Fiduciary as being proper under the Plan, and is not required under the Plan to inquire into the propriety of any such direction, information or action. It is intended under the Plan that each named Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan as specified or allocated herein. No named Fiduciary shall guarantee the Trust Fund in any manner against investment loss or depreciation in asset value. Any person or group may serve in more than one Fiduciary capacity. In the furtherance of their responsibilities hereunder, the "named Fiduciaries" shall be empowered to interpret the Plan and Trust and to resolve ambiguities, inconsistencies and omissions, which findings shall be binding, final and conclusive. 8.13 HEADINGS The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. 8.14 APPROVAL BY INTERNAL REVENUE SERVICE (a) Notwithstanding anything herein to the contrary, 60

contributions to this Plan are conditioned upon the initial qualification of the Plan under Code Section 401. If the Plan receives an adverse determination with respect to its initial qualification, then the Plan may return such contributions to the Employer within one year after such determination, provided the application for the determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan was adopted, or such later date as the Secretary of the Treasury may prescribe. (b) Notwithstanding any provisions to the contrary, except Sections 3.5 and 3.6, any contribution by the Employer to the Trust Fund is conditioned upon the deductibility of the contribution by the Employer under the Code and, to the extent any such deduction is disallowed, the Employer may, within one (1) year following the disallowance of the deduction, demand repayment of such disallowed contribution and the Trustee shall return such contribution within one (1) year following the disallowance. Earnings of the Plan attributable to the excess contribution may not be returned to the Employer, but any losses attributable thereto must reduce the amount so returned. 8.15 UNIFORMITY All provisions of this Plan shall be interpreted and applied

in a uniform, nondiscriminatory manner. In the event of any conflict between the terms of this Plan and any Contract purchased hereunder, the Plan provisions shall control. ARTICLE IX PARTICIPATING EMPLOYERS 9.1 ADOPTION BY OTHER EMPLOYERS Notwithstanding anything herein to the contrary, with the consent of the Employer and Trustee, any other corporation or entity, whether an affiliate or subsidiary or not, may adopt this Plan and all of the provisions hereof, and participate herein and be known as a Participating Employer, by a properly executed document evidencing said intent and will of such Participating Employer. 9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS (a) Each such Participating Employer shall be required to use the same Trustee as provided in this Plan. (b) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. However, the assets of the Plan shall, on an ongoing basis, be available to pay 61

benefits to all Participants and Beneficiaries under the Plan without regard to the Employer or Participating Employer who contributed such assets. (c) The transfer of any Participant from or to an Employer participating in this Plan, whether he be an Employee of the Employer or a Participating Employer, shall not affect such Participant's rights under the Plan, and all amounts credited to such Participant's Combined Account as well as his accumulated service time with the transfer or predecessor, and his length of participation in the Plan, shall continue to his credit. (d) All rights and values forfeited by termination of employment shall inure only to the benefit of the Participants of the Employer or Participating Employer by which the forfeiting Participant was employed, except if the Forfeiture is for an Employee whose Employer is an Affiliated Employer, then said Forfeiture shall inure to the benefit of the Participants of those Employers who are Affiliated Employers. Should an Employee of one ("First") Employer be transferred to an associated ("Second") Employer which is an Affiliated Employer, such transfer shall not cause his account balance (generated while an Employee of "First" Employer) in any manner, or by any amount to be forfeited. Such Employee's Participant Combined Account balance for all purposes of the Plan, including length of service, shall be considered as though he had always been employed by the "Second" Employer and as such had received contributions, forfeitures, earnings or losses, and appreciation or depreciation in value of assets totaling the amount so transferred. (e) Any expenses of the Trust which are to be paid by the Employer or borne by the Trust Fund shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants. 9.3 DESIGNATION OF AGENT Each Participating Employer shall be deemed to be a party to this Plan; provided, however, that with respect to all of its relations with the Trustee and Administrator for the purpose of this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates the contrary, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan. 9.4 EMPLOYEE TRANSFERS It is anticipated that an Employee may be transferred between 62

Participating Employers, and in the event of any such transfer, the Employee involved shall carry with him his accumulated service and eligibility. No such transfer shall effect a termination of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner as was the Participating Employer from whom the Employee was transferred. 9.5 PARTICIPATING EMPLOYER CONTRIBUTION Any contribution subject to allocation during each Plan Year shall be allocated only among those Participants of the Employer or Participating Employer making the contribution, except if the contribution is made by an Affiliated Employer, in which event such contribution shall be allocated among all Participants of all Participating Employers who are Affiliated Employers in accordance with the provisions of this Plan. On the basis of the information furnished by the Administrator, the Trustee shall keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the accounts and credits of the Employees of each Participating Employer. The Trustee may, but need not, register Contracts so as to evidence that a particular Participating Employer is the interested Employer hereunder, but in the event of an Employee transfer from one Participating Employer to another, the employing Employer shall immediately notify the Trustee thereof. 9.6 AMENDMENT Amendment of this Plan by the Employer at any time when there shall be a Participating Employer hereunder shall only be by the written action of each and every Participating Employer and with the consent of the Trustee where such consent is necessary in accordance with the terms of this Plan. 9.7 DISCONTINUANCE OF PARTICIPATION Any Participating Employer shall be permitted to discontinue or revoke its participation in the Plan. At the time of any such discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. The Trustee shall thereafter transfer, deliver and assign Contracts and other Trust Fund assets allocable to the Participants of such Participating Employer to such new Trustee as shall have been designated by such Participating Employer, in the event that it has established a separate pension plan for its Employees, provided however, that no such transfer shall be made if the result is the elimination or reduction of any "Section 411 (d)(6) protected benefits" in accordance with Section 7.1(c). If no successor is designated, the Trustee shall retain such assets for the Employees of said Participating Employer pursuant to the provisions of the Trust. In no such event shall any part of the corpus or income of the Trust as it relates to such Participating Employer be used for or diverted to purposes other than for the exclusive benefit of the Employees of such Participating Employer. 63

9.8 ADMINISTRATOR'S AUTHORITY The Administrator shall have authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of this Article. 9.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE If any Participating Employer is prevented in whole or in part from making a contribution to the Trust Fund which it would otherwise have made under the Plan by reason of having no current or accumulated earnings or profits, or because such earnings or profits are less than the contribution which it would otherwise have made, then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which such Participating Employer was so prevented from making may be made, for the benefit of the participating employees of such Participating Employer, by the other Participating Employers who are members of the same affiliated group within the meaning of Code Section 1504 to the extent of their current or accumulated earnings or profits, except that such contribution by each such other Participating Employer shall be limited to the proportion of its total current and accumulated earnings or profits remaining after adjustment for its contribution to the Plan made without regard to this paragraph which the total prevented contribution bears to the total current and accumulated earnings or profits of all the Participating Employers remaining after adjustment for all contributions made to the Plan without regard to this paragraph. A Participating Employer on behalf of whose employees a contribution is made under this paragraph shall not reimburse the contributing Participating Employers. 64

IN WITNESS WHEREOF, this Plan has been executed the day and year first above written. Signed, sealed, and delivered in the presence of: Central Hudson Gas & Electric Corporation
By /s/ STEVEN V. LANT -------------------------EMPLOYER

/s/ THOMAS C. BROCKS ------------------------------WITNESS AS TO EMPLOYER ATTEST /s/ GLADYS L.COOPER ---------------------Secretary

67

EXHIBIT (10)(iii)19 TRUST AGREEMENT by and between Central Gas & Electric Corporation and ING National Trust

Central Gas & Electric Corporation Savings Incentive Plan TRUST AGREEMENT THIS TRUST AGREEMENT, effective as of the 1st day of October, 2001 between Central Gas & Electric Corporation (the "Company") in its corporate capacity and as the Plan Sponsor of the Central Gas & Electric Corporation Savings Incentive Plan (the "Plan"), SIP Committee, as the named fiduciary of the Plan (the "Named Fiduciary") and ING National Trust (the "Trustee"). WITNESSETH: WHEREAS, the Company has adopted the Plan which is intended to meet the requirements of the Employee Retirement Income Security Act, as amended ("ERISA"), and Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code"), for the benefit of the employees therein described; and WHEREAS, the Company has established or desires to establish a trust constituting a part of the Plan, pursuant to which assets are held to provide for the funding of and payment of benefits under the Plan; and WHEREAS, the Named Fiduciary is the `Administrator" of the Plan, which has been allocated to power to administer the Plan ("Named Fiduciary") WHEREAS, the Named Fiduciary has determined that all Plan Participants be permitted to direct the investment of their individual account balances by means of an investment program offered by Aetna Life Insurance and Annuity Company ("ALIAC"), and in connection therewith, has appointed Trustee as a recordkeeper to the Plan under a separate plan services agreement and Aetna Investment Services, Inc. (the "Broker") to provide brokerage services to the Plan; and WHEREAS, the Named Fiduciary wishes to appoint the Trustee as a trustee to the Plan in accordance with the terms and conditions of this Agreement; WHEREAS, the Plan and the Trust Agreement for the Plan are set forth in an Agreement ("Agreement") entered into on September 20, 1995, between the Company and Mellon Bank, N.A., as Trustee ("Mellon") which was thereafter amended by instrument effective January 1, 2001 (as amended the "Plan"), pursuant to which Plan a Trust Fund was established for the benefit of the Plan; and WHEREAS, the Company has appointed ING National Trust, as successor trustee to Mellon; and WHEREAS, the Trustee and the Company proposed to enter into a separate Trust Agreement for the Trust Fund; WHEREAS, the Plan is being contemporaneously amended by the Company to reflect said separate Trust Agreement; NOW, THEREFORE, the Company, the Named Fiduciary, and the Trustee, each intending to be legally bound, agree as follows: SECTION 1 - ESTABLISHMENT AND OPERATION OF TRUST 1.1 APPOINTMENT AND ACCEPTANCE OF TRUSTEE. The Company has appointed the Trustee as successor Trustee of the Trust fund heretofore established for the Plan, as such fund now exists and shall exist from time to time (`Fund"). The Fund shall be held by the Trustee in trust and dealt with in accordance with the provisions of this Agreement. The Fund shall not 2

include any interest in any direct or indirect investments in real property, leaseholds, mineral interests or participations in a real estate investment trust or corporation organized under Section 501(c) or 501(c)(25) of the Code. The Trustee shall have no responsibility for any property until it is received and accepted by the Trustee, or for any property of the Plan not delivered to the Trustee and accepted by the Trustee to be a part of the Fund. The Trustee hereby accepts its appointment, acknowledges that it assumes the duties established by this Agreement, and agrees to be bound by the terms contained herein. 1.2 TRUSTEE RESPONSIBILITIES. The Trustee shall receive and hold the assets of the Fund on behalf of Plan participants and beneficiaries in accordance with the terms of this Agreement. The duties of the Trustee hereunder are as a directed trustee and the Trustee shall act solely in accordance with the instructions of the Named Fiduciary or Authorized Parties in accordance with Sections 2.2 and 2.3 of this Agreement ("Authorized Instructions"). Nothing in this Agreement is intended to give the Trustee any discretionary responsibility, authority or control with respect to the management or administration of the Plan or the management of the assets of the Plan. Further, the Trustee is not a party to the Plan and has no duties or responsibilities other than those that may be expressly contained in this Agreement and ERISA. In any case in which a provision of this Agreement conflicts with any provision in the Plan, this Agreement shall control. 1.3 EXCLUSIVE BENEFIT. Except as may be permitted by law, by the terms of the Plan, or by this Agreement, at no time prior to the satisfaction of all liabilities with respect to participants and their beneficiaries under the Plan shall any part of the Fund be used for or diverted to any purpose other than for the exclusive benefit of the participants and their beneficiaries. The assets of the Fund shall be held for the exclusive purposes of providing benefits to participants of the Plan and their beneficiaries and defraying the reasonable expenses of administering the Plan and the Trust. 1.4 STANDARD OF CARE. The Trustee shall discharge its duties under this Agreement with the care and skill required under ERISA. The Trustee shall not be liable for any acts or omissions of another person other than the negligent acts or omissions of its own employees and agents. The Trustee shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting upon any notice, request, direction, instruction, consent, certification or other instrument believed by it to be genuine and delivered by the proper party or parties. 1.5 CONTRIBUTIONS. The Trustee shall receive contributions or other amounts for deposit to the Plan that are delivered to the Trustee or its designated agent for deposit to or for the benefit of the Plan. In accordance with Authorized Instructions, the Trustee shall transmit contributions received to the Broker for the purpose of settling the Plan's investment transactions. The Company shall have sole duty and responsibility for the determination of the accuracy or sufficiency of the contributions to be made under the Plan and for the transmittal of contributions or other amounts to the Plan. The Trustee shall have no duty or responsibility (a) to determine the amounts to be contributed to or transferred to the Plan or on behalf of the participants of the Plan, (b) to collect any contributions or transfers to the Plan or to enforce the 3

collection of any such contributions or transfers, or (c) for the adequacy of amounts deposited to the Fund to meet and discharge any of the Plan's liabilities. 1.6 RETURN OF CONTRIBUTIONS. Notwithstanding any other provision of this Agreement (a) contributions made by the Company based upon mistake of fact may be returned to the Company within one year of such contribution, and (b) as all contributions to the Plan are conditioned upon their deductibility under the Code, if a deduction for such a contribution is disallowed, such contribution may be returned to the Company within one year of the disallowance of such deduction; provided that the return of contributions under this Section 1.6 may not violate any provision of the Plan. The Trustee shall return contributions under this Section 1.6 only in accordance with Authorized Instructions and the Trustee shall have no duty to determine whether the return of such contributions is permitted under this Section 1.6 and the Plan. 1.7 DISTRIBUTIONS. The Trustee shall make distributions and disbursements from the Fund solely in accordance with Authorized Instructions. The Company agrees that the Trustee shall not have any responsibility or duty under this Agreement to see to the proper application of any payment, to determine the tax effect of any payment, or to determine whether a distribution or disbursement to any person paid in accordance with Authorized Instructions is appropriate under the terms of the Plan and applicable law. 1.8 COMPLIANCE WITH LAW. The Trust is intended to comply with ERISA and to be tax-exempt under Section 501(a) of the Code. The Company represents that it has received a determination letter from the Internal Revenue Service indicating that the Plan meets the requirements of Section 401(a) of the Code. The Company and Named Fiduciary each agree to immediately notify the Trustee if the Plan ceases to be so qualified. SECTION 2 - AUTHORITIES 2.1 AUTHORITY TO EXECUTE AGREEMENT. The Company shall certify that they have the power and authority to enter into this Agreement on behalf of the Plan. The person(s) signing below as representatives of the Company warrant, as individuals, that he/she is an authorized representative of the Company, all signatures are genuine and the persons indicated are authorized to sign. 2.2 AUTHORIZED PARTIES. The Company shall concurrently with the execution of this Agreement, furnish the Trustee with a written list of the names, signatures, and extent of authority of all persons authorized to direct the Trustee and otherwise act on behalf of the Company under the terms of this Agreement. Such persons designated by the Company to act on its behalf hereunder are "Authorized Parties". The Trustee shall be entitled to rely on and shall be fully protected in acting upon directions, instructions, and any information provided by an Authorized Party until notified in writing by the Company of a change of the identity or extent of authority of an Authorized Party. 2.3 AUTHORIZED INSTRUCTIONS. All directions and instructions to the Trustee from an Authorized Party ("Authorized Instructions") shall be in writing, transmitted by mail (including 4

electronic mail) or by facsimile The Trustee shall be entitled to rely on and shall be fully protected in acting in accordance with all such directions and instructions which it reasonably believes to have been given by an Authorized Party and in failing to act in the absence thereof. SECTION 3 - POWERS AND DUTIES 3.1 GENERAL POWERS AND DUTIES OF TRUSTEE. In administering the Trust, the Trustee shall be specifically authorized to: (a) In accordance with Authorized Instructions, receive, hold and maintain custody of, and disburse Plan assets; (b) Hold securities or other Plan property in book entry form or through another agent or nominee, including without limitation in an omnibus account arrangement, provided that the Trustee's records clearly indicate that such securities or other property are held for the exclusive benefit of the Plan and its participants and beneficiaries; (c) Appoint domestic agents, sub-trustees, sub-custodians or depositories (including affiliates of the Trustee) as to part or all of the Fund, except that the indicia of ownership of any asset of the Fund shall not be held outside the jurisdiction of the District Courts of the United States unless in compliance with Section 404(b) of ERISA and regulations thereunder; (d) Collect income payable to and dividends or other distributions due to the Fund and sign on behalf of the Plan any declarations, affidavits, and certificates of ownership required to collect income and principal payments; (e) Collect proceeds from assets of the Fund that may mature or be called; (f) Until Authorized Instructions are received, hold the assets of the Fund uninvested, or invest the assets of the Fund in bank accounts of any bank, and the Trustee may retain any earnings on such deposits as part of its compensation for services hereunder; (g) Submit or cause to be submitted to the Named Fiduciary all information received by the Trustee regarding ownership rights pertaining to property held in the Fund; (h) Exercise all voting rights relating to employer stock or other securities held in the Fund as directed by the Named Fiduciary; provided that, with respect to shares of employer stock or other securities allocated to the accounts of Plan participants, unless otherwise directed by the Named Fiduciary in writing, the Trustee shall mail to each Plan participant who has shares of such employer stock or other security credited to his or her account a copy of the notice and all proxy solicitation materials together with a voting instruction form for return to the Trustee or its designee, and the Trustee shall vote the shares as directed by each participant and shall not vote 5

shares for which it has not received instructions from a participant Unless the Named Fiduciary instructs the Trustee to vote shares not voted by participants, the Trustee shall not be liable and shall be held harmless for not voting such shares. (i) Commence or defend suits or legal proceedings and represent the Fund in all suits or legal proceedings in any court or before any other body or tribunal as the Trustee shall deem necessary to protect the Fund provided, however, that the Trustee shall not be obligated to do so unless it has been indemnified by the Company and the Plan against all expenses and liabilities sustained in connection with such action; (j) Employ suitable agents and legal counsel, who may be counsel for the Company, and, as part of its reimbursable expenses under this Agreement, pay their reasonable compensation and expenses. The Trustee shall be entitled to rely on and may act upon advice of counsel on all matters, and, if the use of such counsel is authorized by the Named Fiduciary, the Trustee shall be without liability for any action reasonably taken or omitted pursuant to such advice; (k) Make, execute and deliver any and all documents, agreements or other instruments in writing as is necessary or desirable for the accomplishment of any of the powers and duties in this Agreement; and (l) Generally take any action, whether or not expressly authorized, which the Trustee may deem necessary or desirable for the fulfillment of its duties hereunder. SECTION 4 - INVESTMENT OF THE FUND 4.1 INVESTMENT OF THE FUND. The assets of the Fund shall be invested and reinvested among the investments selected by the Named Fiduciary. The Named Fiduciary shall have sole responsibility for the investment and reinvestment of the assets of the Fund, except to the extent that the Plan permits participants to instruct the Named Fiduciary with respect to the investment of their individual accounts among investment options selected by the Named Fiduciary for the Plan. The Trustee shall have no duty or responsibility for (a) selecting or providing advice with respect to the selection of any investment options offered under the Plan, (b) determining or reviewing any securities or other property purchased for or held by the Plan, or (c) providing advice with respect to the purchase, retention, redemption, or sale of any securities or other property for the Plan. In the event the Named Fiduciary has selected particular investment options offered by ALIAC into which Plan assets previously invested with another investment provider are to be placed (a procedure known as "mapping"), the Trustee shall bear no duty or responsibility for determining the suitability of the ALIAC investment offerings selected for this purpose. 4.2 INVESTMENT TRANSACTIONS. Under the plan services agreement, the Trustee receives instructions from the Named Fiduciary or, if the Plan so provides, from the Plan participants, and sends plan-level trade instructions to the Broker. All investment transactions for the Fund shall be effected by the Broker and the Trustee's sole responsibility therefore shall be to, solely in accordance with Authorized Instructions, (a) timely transmit trade instructions and funds to the Broker for purposes of settling the Plan's investment transactions, (b) receive and hold title to 6

securities purchased on the Plan's behalf, (c) cooperate with the Broker in the transfer of securities or other property of the Plan in connection with the redemption or sale of securities or other property, and (d) collect from the Broker proceeds received upon such redemptions or sales. 4.3 APPOINTMENT OF BROKER. The Company hereby directs the Trustee to appoint Broker to effect investment transactions on the Plan's behalf. SECTION 5 - REPORTING AND RECORDKEEPING 5.1 RECORDS AND REPORTS. The Trustee shall keep accurate records of all amounts received to and disbursed from the Fund and the investments and other transactions of the Fund for at least six years following the date of such transaction. The Trustee shall provide a report of the assets of the Fund to the Named Fiduciary from time to time, but at least annually. The Trustee may rely on the fair market value of the property of the Fund as reported by the recordkeeper and the Trustee shall be fully protected in relying on such values. 5.2 REVIEW OF REPORTS. If, within ninety (90) days after the Trustee mails to the Named Fiduciary a statement with respect to the Fund, the Named Fiduciary has not given the Trustee written notice of any exception or objection thereto, the statement shall be deemed to have been approved, and in such case, to the extent permitted by ERISA, the Trustee shall not be liable for any matters in such statements. The Named Fiduciary or its agent, upon giving prior written notice to Trustee, shall have the right at its own expense to inspect the Trustee's books and records directly relating to the Fund during normal business hours. The Trustee shall be reimbursed its actual costs for making such books and records available for inspection. 5.3 NON-FUND ASSETS. The duties of the Trustee shall be limited to the assets held in the Fund, and the Trustee shall have no duties with respect to assets held by any other person including, without limitation, any other trustee for the Plan. The Company hereby agrees that the Trustee shall not serve as, and shall not be deemed to be, a co-trustee under the circumstances, and shall have no co-fiduciary liability for any other person or trustee. SECTION 6 - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION 6.1 COMPENSATION AND EXPENSES. The Trustee shall be entitled to compensation for services under this Agreement as set forth in Exhibit A. The Company acknowledges that the Trustee may increase the amount of compensation on an annual basis with sixty (60) days' prior written notice to the Company. The Trustee shall also be entitled to receive as part of its compensation any amounts earned under Section 3.1(f) and to reimbursement for expenses incurred by it in the discharge of its duties under this Agreement in accordance with Section 3.1. The Trustee is authorized to charge and collect from the Fund any and all such fees and expenses, unless the Company objects within 30 days of receiving notice of the Trustee's intent to collect its fees and expenses from the Fund. 6.2 TAX OBLIGATIONS. To the extent an Authorized Party has provided necessary information to the Trustee, the Trustee may use reasonable efforts to assist such Authorized 7

Party to notify the Company or the Named Fiduciary (as appropriate) of any responsibility for payment of taxes, withholding, certification and reporting requirements, claims for exemptions or refund, interest, penalties and other related expenses of the Fund ("Tax Obligations"). Notwithstanding the foregoing, the Trustee shall have no responsibility or liability for any Tax Obligations now or hereafter imposed on the Company or the Fund by any taxing authorities, domestic or foreign, except as provided by applicable law. To the extent the Trustee is responsible under any applicable law for payment of any Tax Obligation on behalf of the Fund or the Trust, the Named Fiduciary shall cause the appropriate Authorized Party to inform the Trustee of all Tax Obligations, shall direct the Trustee with respect to the performance of such Tax Obligations, and shall provide the Trustee with all information required by the Trustee to meet such Tax Obligations. 6.3 INDEMNIFICATION. The Company, and to the extent permitted by ERISA, the Plan, shall indemnify and hold harmless the Trustee from all claims, liabilities, losses, damages and expenses, including reasonable attorney's fees and expenses (including Tax Obligations) incurred by the Trustee in connection with this Agreement, except as a result of the Trustee's own negligence or willful misconduct. This indemnification shall survive the termination of this Agreement. 6.4 FORCE MAJEURE. The Trustee shall not be responsible or liable for any losses to the Fund resulting from nationalization, expropriation, devaluation, seizure, or similar action by any governmental authority, de facto or de jure; or enactment, promulgation, imposition or enforcement by any such governmental authority of currency restrictions, exchange controls, levies or other charges affecting the Fund's property; or acts of war, terrorism, insurrection or revolution; or acts of God; or any other similar event beyond the control of the Trustee or its agents. This Section shall survive the termination of this Agreement. SECTION 7 - AMENDMENT, TERMINATION, RESIGNATION, REMOVAL 7.1 AMENDMENT. This Agreement may be amended only by written agreement signed by the parties hereto. 7.2 REMOVAL OR RESIGNATION OF TRUSTEE. The Trustee may be removed with respect to all or part of the Fund upon receipt of sixty (60) days' written notice from the Named Fiduciary. The Trustee may resign as Trustee hereunder upon sixty (60) days' written notice delivered to the Named Fiduciary. In the event of such removal or resignation, the successor trustee will be appointed by the Named Fiduciary, and the retiring Trustee shall transfer the Fund, less such amounts as may be reasonable and necessary to cover its compensation and direct expenses including but not limited to, a pro-rata share of the fees described in Section 6.1. In the event the Company fails to appoint a successor trustee within sixty (60) days of receipt of written notice of resignation, the Trustee reserves the right to seek the appointment of a successor trustee from a court of competent jurisdiction. The Company shall indemnify the Trustee from any costs incurred by the Trustee in seeking such appointment. The Trustee shall have no duties, responsibilities or liability with respect to the acts or omissions of any successor trustee. 8

7.3 MERGER OR CONSOLIDATION OF TRUSTEE. Any entity into which the Trustee may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which the Trustee is a party, or any entity succeeding to the trust business of the Trustee, shall become the successor of the Trustee hereunder, without the execution or filing of any instrument or the performance of any further act on the part of the parties hereto. 7.4 PLAN TERMINATION. Upon termination of the Plan, the Trustee shall distribute all assets then constituting the Fund, less any fees and expenses payable from the Fund, pursuant to the instructions of the Named Fiduciary. The Trustee shall be entitled to assume that such distributions are in full compliance with and not in violation of the terms of the Plan or any applicable law. 7.5 PROPERTY NOT TRANSFERRED. The Trustee reserves the right to retain such property as is not suitable for distribution or transfer at the time of the termination of the Plan or this Agreement and shall hold such property for the benefit of those persons or other entities entitled to such property until such time as the Trustee is able to make distribution. The Company shall indemnify the Trustee from any costs incurred by the Trustee for retaining the property until it can be distributed. Upon the appointment and acceptance of a successor trustee, the Trustee's sole duties shall be those of a custodian with respect to the property not transferred. SECTION 8 - ADDITIONAL PROVISIONS 8.1 ASSIGNMENT OR ALIENATION. Except as may be provided by law, the Fund shall not be subject to any form of attachment, garnishment, sequestration or other actions of collection afforded creditors of the Company, participants or beneficiaries under the Plan. The Trustee shall not recognize any assignment or alienation of benefits unless an Authorized Instruction is received. 8.2 GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the laws of the State of Connecticut, to the extent not preempted by Federal law. 8.3 NECESSARY PARTIES. The Trustee reserves the right to seek a judicial or administrative determination as to its proper course of action under this Agreement. Nothing contained herein will be construed or interpreted to deny the Trustee, the Named Fiduciary, or the Company the right to have the Trustee's account judicially determined. To the extent permitted by law, only the Trustee, the Named Fiduciary and the Company shall be necessary parties in any application to the courts for an interpretation of this Agreement or for an accounting by the Trustee, and no participant under the Plan or other person having an interest in the Fund shall be entitled to any notice or service of process. Any final judgment entered in such an action or proceeding shall, to the extent permitted by law, be conclusive upon all persons. The Company shall indemnify the Trustee for any costs incurred by the Trustee in seeking such judgment. 8.4 NOTICES. All notices and other communications hereunder shall be in writing and shall be sufficient if delivered by hand or if sent by telefax or mail (including electronic mail), postage prepaid, addressed: 9

(a) If to the Trustee: Catherine M. Krokus President ING National Trust 151 Farmington Ave., TNA1 Hartford, Connecticut 06156 (b) If to the Company: Central Gas & Electric Corporation 284 Soutrh Avenue Poughkeepsie, NY 12601-4879 The parties may by like notice, designate any future or different address to which subsequent notices shall be sent. Any notice shall be deemed given when received. 8.5 NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are intended to benefit only the parties hereto, their respective successors and assigns, and participants and their beneficiaries under the Plan. There are no other third party beneficiaries. 8.6 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument and may be sufficiently evidenced by one counterpart. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the effective date set forth above.
CENTRAL GAS & ELECTRIC CORPORATION By: ___________________________ ING NATIONAL TRUST By: ____________________________

Name: _________________________ Title: __________________________

Name: ___________________________ Title: __________________________

10

EXHIBIT A FEES In consideration for services rendered according to the terms of this Agreement, the Trustee shall be paid according to the following fee schedule:
For Initial calendar year plan is with ING National Trust: For calendar years after initial year of effective date with ING National Trust: $500

$500

In the event the annual payment is not received by the Trustee as of December 15th of a calendar year, the Trustee shall notify the Company. The Company shall, on behalf of the Plan, immediately forward to the Trustee the difference between the amount due and the amount the Trustee received. 11

EXHIBIT (10)(iii)20 AMENDMENT NO. 2 TO THE CH ENERGY GROUP, INC. LONG-TERM PERFORMANCE-BASED INCENTIVE PLAN WHEREAS, the CH Energy Group, Inc. ("Corporation") Long-Term Performance-Based Incentive Plan ("Plan") became effective on January 1, 2000 and was last amended and restated effective January 1, 2001, and WHEREAS, the Corporation wishes further to amend the Plan to provide that Non-qualified Stock Options shall be granted to Non-Employee Directors only at the discretion of the "Committee" (as defined in the Plan); NOW, THEREFORE, in furtherance of such goal and pursuant to authority of the Board of Directors of the Corporation granted on February 1, 2002, the first sentence of Section 5A of the Plan is hereby amended, effective January 1, 2002, to read as follows: "Commencing January 1, 2002, if authorized by the Committee, each Non-Employee Director shall annually be granted 1,000 Non-Qualified Stock Options on January 1 of each year." Pursuant to said authorization of the Board of Directors of the Corporations, I have executed this Amendment No. 2 this 1st day of February, 2002.
/s/ PAUL J. GANCI ---------------------------PAUL J. GANCI Chairman of the Board and Chief Executive Officer

EXHIBIT (10)(iii)21 SUPPLEMENTAL PARTICIPATION AGREEMENT A Participation Agreement made and entered into this 1st day of October, 2001, between Central Hudson Enterprises Corporation (hereinafter referred to as the "Participating Employer"), Central Hudson Gas & Electric Corporation (hereinafter referred to as the "Employer"), and ING National Trust (hereinafter referred to as the "Trustees"). WHEREAS, the Participating Employer desires to reward its employees for faithful service, to establish a bond between employer and employee, to provide an incentive for efficient and conscientious work, to provide a fund for retirement, disability, or death, and to retain high-calibre fellow employees; and WHEREAS, there exists a Profit Sharing Plan entered into on the 1st day of October, 2001 namely the Central Hudson Gas & Electric Corporation Savings Incentive Plan, called the "Plan," between Employer and the Trustees (a copy being attached hereto as Exhibit "A" and made a part hereof by reference); and WHEREAS, Plan Section 9.1 provides that any other Participating Employer may, with the consent of the Employer, adopt the Plan and participate therein by a properly executed document evidencing said intent of said Participating Employer; NOW, THEREFORE, the Participating Employer hereby becomes a party to the Plan, effective the 1st day of October, 2001, and the Employer and the Trustees hereby consent to such adoption and participation upon the following terms: (1) Wherever a right or obligation is imposed upon the Employer by the terms of the Plan, the same shall extend to the Participating Employer as the "Employer" under the Plan and shall be separate and distinct from that imposed upon the Employer. It is the intention of the parties that the Participating Employer shall be a party to the Plan and treated in all respects as the Employer thereunder, with its employees to be considered as the Employees or Participants, as the case may be, thereunder. However, the participation of the Participating Employer in the Plan shall in no way diminish, augment, modify, or in any way affect the rights and duties of the Employer, its Employees, or Participants, under the Plan. (2) The Trustees hereby agree to receive and allocate contributions made to the Plan by the Employer and by the Participating Employer, as well as to do and perform all acts

that are necessary to keep records and accounts of all funds held for Participants who are Employees of the respective employers. (3) The execution of this Agreement by this Participating Employer shall be construed as the adoption of the Plan in every respect as if said Plan had this date been executed between the Participating Employer and the Trustees, except as otherwise expressly provided herein or in any amendment that may subsequently be adopted hereto. (4) All actions required by the Plan to be taken by the Employer shall be effective with respect to the Participating Employer if taken by the Employer and pursuant to Plan Section 9.3, the Participating Employer hereby irrevocably designates the Employer as its agent for such purposes. IN WITNESS WHEREOF, the Participating Employer, the Employer and the Trustees have caused this Supplemental Participation Agreement to be executed in their respective names on the day and date first above written. Signed, sealed and delivered in the presence of: Central Hudson Enterprises Corporation
BY ------------------------------------------------------------------As to Participating Employer /s/ ALLEN PAGE ------------------------------

Signed, sealed, and delivered in the presence of:
/s/ THOMAS C. BROCKS ---------------------------------BY /s/ THOMAS C. BROCKS ----------------------------

---------------------------------As to Employer TRUSTEES ------------------------------------------------------------------

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

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

As to Trustees -------------------------------------

EXHIBIT (10)(iii)22 CH ENERGY GROUP, INC. DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN As Amended and Restated, Effective July 1, 2001

TABLE OF CONTENTS PAGE ARTICLE I TITLE AND DEFINITIONS............................................1

1.1 Title.................................................................1 1.2 Definitions...........................................................1 ARTICLE II ARTICLE III PARTICIPATION....................................................6 DEFERRAL ELECTIONS...............................................6

3.1 Elections to Defer Compensation.......................................6 3.2 Investment Elections..................................................8 ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING..............................8

4.1 Deferral Accounts.....................................................8 4.2 Company Discretionary Contribution Account............................9 4.3 Trust Funding........................................................10 ARTICLE V ARTICLE VI VESTING.........................................................10 DISTRIBUTIONS...................................................11

6.1 Distribution of Deferred Compensation and Discretionary Company Contributions...............................11 6.2 Non-Scheduled In-Service Withdrawals.................................12 6.3 Hardship Distribution................................................13 6.4 Inability to Locate Participant......................................13 ARTICLE VII ADMINISTRATION..................................................14

7.1 Committee............................................................14 7.2 Committee Action.....................................................14 7.3 Powers and Duties of the Committee...................................14 7.4 Construction and Interpretation......................................15 7.5 Information..........................................................15 (i)

PAGE 7.6 Compensation, Expenses and Indemnity.................................15 7.7 Quarterly Statements.................................................16 7.8 Disputes.............................................................16 ARTICLE VIII MISCELLANEOUS...................................................17

8.1 Unsecured General Creditor...........................................17 8.2 Restriction Against Assignment.......................................17 8.3 Withholding..........................................................17 8.4 Amendment, Modification, Suspension or Termination...................18 8.5 Governing Law........................................................18 8.6 Receipt or Release...................................................18 8.7 Payments on Behalf of Persons Under Incapacity.......................18 8.8 Limitation of Rights and Employment Relationship.....................18 8.9 Headings.............................................................19

(ii)

CH ENERGY GROUP, INC. DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN ARTICLE I TITLE AND DEFINITIONS 1.1. TITLE. This Plan shall be known as the CH Energy Group, Inc. Directors and Executives Deferred Compensation Plan. 1.2. DEFINITIONS. Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below. (a) "Account" or "Accounts" shall mean a Participant's Deferral Account and/or the Company Discretionary Contribution Account. (b) "Base Salary" shall mean a Participant's annual base salary, excluding bonus, incentive and all other remuneration for services rendered to the Company and prior to reduction for any salary contributions to a plan established pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of the Code. (c) "Beneficiary" or "Beneficiaries" shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant's death. No Beneficiary designation shall become effective until it is filed with the Committee. However, no designation of a Beneficiary other than the Participant's spouse shall be valid unless consented to in writing by such spouse. Any designation shall be revocable at any time through a written instrument filed by the Participant with the Committee with or without the consent of the previous Beneficiary. If there is no Beneficiary designation in effect, or there is no surviving designated Beneficiary, the Participant's surviving spouse shall be the Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the Participant's estate (which shall include either the Participant's probate estate or living trust) shall be the Beneficiary. In any case where there is no such personal representative of the Participant's estate duly appointed and acting in that capacity within ninety (90) days after the Participant's death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not 1

to exceed one hundred eighty (180) days after the Participant's death), then Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person's living parent(s) to act as custodian, (b) if that person's parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within sixty (60) days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor. Payment by the Company pursuant to any unrevoked Beneficiary designation, or to the Participant's estate if no such designation exists, of all benefits owed hereunder shall terminate any and all liability of the Company. (d) "Board of Directors" or "Board" shall mean the Board of Directors of CH Energy Group, Inc. (e) "Bonuses" shall mean the incentive compensation determined under the Company's Executive Annual Incentive Plan earned during the Plan Year. (f) "Change of Control" shall mean: (1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 1.2(f); or (2) Individuals who, as of December 1, 1998, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then compromising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but 2

excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (3) Consummation of a reorganization, merger or consolidation or sale, or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (4) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company; (g) "Change of Control Payments" shall mean a payment from Company as a result of a Change of Control; (h) "Change of Control Termination" shall mean any termination of a Participant's employment that gives rise to severance pay under such Participant's Change of Control Employment Agreement entered into with the Company, regardless of whether or not such termination of employment occurs after such Participant's attainment of age 55. (i) "Code" shall mean the Internal Revenue Code of 1986, as amended. (j) "Committee" shall mean the Committee appointed by the Chief Executive Officer of the Company to administer the Plan in accordance with Article VII. 3

(k) "Company" shall mean CH Energy Group, Inc. and any successor corporations. Company shall include each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code) of which CH Energy Group, Inc. is a component member, if the Board provides that such corporation shall participate in the Plan and such corporation's governing Board of Directors adopts this Plan. (l) "Company Discretionary Contribution Account" shall mean the bookkeeping account maintained by the Company for each Participant that is credited with an amount equal to the Company Discretionary Contribution Amount, if any, and earnings and losses pursuant to Section 4.2. (m) "Company Discretionary Contribution Amount" shall mean, for each Participant for a Plan Year, an additional discretionary amount allocated to a Participant under this Plan as determined by the Company. Such amount may differ from Participant to Participant both in amount, including no contribution, and as a percentage of Compensation. (n) "Compensation" shall mean Base Salary, Bonuses, Supplementary Retirement Plan Payments, Change of Control Payments and Directors Fees that the Participant is entitled to receive for services rendered to the Company. (o) "Deferral Account" shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (1) the portion of the Participant's Compensation that he or she elects to defer, including any amounts deferred under the Central Hudson Gas & Electric Corporation Directors' Deferred Compensation Plan, and income earned thereon as of the Effective Date, and (2) interest pursuant to Section 4.1. (p) "Directors Fees" shall mean the retainers and fees a member of the Board is entitled to receive for services rendered in his or her capacity as a member of the Board. (q) "Distributable Amount" shall mean the sum of the amounts credited to a Participant's Deferral Account and the Company Discretionary Contribution Account. (r) "Effective Date" shall mean January 1, 2000. (s) "Eligible Director" shall mean a member of the Company's Board of Directors who is not an employee of the Company. (t) "Eligible Employee" shall mean executive officers and other executives and key management employees of the Company that meet criteria approved by the Compensation and Succession Committee of the Board of Directors. (u) "Eligible Individual" shall mean Eligible Directors and Eligible Employees. 4

(v) "Fund" or "Funds" shall mean one or more of the investment funds or Policies selected by the Committee pursuant to Section 3.2(b). (w) "Hardship Distribution" shall mean a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of his or her Dependent (as defined in Section 152(a) of the Code), loss of a Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that would constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, a Hardship Distribution may not be made to the extent that such hardship is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under this Plan. (x) "Initial Election Period" for an Eligible Individual shall mean the thirty (30) day period following the time an employee or member of the Board of Directors becomes an Eligible Individual. (y) "Rate of Return" shall mean for each Fund an amount equal to the net rate of gain or loss on the assets of such Fund during the period amounts are invested in the Fund. (z) "Long Term Disability" shall be a disability of an Eligible Employee where such employee is totally and permanently unable to continue in active employment in any position with the Company as a result of injury or illness, as determined by the Company. (aa) "Non-Scheduled In-Service Withdrawal" shall mean an election by a Participant in accordance with Section 6.2 to receive a withdrawal of amounts from his or her Deferral Account and Company Discretionary Contribution Account prior to the time in which such Participant would otherwise be entitled to such amounts. (bb) "Participant" shall mean any Eligible Individual who becomes a Participant in accordance with Article II. (cc) "Payment Date" for payment of a Distributable Amount shall mean the time as soon as administratively practicable after (1) the end of the calendar quarter in which the Participant's employment or service terminates for any reason, or (2) the Scheduled In-Service Withdrawal Date. (dd) "Plan" shall mean the CH Energy Group, Inc. Directors and Executives Deferred Compensation Plan set forth herein, now in effect, or as amended from time to time. (ee) "Plan Year" shall mean the twelve (12) consecutive month period beginning on each January 1 and ending on each December 31. 5

(ff) "Retirement" shall mean (i) with respect to any Participant who is an Eligible Employee, such Participant's termination of employment (other than in a Change of Control Termination) with the Company on or after age fifty-five (55), and (ii) with respect to any Participant who is an Eligible Director, such Participant's cessation of service with the Company for any reason. (gg) "Scheduled In-Service Withdrawal Date" shall be the distribution date elected by the Participant for an inservice withdrawal of all amounts of Compensation deferred and Company Discretionary Contribution Amounts, as set forth on the election form last submitted to the Company, and earnings and losses attributable thereto. (hh) "Supplementary Retirement Plan" shall mean the Supplementary Retirement Plan of the Company, now in effect or as amended from time to time. (ii) "Supplementary Retirement Plan Payments" shall mean benefit payments payable under the Supplementary Retirement Plan. (jj) "Trust" shall mean the CH Energy Group, Inc. Directors and Executives Deferred Compensation Plan Trust. (kk) "Trustee" shall mean the trustee of the Trust. ARTICLE II PARTICIPATION A Participant in the Central Hudson Gas & Electric Corporation Directors' Deferred Compensation Plan in effect immediately prior to the Effective Date of this Plan shall continue such participation as a Participant in this Plan. Any other Eligible Individual shall become a Participant in this Plan by electing to defer a portion of his or her Compensation in accordance with Section 3.1. ARTICLE III DEFERRAL ELECTIONS 3.1. ELECTIONS TO DEFER COMPENSATION. (a) INITIAL ELECTION PERIOD. Subject to the provisions of Article II, each Eligible Employee may elect to defer Base Salary, Bonuses, Supplementary Retirement Plan Payments and/or Change of Control Payments by filing with the Committee an election that conforms to the requirements of this Section 3.1 on a form provided by the Committee, no later than the last day of his or her Initial Election Period. An Eligible Director may, subject to the 6

provisions of Article II elect to defer Directors' Fees by filing with the Committee an election that conforms with the requirements of this Section 3.1, on a form provided by the Committee, no later than the last day of his or her Initial Election Period. (b) GENERAL RULE. The amount of Compensation which an Eligible Individual may elect to defer is such Compensation earned on or after the time at which the Eligible Individual elects to defer Compensation in accordance with Sections 1.2(w) and 3.1(a). The amount elected by an Eligible Employee shall be a percentage of Base Salary, Bonuses, Supplementary Retirement Plan Payments and Change of Control Payments. The Eligible Employee's Base Salary deferral election shall not exceed 50% of the Eligible Employee's base salary. The Eligible Employee's Bonuses, Supplementary Retirement Plan Payments and Change of Control Payments can be deferred up to 100%. In addition, the Committee may, in its sole and absolute discretion, further limit deferrals for income tax withholding and employee benefit plan withholding requirements. An Eligible Director may defer up to 100% of his or her Director's Fees. The minimum contribution which may be made in any Plan Year by an Eligible Individual shall not be less than $5,000. (c) DURATION OF COMPENSATION DEFERRAL ELECTION. An Eligible Employee's initial election to defer Base Salary must be filed on or before December 20 and is to be effective for the first day of the next following Plan Year. An Eligible Employee may renew, increase, decrease or terminate a deferral election with respect to Base Salary, Bonuses, Supplementary Retirement Plan Payments and/or Change of Control Payments for any subsequent Plan Year by filing a new election on or before December 20, which election shall be effective on the first day of the next following Plan Year. Any subsequent election with respect to Bonuses must be filed by December 20 of the year prior to the year in which the Bonuses are earned. An Eligible Employee's election with respect to Change of Control Payments must be made on or before December 20 and shall be effective on the first day of the next following Plan Year. All elections under this Section 3.1 shall continue until changed in writing by the Eligible Individual, such change to be effective as of the first day of the next following Plan Year. In the case of an employee or director who becomes an Eligible Individual on or after January 1, such Eligible Individual shall have thirty (30) days from the date he or she has become an Eligible Individual to make an Initial Election with respect to amounts capable of being deferred under the Plan. Such election shall be for the remainder of the Plan Year. Notwithstanding the foregoing, the election under which a distribution under the Plan will be made must be in place at least twelve (12) months prior to receipt of the distribution or the immediately prior election option will prevail. (d) ELECTIONS OTHER THAN ELECTIONS DURING THE INITIAL ELECTION Period. Subject to the limitations of Section 3.1(b) above, any Eligible Individual who fails to elect to defer Compensation during his or her Initial Election Period may subsequently become a Participant, and any Eligible Individual who has terminated a prior Compensation deferral election may elect to again defer Compensation, by filing an election, on a form provided by the Committee, to defer Compensation as described in Sections 3.1(b) and 3.1(c) above. An election to defer 7

Compensation must be filed on or before December 20 and will be effective for Compensation earned in the next following Plan Year. 3.2. INVESTMENT ELECTIONS. (a) At the time of making the deferral elections described in Section 3.1, the Participant shall designate, on a form provided by the Committee, the types of investments the Participant's Account will be deemed to be invested in for purposes of determining the amount of earnings and losses to be credited to that Account. In making the designation pursuant to this Section 3.2, the Participant may specify that all, or any multiple of, his or her Deferral Account and Company Discretionary Contribution Account be deemed to be invested in one or more of the types of investments provided under the Plan. A Participant may change the designation made under this Section 3.2 each day in accordance with procedures established by the Committee. If a Participant fails to elect a type of investment fund under this Section 3.2, he or she shall be deemed to have elected the Money Market type of investment fund. (b) The Committee shall select from time to time, in its sole discretion, a commercially available investment fund of each of the types provided under the Plan to be the Funds. The Rate of Return of each such commercially available investment fund shall be used to determine the amount of earnings or losses to be credited to Participant's Account under Article IV. ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING 4.1. DEFERRAL ACCOUNTS. The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant's Deferral Account shall be further divided into separate subaccounts ("investment fund subaccounts"), each of which corresponds to an investment fund elected by the Participant pursuant to Section 3.2(a). A Participant's Deferral Account shall be credited as follows: (a) Within five (5) days after each payroll date, the Committee shall credit the investment fund subaccounts of the Participant's Deferral Account with an amount equal to the Compensation deferred by the Participant during each pay period in accordance with the Participant's election under Section 3.2(a); that is, the portion of the Participant's deferred Compensation that the Participant has elected to be deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund; 8

(b) As of each day, each investment fund subaccount of a Participant's Deferral Account shall be credited with earnings or losses in an amount equal to that determined by multiplying (i) the balance credited to such investment fund subaccount as of the preceding day plus contributions credited to the Participant's Deferral Account since the preceding day by (ii) the Rate of Return for the corresponding fund selected by the Company pursuant to Section 3.2(b). (c) In the event that a Participant elects for a given Plan Year's deferral of Compensation to have a Scheduled InService Withdrawal Date, all amounts attributed to the deferral of Compensation for such Plan Year shall be accounted for in a manner which allows separate accounting for the deferral of Compensation and investment gains and losses associated with such Plan Year's deferral of Compensation. 4.2. COMPANY DISCRETIONARY CONTRIBUTION ACCOUNT. If necessary, the Committee shall establish and maintain a Company Discretionary Contribution Account for each Participant under the Plan. Each Participant's Company Discretionary Contribution Account shall be further divided into separate investment fund subaccounts corresponding to the investment fund elected by the Participant pursuant to Section 3.2(a). A Participant's Company Discretionary Contribution Account shall be credited as follows: (a) Within five (5) days after each payroll date, the Committee shall credit the investment fund subaccounts of the Participant's Company Discretionary Contribution Account with an amount equal to the Company Discretionary Contribution Amount, if any, applicable to that Participant; that is, the portion of the Company Discretionary Contribution Amount, if any, which the Participant elected to be deemed to be invested in a certain type of investment fund shall be credited to the corresponding investment fund subaccount; and (b) As of each day, each investment fund subaccount of a Participant's Company Discretionary Contribution Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus contributions credited to the Participant's Company Discretionary Contribution Account since the preceding day by the Rate of Return for the corresponding Fund selected by the Company pursuant to Section 3.2(b). (c) In the event a Participant elects that the Company Discretionary Contribution Amount for a given Plan Year have a Scheduled In-Service Withdrawal Date, all amounts attributed to the Company Discretionary Contribution Amount for such Plan Year shall be accounted for in a manner which allows separate accounting for the Company Discretionary Contribution Amount and investment gains and losses associated with such Plan Year's Company Discretionary Contribution Amount. 9

4.3. TRUST FUNDING. The Company has created a Trust with First American Trust Company serving as initial Trustee. The Company shall cause the Trust to be funded each year. The Company shall contribute to the Trust an amount equal to the Compensation deferred by each Participant for the Plan Year. The Company shall also contribute to the Trust an amount equal to the Company Discretionary Contribution Amount, if any, for the Plan Year. Although the principal of the Trust and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan Participants and beneficiaries as set forth therein, neither the Participants nor their beneficiaries shall have any preferred claim on, or any beneficial ownership in, any assets of the Trust prior to the time such assets are paid to the Participants or beneficiaries as benefits and all rights created under this Plan shall be unsecured contractual rights of Plan Participants and beneficiaries against the Company. Any assets held in the Trust will be subject to the claims of Company's general creditors under federal and state law in the event of insolvency as defined in Section 4.2(a) of the Trust. The assets of the Plan and Trust shall never inure to the benefit of the Company and the same shall be held for the exclusive purpose of providing benefits to Participants and their beneficiaries. The sole exception to the foregoing shall be that amounts remaining after payment to a Participant of the Participant's vested Account balance, if any, shall be transferred by the Trustee to the Company. ARTICLE V VESTING A Participant's Deferral Account shall be 100% vested at all times. A Participant's Company Discretionary Contribution Account, if any, shall be 100% vested in the event of a Change of Control and, otherwise, shall vest in accordance with rules established by the Company, in its sole and absolute discretion. Such rules are hereby incorporated by reference into the Plan. 10

ARTICLE VI DISTRIBUTIONS 6.1. DISTRIBUTION OF DEFERRED COMPENSATION AND DISCRETIONARY COMPANY CONTRIBUTIONS. (a) DISTRIBUTION WITHOUT SCHEDULED IN-SERVICE WITHDRAWAL DATE. In the case of a Participant who terminates employment due to a Change of Control Termination or Long Term Disability, or who terminates employment or service due to Retirement, the Distributable Amount shall be paid to the Participant (and after his or her death to his or her Beneficiary) in the form of substantially equal quarterly installments over fifteen (15) years beginning on his or her Payment Date. Notwithstanding the foregoing, a Participant described in the preceding sentence may elect from among the following optional forms of benefit in accordance with the procedures set forth below: (1) A lump sum payment on the Participant's Payment Date; (2) Substantially equal quarterly installments over five (5) years beginning on the Participant's Payment Date; and (3) Substantially equal quarterly installments over ten (10) years beginning on the Participant's Payment Date; Elections regarding the form of distributions to be made following Retirement or Long Term Disability shall be made on a Retirement/Long Term Disability election form provided to the Company together with deferral elections made under the provisions of Article III (3.1) hereof, and may be changed or revoked at any time or from time to time, but in no event less than one year prior to the Participant's Retirement or Long Term Disability. The Committee may determine, from time to time, whether or not and on what terms and conditions elections regarding the form of distributions to be made following a Change of Control Termination may be made, and shall establish such forms and procedures for, and rules regarding changes and revocations of, such elections as the Committee shall from time to time determine to be appropriate. All elections under this Section 3.1 shall continue in effect unless and until a change or revocation thereof becomes effective in accordance with the foregoing. Notwithstanding any provision to the contrary, in the event a Participant's Distributable Amount is less than $25,000, such Distributable Amount shall be distributed to the Participant or his or her Beneficiary in a lump sum. In the event of termination of employment or service for any other reason, distribution to the Participant shall be made in a lump sum on his or her Payment Date. 11

The Participant's Accounts shall continue to be credited with earnings pursuant to Section 4.1 of the Plan until all amounts credited to his or her Accounts under the Plan have been distributed. (b) DISTRIBUTION WITH SCHEDULED IN-SERVICE WITHDRAWAL DATE. In the case of a Participant who has elected a Scheduled In-Service Withdrawal Date for a distribution while still in the employ or service of the Company, such Participant shall receive his or her Distributable Amount, but only with respect to those deferrals of Compensation and vested Company Discretionary Contribution Amounts and earnings on such deferrals of Compensation and vested Company Discretionary Contribution Amounts as shall have been elected by the Participant to be subject to the Scheduled In-Service Withdrawal Date in accordance with Section 1.2(ff) of the Plan. A Participant's Scheduled In-Service Withdrawal Date with respect to amounts of Compensation deferred in a given Plan Year and vested Company Discretionary Contribution Amounts must be at least two (2) years from the last day of the Plan Year for which the deferrals of Compensation and Company Discretionary Contribution Amounts are made. A Participant may extend the Scheduled In-Service Withdrawal Date for the deferral of Compensation and Company Discretionary Contribution Amounts for any Plan Year, provided each extension occurs at least one (1) year before the Scheduled In-Service Withdrawal Date and is for a period of not less than two (2) years from the Scheduled In-Service Withdrawal Date. The Participant shall have the right to twice modify any Plan Year's Scheduled In-Service Withdrawal Date. In the event a Participant terminates employment or service with the Company prior to a Scheduled In-Service Withdrawal Date, Section 6.1(a) will govern distributions under this Plan. (c) DEATH BENEFIT. In the event a Participant dies after he or she has retired from the Company and still has a balance in his or her Account, the balance shall continue to be paid to the Participant's Beneficiary in quarterly installments for the remainder of the period as elected by the Participant. In the event a Participant dies while in the active employment or service of the Company, the Participant's Account balance, whether or not vested, will be paid in a lump sum to the Participant's Beneficiary. 6.2. NON-SCHEDULED IN-SERVICE WITHDRAWALS. A Participant shall be permitted to elect a Non-Scheduled In-Service Withdrawal from his or her Deferral Account and vested Company Discretionary Contribution Account prior to the Payment Date, subject to the following restrictions: (a) The election to take a Non-Scheduled In-Service Withdrawal shall be made by filing a form provided by and filed with the Committee prior to the end of any calendar month. (b) The amount of the Non-Scheduled In-Service withdrawal shall be paid in a single lump sum as soon as practicable after the end of the calendar month in which the Non-Scheduled In-Service Withdrawal election is made. 12

(c) If a Participant requests a Non-Scheduled In-Service Withdrawal of his or her entire Deferral Account and vested Company Discretionary Contribution Account, 10% of the Deferral Account and vested Company Discretionary Contribution Account shall be permanently forfeited and the Company shall have no obligation to the Participant or his or her Beneficiary with respect to such forfeited amount. If a Participant receives a NonScheduled In-Service Withdrawal of less than the entire Deferral Account and vested Company Discretionary Contribution Account, such Participant shall forfeit 10% of the gross amount to be distributed from the Participant's Deferral Account and vested Company Discretionary Contribution Account. (d) If a Participant receives a Non-Scheduled In-Service Withdrawal of either all or a part of his or her Deferral Account and Company Discretionary Contribution Account, the Participant will be ineligible to participate in the Plan for the balance of the Plan Year and for the following Plan Year. 6.3. HARDSHIP DISTRIBUTION. A Participant shall be permitted to elect a Hardship Distribution in accordance with Section 1.2(v) of the Plan prior to the Payment Date, subject to the following restrictions: (a) The election to take a Hardship Distribution shall be made by filing a form provided by and filed with Committee prior to the end of any calendar month. (b) The Committee shall have made a determination that the requested distribution constitutes a Hardship Distribution in accordance with Section 1.2(v) of the Plan. (c) The amount determined by the Committee as a Hardship Distribution shall be paid in a single lump sum as soon as practicable after the end of the calendar month in which the Hardship Distribution election is made and approved by the Committee. (d) If a Participant receives a Hardship Distribution, the Participant will be ineligible to participate in the Plan for the balance of the Plan Year and the following Plan Year. 6.4. INABILITY TO LOCATE PARTICIPANT. In the event that the Committee is unable to locate a Participant or Beneficiary within two (2) years following the required Payment Date, the amount allocated to the Participant's Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings. 13

ARTICLE VII ADMINISTRATION 7.1. COMMITTEE. A Committee shall be appointed by, and serve at the pleasure of, the Board of Directors. The number of members comprising the Committee shall be determined by the Board which may from time to time vary the number of members. A member of the Committee may resign by delivering a written notice of resignation to the Chief Executive Officer. The Chief Executive Officer may remove any member of the Committee by delivering a certified copy of its resolution of removal to such member. Vacancies in the membership of the Committee shall be filled promptly by the Chief Executive Officer. 7.2. COMMITTEE ACTION. The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to him or herself as a Participant. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee. 7.3. POWERS AND DUTIES OF THE COMMITTEE. The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: (1) To select the Funds in accordance with Section 3.2(b) hereof; (2) To construe and interpret the terms and provisions of this Plan; (3) To compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries; (4) To maintain all records that may be necessary for the administration of the Plan; (5) To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law; 14

(6) To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; (7) To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; and (8) To take all actions necessary for the administration of the Plan, including determining the underlying funding instruments for benefits under the Plan. 7.4. CONSTRUCTION AND INTERPRETATION. The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretations or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan. 7.5. INFORMATION. To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other events which cause termination of their participation in this Plan, and such other pertinent facts as the Committee may require. 7.6. COMPENSATION, EXPENSES AND INDEMNITY. (a) The members of the Committee shall serve without compensation for their services hereunder. (b) The Committee is authorized, at the expense of the Company, to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees in connection with the administration of the Plan shall be paid by the Company. (c) To the extent permitted by applicable state law, the Company shall indemnify and save harmless the Committee and each member thereof, the Board of Directors and any delegate of the Committee who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees, and to defend against such liabilities and claims arising out of their discharge, in good faith, of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law. 15

7.7. QUARTERLY STATEMENTS. Under procedures established by the Committee, a Participant shall receive a quarterly statement with respect to such Participant's Accounts. 7.8. DISPUTES. (a) CLAIM. A person who believes that he or she is being denied a benefit to which he or she is entitled under this Agreement (hereinafter referred to as "Claimant") may file a written request for such benefit with the Company, setting forth his or her claim. The request must be addressed to the President of the Company at its then principal place of business. (b) CLAIM DECISION. Upon receipt of a claim, the Committee on behalf of the Company shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Company may, however, extend the reply period for an additional ninety (90) days for special circumstances. If the claim is denied in whole or in part, the Company shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth: (A) the specified reason or reasons for such denial; (B) the specific reference to pertinent provisions of this Agreement on which such denial is based; (C) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or such information is necessary; (D) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and (E) the time limits for requesting a review under subsection (c). (c) REQUEST FOR REVIEW. Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Committee review the determination of the Company. Such request must be addressed to the Secretary of the Company, at its then principal place of business. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee. If the Claimant does not request a review within such sixty (60) day period, he or she shall be barred and estopped from challenging the Company's determination. (d) REVIEW OF DECISION. Within sixty (60) days after the Committee's receipt of a request for review, after considering all materials presented by the Claimant, the Committee will inform the Claimant in writing, in a manner calculated to be understood by the Claimant, the decision setting forth the 16

specific reasons for the decision containing specific references to the pertinent provisions of this Agreement on which the decision is based. If special circumstances require that the sixty (60) day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review. ARTICLE VIII MISCELLANEOUS 8.1. UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company. No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of the Company's assets shall be, and remain, the general unpledged, unrestricted assets of the Company. The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. It is the intention of the Company that this Plan be unfunded for purposes of the Code and for purposes of Title I of the Employee Retirement Income Security Act of 1974. 8.2. RESTRICTION AGAINST ASSIGNMENT. The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation. No part of a Participant's Accounts shall be liable for the debts, contracts, or engagements or any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant's Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct. 8.3. WITHHOLDING. There shall be deducted from each payment made under the Plan or any other Compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company in respect to such payment or this Plan. The Company shall have the right to reduce any payment (or Compensation) by the amount of cash sufficient to provide the amount of said taxes. 17

8.4. AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION. The Chief Executive Officer of the Company may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts. In the event that this Plan is terminated, the amounts allocated to a Participant's Accounts shall be distributed to the Participant or, in the event of his or her death, his or her Beneficiary in a lump sum within thirty (30) days following the date of termination. 8.5. GOVERNING LAW. This Plan shall be construed, governed and administered in accordance with the laws of the State of New York. 8.6. RECEIPT OR RELEASE. Any payment to a Participant or the Participant's Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. 8.7. PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY. In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefor, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee and the Company. 8.8. LIMITATION OF RIGHTS AND EMPLOYMENT RELATIONSHIP. Neither the establishment of the Plan and Trust nor any modification thereof, nor the creating of any fund or account, nor the payment of any benefits shall be construed as giving to any Participant or other person any legal or equitable right against the Company or the Trustee of the Trust except as provided in the Plan and Trust; and in no event shall the terms of employment or service of any Employee or Participant be modified or in any way be affected by the provisions of the Plan and Trust. 18

8.9. HEADINGS. Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof. IN WITNESS WHEREOF, the Company has caused this document to be executed by its duly authorized officer on this 17th day of December, 1999. CH ENERGY GROUP, INC. By: _____________________________________ 19

CH ENERGY GROUP, INC. AMENDMENT TO DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN WHEREAS, CH Energy Group, Inc. ("Energy Group") maintains its Directors and Executives Deferred Compensation Plan, in the form effective as of January 1, 2000 ("Plan"), WHEREAS, Energy Group wishes to amend the Plan (i) with respect to the duration of an election to defer Compensation under the Plan, (ii) to permit deferral under the Plan of benefits payable under Energy Group's Supplementary Retirement Plan, and (iii) to make certain technical changes, NOW, THEREFORE, in furtherance of such goal and pursuant to authority of the Board of Directors of Energy Group granted on June 22, 2001, Energy Group hereby amends and, as amended, restates the Plan, as attached, effective July 1, 2001: 1. A new Section 1.2(h) is added to Article I to read as follows: "(h) 'Change of Control Termination' shall mean any termination of a Participant's employment that gives rise to severance pay under such Participant's Change of Control Employment Agreement entered into with the Company, regardless of whether or not such termination of employment occurs after such Participant's attainment of age 55." and all following sections of Article I are redesignated and consecutively re-lettered. 2. Article I, Section 1.2(n) is amended to read as follows: "(n) 'Compensation' shall mean Base Salary, Bonuses, Supplementary Retirement Plan Payments, Change of Control Payments, and Directors Fees that the Participant 1

is entitled to receive for services rendered to the Company." 3. Article I, Section 1.2(s) is amended to add "who is not an employee of the Company." to the end of the last sentence. 4. Article I, Section 1.2(z) is amended to read as follows: "(z) 'Long Term Disability' shall be a disability of an Eligible Employee where such employee is totally and permanently unable to continue in active employment in any position with the Company as a result of injury or illness, as determined by the Company." 5. Article I, Section 1.2(cc) is amended to add the words "or service" after the word "employment". 6. Article I, Section 1.2(ee) is amended to read as follows: "(ee) 'Plan Year' shall mean the twelve (12) consecutive month period beginning on each January 1 and ending on each December 31." 7. Article I, Section 1.2 (ff) is amended to read as follows: "(ff) 'Retirement' shall mean (i) with respect to any Participant who is an Eligible Employee, such Participant's termination of employment (other than in a Change of Control Termination) with the Company on or after age fifty-five (55), and (ii) with respect to any Participant who is an Eligible Director, such Participant's cessation of service with the Company for any reason." 8. Article I, Section 1.2(gg) is amended to read as follows: "(gg) 'Scheduled In-Service Withdrawal Date' shall be the distribution date elected by the Participant for an inservice withdrawal of all amounts of Compensation deferred and Company Discretionary Contribution amounts, as set forth on the election form last submitted to the Company, and earnings and losses attributable thereto." 9. New Sections 1.2(hh) and (ii) are added to Article I to read as follows: 2

"(hh) 'Supplementary Retirement Plan' shall mean the Supplementary Retirement Plan of the Company now in effect or as amended from time to time." (ii) 'Supplementary Retirement Plan Payments' shall mean benefit payments payable under the Supplementary Retirement Plan." and current Sections 1.2(ii) and (jj) are redesignated Sections 1.2(jj) and (kk), respectively: 10. The first sentence of Article III, Section 3.1(a) is amended by adding "Supplementary Retirement Plan Payments and/or" before "Change of Control Payments". 11. Article III, Section 3.1(b) is amended to read as follows: "(b) GENERAL RULE. The amount of Compensation which an Eligible Individual may elect to defer is such Compensation earned on or after the time at which the Eligible Individual elects to defer Compensation in accordance with Sections 1.2(w) and 3.1(a). The amount elected by an Eligible Employee shall be a percentage of Base Salary, Bonuses, Supplementary Retirement Plan Payments and Change of Control Payments. The Eligible Employee's Base Salary deferral election shall not exceed 50% of the Eligible Employee's Base Salary. The Eligible Employee's Bonuses, Supplementary Retirement Plan Payments and Change of Control Payments can be deferred up to 100%. In addition, the Committee may, in its sole and absolute discretion, further limit deferrals for income tax withholding and employee benefit plan withholding requirements. An Eligible Director may defer up to 100% of his or her Director's Fees. The minimum contribution which may be made in any Plan Year by an Eligible Individual shall not be less than $5,000." 12. Article III, Section 3.1(c) of the Plan is amended to read as follows: "(c) DURATION OF COMPENSATION DEFERRAL ELECTION. An Eligible Employee's initial election to defer Base Salary must be filed on or before December 20 and is to be effective for the first day of the next following Plan Year. An Eligible Employee may renew, increase, decrease or terminate a deferral election with respect to Base Salary, Bonuses, Supplementary Retirement Plan Payments and/or Change of Control Payments for any subsequent Plan Year by filing a new election on or before December 20, which election shall be effective on the first day of the next following Plan Year. Any subsequent election with respect to Bonuses must be filed by December 20 of the year prior to the year in which the Bonuses are earned. An Eligible Employee's election with respect to Change of 3

Control Payments must be made on or before December 20 and shall be effective on the first day of the next following Plan Year. All elections under this Section 3.1 shall continue until changed in writing by the Eligible Individual, such change to be effective as of the first day of the next following Plan Year. In the case of an employee or director who becomes an Eligible Individual on or after January 1, such Eligible Individual shall have thirty (30) days from the date he or she has become an Eligible Individual to make an Initial Election with respect to amounts capable of being deferred under the Plan. Such election shall be for the remainder of the Plan Year. Notwithstanding the foregoing, the election under which a distribution under the Plan will be made must be in place at least twelve (12) months prior to receipt of the distribution or the immediately prior election option will prevail." 13. Article III, Section 3.2(b) is amended to read as follows: "(b) The Committee shall select from time to time, in its sole discretion, a commercially available investment fund of each of the types provided under the Plan to be the Funds. The Rate of Return of each such commercially available investment fund shall be used to determine the amount of earnings or losses to be credited to Participant's Account under Article IV." 14. Article IV, Section 4.2(c) is amended to read as follows: "(c) In the event a Participant elects that the Company Discretionary Contribution Amount for a given Plan Year have a Scheduled In-Service Withdrawal Date, all amounts attributed to the Company Discretionary Contribution Amount for such Plan Year shall be accounted for in a manner which allows separate accounting for the Company Discretionary Contribution Amount and investment gains and losses associated with such Plan Year's Company Discretionary Contribution Amount." 15. Article VI, Section 6.1(a) is amended to read as follows: "(a) DISTRIBUTION WITHOUT SCHEDULED IN-SERVICE WITHDRAWAL Date. In the case of a Participant who terminates employment due to a Change of Control Termination or Long Term Disability, or who terminates employment or service due to Retirement, the Distributable Amount shall be paid to the Participant (and after his or her death to his or her Beneficiary) in the form of substantially equal quarterly installments over fifteen (15) years beginning on his 4

or her Payment Date. Notwithstanding the foregoing, a Participant described in the preceding sentence may elect from among the following optional forms of benefit in accordance with the procedures set forth below: (1) A lump sum payment on the Participant's Payment Date; (2) Substantially equal quarterly installments over five (5) years beginning on the Participant's Payment Date; and (3) Substantially equal quarterly installments over ten (10) years beginning on the Participant's Payment Date; Elections regarding the form of distributions to be made following Retirement or Long Term Disability shall be made on a Retirement/Long Term Disability election form provided to the Company together with deferral elections made under the provisions of Article III (3.1) hereof, and may be changed or revoked at any time or from time to time, but in no event less than one year prior to the Participant's Retirement or Long Term Disability. The Committee may determine, from time to time, whether or not and on what terms and conditions elections regarding the form of distributions to be made following a Change of Control Termination may be made, and shall establish such forms and procedures for, and rules regarding changes and revocations of, such elections as the Committee shall from time to time determine to be appropriate. All elections under this Section 3.1 shall continue in effect unless and until a change or revocation thereof becomes effective in accordance with the foregoing. Notwithstanding any provision to the contrary, in the event a Participant's Distributable Amount is less than $25,000, such Distributable Amount shall be distributed to the Participant or his or her Beneficiary in a lump sum. In the event of termination of employment or service for any other reason, distribution to the Participant shall be made in a lump sum on his or her Payment Date. The Participant's Accounts shall continue to be credited with earnings pursuant to Section 4.1 of the Plan until all amounts credited to his or her Accounts under the Plan have been distributed." 5

16. The first sentence of Article VI, Section 6.1 (b) is amended to add the words "or service" after the word "employ". 17. The penultimate and last sentences in Article VI, Section 6.1(b) shall be amended to read: "The Participant shall have the right to twice modify any Plan Year's Scheduled In-Service Withdrawal Date. In the event a Participant terminates employment or service with the Company prior to a Scheduled In-Service Withdrawal Date, Section 6.1(a) will govern distributions under this Plan." 18. Article VI, Section 6.1(c) shall be amended to read as follows: "(c) DEATH BENEFIT. In the event a Participant dies after he or she has retired from the Company and still has a balance in his or her Account, the balance shall continue to be paid to the Participant's Beneficiary in quarterly installments for the remainder of the period as elected by the Participant. In the event a Participant dies while in the active employment or service of the Company, the Participant's Account balance, whether or not vested, will be paid in a lump sum to the Participant's Beneficiary." 19. Article VII, Section 7.3(8) shall be amended to read as follows: "(8) To take all actions necessary for the administration of the Plan, including determining the underlying funding instruments for benefits under the Plan." Pursuant to said authorization of the Board of Directors of Energy Group, I have executed this Amendment to the Directors and Executive Deferred Compensation Plan of Energy Group this 22nd day of June, 2001. 6

/S/ PAUL J. GANCI ----------------------------Paul J. Ganci Chairman of the Board and Chief Executive Officer

EXHIBIT (10)(iii)23 CH ENERGY GROUP SUPPLEMENTARY RETIREMENT PLAN (as amended and restated as of July 1, 2001)

APPENDIX A ARTICLE I. DEFINITIONS 1.01 "Beneficiary" shall mean the person(s) designated by the Participant entitled to receive benefits under the Plan after the death of a Participant. 1.02 "Pension Plan" shall mean the Retirement Income Plan of Central Hudson Gas & Electric Corporation, as from time to time amended. 1.03 "Central Hudson" shall mean Central Hudson Gas & Electric Corporation, a wholly-owned affiliate of Energy Group. 1.04 "Energy Group" shall mean CH Energy Group, Inc. 1.05 "Compensation" shall mean the annual base rate of renumeration in effect for a Participant, including any deferrals under any Energy Group and/or Central Hudson plan or arrangement with Energy Group which defers or avoids recognition of income under the Internal Revenue Code of 1986, as amended. 1.06 "Participant" shall mean, subject to Section 3.08, any full-time employee of Energy Group and/or Central Hudson who is holding any of the following officer positions with Energy Group or Central Hudson, subject to the right of Energy Group to reject him or her as a Participant: CENTRAL HUDSON OFFICERS Chairman of the Board and Chief Executive Officer President and Chief Operating Officer Vice President (including any level thereof) Secretary Chief Financial Officer Treasurer Controller Assistant Treasurer

ENERGY GROUP OFFICERS Chairman of the Board and Chief Executive Officer President Vice President (including any level thereof) Secretary Chief Financial Officer Treasurer Controller Assistant Treasurer Notwithstanding the foregoing, "Participant" shall also include any full time employee of any corporation which is within the "controlled group of corporations" (as referred to in Section 414(b) of the Internal Revenue Code of 1986, as amended) of which Energy Group is a member, provided such employee was holding any of the foregoing officer positions with Central Hudson on December 31, 2000, subject to the right of Energy Group to reject him or her as a Participant. 1.07 "Plan" shall mean the CH Energy Group, Inc. Supplementary Retirement Plan, as from time to time amended. 1.08 "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of Energy Group (the "Outstanding Energy Group Common Stock") or (y) the combined voting power of the then outstanding voting securities of Energy Group entitled to vote generally in the election of directors (the "Outstanding Energy Group Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Energy Group, (ii) any acquisition by Energy Group, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Energy Group or any corporation controlled by Energy Group or (iv) any acquisition by any corporation pursuant 2

to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 1.10; or (b) Individuals who, as of December 15, 1999, constitute the Board of Directors of Energy Group (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Energy Group's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board, shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Energy Group (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energy Group or all or substantially all of Energy Group's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energy Group or such corporation resulting from such Business Combination) beneficially owns, directly or 3

indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of Energy Group of a complete liquidation or dissolution of Energy Group. 1.09 "Deferred Compensation Plan" shall mean the Directors and Executives Deferred Compensation Plan of Energy Group as in effect from time to time. ARTICLE II. BENEFITS 2.01 BENEFITS TO PARTICIPANTS. If a Participant retires and at retirement has 10 years of service with Energy Group and/or Central Hudson or is age 65 or older, the Participant will be entitled to receive, as deferred compensation for his or her services prior to his or her retirement, an annual benefit for 10 years, payable in 120 approximately equal monthly amounts commencing with the first payment to such retiree under the Pension Plan; such benefit to be a percentage of the Participant's Compensation as follows:
Percentage of Compensation to Date of Retirement --------------------No Benefit 10% 15% 20%

Retirement Age -------------Under age 60 60, but less than 63 63, but less than 65 65 or over

2.02 BENEFICIARY PAYMENTS. Upon the death of a Participant on or after the date benefits are vested hereunder, the Beneficiary shall receive the remaining monthly 4

payments of benefits due under Section 2.01 above and, if no such Beneficiary is designated, the remaining unpaid benefits shall be paid to the Participant's estate. 2.03 VESTING. Participants shall be vested in the benefits described in Section 2.01 upon attainment of age 60 with at least 10 years of service with Energy Group and/or Central Hudson or attainment of age 65, subject, however, to the provisions of Sections 3.06 and 3.07. If a Participant terminates employment with Energy Group and/or Central Hudson prior to such vesting, the Participant shall not be entitled to any benefits under the Plan. 2.04 SPECIAL VESTING. Notwithstanding anything herein to the contrary, all Participants in the Plan who, on December 31, 1993, attained age 55 (but not age 60), regardless of their years of service with Central Hudson, shall be vested in the benefits described in Section 2.01 (and, thereupon, shall be eligible to receive such benefits on retirement) as if they had reached age 60 and had 10 years of service with Central Hudson as of December 31, 1993. 2.05 CHANGE OF CONTROL VESTING. Notwithstanding anything herein to the contrary, upon a Change of Control, all Participants in the Plan who have not then reached age 60 and 10 years of service with Energy Group and/or Central Hudson shall be vested in the benefits described in Section 2.01 (and, thereupon, shall be eligible to receive such benefits on retirement) as if they had reached age 60 and had 10 years of service with Energy Group and/or Central Hudson as of the date of the Change of Control. 2.06 DEFERRED PAYMENT. If a Participant has in effect an election to defer receipt of benefits under the Plan pursuant to the Deferred Compensation Plan, benefits, when payable under the Plan, shall not be paid to the Participant or the Participant's Beneficiary or estate, but shall be paid to the Deferred Compensation Plan pursuant to the provision of Article II hereof, and the Deferred Compensation Plan, in turn, shall pay such benefits so received to the Participant on a deferred basis pursuant to the provisions of the Deferred Compensation Plan. In the event that all or part of 5

payments under the Plan cannot be paid pursuant to the Deferred Compensation Plan, either because no such election is in effect or the provisions of the Deferred Compensation Plan do not permit such payments to be made, such payments shall be made to the Participant or the Participant's Beneficiary or estate pursuant to the Plan. ARTICLE III. ADMINISTRATION OF THE PLAN 3.01 ADMINISTRATOR. The Plan shall be administered by Energy Group, which shall have the authority to interpret the Plan and issue such regulations as it deems appropriate. Energy Group shall have the duty and responsibility of maintaining records, making the requisite calculations and causing disbursement of the payments hereunder. Energy Group's interpretations, determinations, regulations and calculations shall be final and binding on all persons and parties concerned. 3.02 AMENDMENT AND TERMINATION. Energy Group may amend or terminate the Plan at any time, provided, however, that no such amendment or termination shall deprive any Participant or beneficiary of the benefits vested hereunder as of the date of such amendment or termination. 3.03 NON-ASSIGNABILITY OF BENEFITS. The benefits payable hereunder or the right to receive future benefits under the Plan may not be anticipated, alienated, pledged, encumbered or subjected to any charge or legal process. 3.04 NON-GUARANTEE OF EMPLOYMENT. Nothing contained in this Plan shall be construed as a contract of employment between Energy Group and/or Central Hudson and any Participant, or as a right of any Participant to be continued in employment of Energy Group and/or Central Hudson, or as a limitation on the right of Energy Group and/or Central Hudson to discharge any of its employees, with or without cause. 3.05 APPLICABLE LAW. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the United States and to the extent not pre-empted by such laws, by the laws of the State of New York. 6

3.06 FORFEITURE PROVISIONS. All rights to any vested benefits payable under the Plan, including the payment of any unpaid benefit installments, shall be forfeited if any of the following events occur as may be applicable: a. If Energy Group or Central Hudson terminates the Participant for any cause. b. The Participant resigns (as opposed to retires) his or her office with both Energy Group and Central Hudson. c. The Participant, after retirement, breaches any fiduciary duty to Energy Group and/or Central Hudson or enters into competition with Energy Group and/or Central Hudson without its or their written permission. Notwithstanding the foregoing: (i) any termination of employment that gives rise to a right, on the part of a Participant, to severance pay or benefits under a Change of Control Employment Agreement between Energy Group or Central Hudson and the Participant shall be treated as a retirement rather than a resignation by the Participation or termination of the Participant by Energy Group or Central Hudson; and (ii) clause c. of the preceding sentence shall be inapplicable after a Change of Control. 3.07 INCAPABLE OF PERFORMING DUTIES. If at any time after a Participant reaches age 60, Energy Group or Central Hudson, as the case may be, determines, in its sole judgment, that the Participant is not fully capable of performing his or her duties, he or she will be entitled to the benefits vested under the Plan at the time of such determination. 3.08 OUTSIDE HIRES. If any officer of Energy Group or Central Hudson is hired directly into any position referred to in Section 1.05, from outside Energy Group or Central 7

Hudson, there shall be a one-year waiting period before he or she becomes eligible for participation in the Plan. 3.09 BENEFIT PAYMENTS. Energy Group will make all benefit payments under the Plan for Energy Group Participants and Central Hudson will make all payments under the Plan for Central Hudson Participants. No person, other than Energy Group or Central Hudson, shall have any obligation with respect to benefit payments or otherwise under the Plan. No funds or assets of Energy Group or Central Hudson will be segregated or physically set aside with respect to the Plan. 3.10 INTEREST IN PLAN. Neither a Participant nor a Beneficiary, where applicable, will have any interest in any specific asset of Energy Group or Central Hudson as a result of the Plan. Any right to receive benefits under the Plan will be only the right of an unsecured general creditor of Energy Group or Central Hudson. 3.11 LIFE INSURANCE POLICIES. Energy Group and/or Central Hudson may require each and any Participant to assist it in obtaining life insurance policies on the life of the Participant, which policies would be owned by and payable to Energy Group or Central Hudson, as the case may be. The Participant may be required to complete an application for life insurance, furnish underwriting information including medical examination by a life insurance company-approved examiner, and authorize release of medical history to the life insurance company's underwriter, as designated by Energy Group or Central Hudson, as the case may be. No election of Energy Group and/or Central Hudson to insure the life of any Participant shall give such Participant or any other person any right or interest either in or to any insurance contract or policy issued to Energy Group or Central Hudson or in or to any proceeds thereof. 3.12 APPLICABILITY TO CENTRAL HUDSON PARTICIPANTS. No Central Hudson employee can become a Participant until Central Hudson's Board of Directors authorizes Central Hudson's participation in the Plan. 8

EXHIBIT (10)(iii)24 AMENDMENT TO AND RESTATEMENT OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION RETIREMENT BENEFIT RESTORATION PLAN WHEREAS, Central Hudson Gas & Electric Corporation ("Central Hudson") established, effective March, 1992, its Retirement Benefit Restoration Plan which has been amended three times, the last such amendment being by instrument, executed June 23, 2000 (as so amended, the "Plan"), and WHEREAS, Central Hudson proposes further to amend the Plan in order to provide for the inclusion therein of certain officers of Central Hudson Energy Services, Inc., a subsidiary of CH Energy Group, Inc., the parent corporation of Central Hudson, and to make certain other administrative changes, and, as so amended, to restate the Plan, NOW, THEREFORE, Central Hudson hereby amends and, as so amended, restates the Plan, effective as of June 22, 2001, to read as set forth in Attachment A hereto. Pursuant to authorization of the Board of Directors of Central Hudson granted on August 6, 2001, I have executed this Amendment and Restatement instrument this 13th day of August, 2001.
/s/ PAUL J. GANCI ---------------------------------PAUL J. GANCI Chairman of the Board and Chief Executive Officer

ATTACHMENT A CENTRAL HUDSON GAS & ELECTRIC CORPORATION RETIREMENT BENEFIT RESTORATION PLAN AMENDED AND RESTATED AS OF JUNE 22, 2001

CENTRAL HUDSON GAS & ELECTRIC CORPORATION RETIREMENT BENEFIT RESTORATION PLAN AMENDED AND RESTATED AS OF JUNE 22, 2001 ARTICLE I. DEFINITIONS 1.01 "Act" shall mean the Employee Retirement Income Security Act of 1974 ("ERISA"), as from time to time amended. 1.02 "Pension Plan" shall mean the Retirement Income Plan of Central Hudson Gas & Electric Corporation, as from time to time amended. 1.03 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. 1.04 "Central Hudson" shall mean Central Hudson Gas & Electric Corporation. 1.05 "Effective Date" shall mean May 1, 1993. 1.06 "Maximum Benefit" shall mean the benefit or benefits to be paid a Participant under the Pension Plan. 1.07 "Participant" shall mean any employee of Central Hudson, Energy Group, or CH Services who is an active Member in the Pension Plan on or after the Effective Date, whose pension benefits determined on the basis of the provisions of the Pension Plan, without regard to the limitations imposed by Code Sections 401(a)(17) and 415, would exceed the Maximum Benefit, and who holds any of the following officer positions with either Central Hudson, Energy Group or CH Services: 1

CENTRAL HUDSON OFFICERS Chairman of the Board and Chief Executive Officer President and Chief Operating Officer Vice President (including any level thereof) Secretary Chief Financial Officer Treasurer Controller Assistant Treasurer ENERGY GROUP OFFICERS Chairman of the Board and Chief Executive Officer President Vice President (including any level thereof) Secretary Chief Financial Officer Treasurer Controller Assistant Treasurer CH SERVICES OFFICERS Chairman of the Board and Chief Executive Officer President and Chief Operating Officer Vice President (including any level thereof) Secretary Chief Financial Officer Treasurer Controller Assistant Treasurer 1.08 "Plan" shall mean the Central Hudson Retirement Benefit Restoration Plan, as from time to time amended, which shall be an unfunded and uninsured pension benefit plan for a select group of highly compensated management employees of Central Hudson, Energy Group or CH Services. 1.09 "Unrestricted Benefit" shall mean whichever of the following is applicable: (i) the monthly retirement income benefit under the Pension Plan ("Retirement Income Benefit") and (ii) the benefit under the Cash Balance Account ("Cash Balance Benefit") of the Pension Plan, all 2

determined under the Pension Plan without regard to the limitations imposed by Code Sections 401(a)(17) and 415. 1.10 "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a "Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (x) the then outstanding shares of common stock of Energy Group (the "Outstanding Energy Group Common Stock") or (y) the combined voting power of the then outstanding voting securities of Energy Group entitled to vote generally in the election of directors (the "Outstanding Energy Group Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Energy Group, (ii) any acquisition by Energy Group, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Energy Group or any corporation controlled by Energy Group or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 1.10; or (b) Individuals who, as of December 15, 1999, constitute the Board of Directors of Energy Group (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Energy Group's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 3

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Energy Group (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns Energy Group or all or substantially all of Energy Group's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Energy Group Common Stock and Outstanding Energy Group Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of Energy Group or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of Energy Group of a complete liquidation or dissolution of Energy Group. 1.11 "Employment Agreement" shall mean a Change of Control Employment Agreement between a Participant and Energy Group. 4

1.12 "Energy Group" shall mean CH Energy Group, Inc., the parent corporation of Central Hudson. 1.13 "CH Services" shall mean Central Hudson Energy Services, Inc. ARTICLE II. BENEFITS 2.01 "Benefit": Upon the applicable Retirement Date (as defined under the Pension Plan) of a Participant, such Participant shall be entitled to (i) a Retirement Income Benefit and, if applicable, (ii) a Cash Balance Benefit, equal, in each case, in amount to his or her Unrestricted Benefit less the Maximum Benefit. 2.02 "Spouse's Pension Benefit": Subject to Section 2.03 below, upon the death of a Participant whose spouse is eligible for an annuity under the Pension Plan, the Participant's surviving spouse shall be entitled to (i) a monthly benefit equal to the surviving spouse benefit annually determined in accordance with the provisions of the Pension Plan without regard to any limitations imposed by the Code Sections 401(a)(17) and 415, less the related Maximum Benefit to which such spouse is entitled and (ii) any Cash Balance Benefit determined in accordance with the provisions of the Pension Plan without regard to any limitations imposed by Code Sections 401(a)(17) and 415, less the related Maximum Benefit to which such spouse is entitled and less any amount of the Cash Balance Benefit previously paid to the Participant. 2.03 "Forms of Benefit Payment": A retirement benefit payable under this Article II shall be paid at such time or times in such form and in the same manner as the benefit payable under the Pension Plan, except a Cash Balance Benefit shall be paid in lump sum form only. 2.04 "Change-of-Control Benefit": Notwithstanding any other provision of the Plan, if a Participant's employment is terminated under circumstances entitling him or her to severance pay or benefits under an Employment Agreement that becomes effective as a result of the Change of Control, the amount (but not the time for payment) of the Unrestricted Benefit shall be computed as if the Participant's employment had continued for a number of years equal to the Multiple (as defined in such Employment Agreement), with compensation equal to the 5

compensation required by the Employment Agreement, and as if the Participant's accrued benefits were fully vested even if they are not then fully vested. ARTICLE III. ADMINISTRATION OF THE PLAN 3.01 "Administrator": The Plan shall be administered by Central Hudson, which shall have the authority to interpret the Plan and issue such proceedings as it deems appropriate. The Administrator shall have the duty and responsibility of maintaining records, making the requisite calculations and disbursing the payments hereunder. The Administrator's interpretations, determinations, regulations and calculations shall be final and binding on all persons and parties concerned. 3.02 "Amendment and Termination": The Administrator may amend or terminate the Plan at any time, provided, however, that no such amendment or termination shall deprive any Participant or beneficiary of the benefits to which such Participant is entitled, under Section 2.01 hereof, as of the date of such amendment or termination unless the Participant or beneficiary becomes entitled to an amount equal to such benefit under another plan or practice adopted by Central Hudson. Notwithstanding the foregoing, for three years following a Change-ofControl: (a) the Plan may not be amended in any manner adverse to any individual who is a Participant in the Plan immediately before the Change-of-Control (a "Protected Participant"), or a beneficiary of a Protected Participant; and (b) the Plan may not be terminated with respect to Protected Participants and their beneficiaries. 3.03 "Payments": Central Hudson will pay all benefits arising under this Plan and all costs, charges and expenses relating thereto. 3.04 "Non-assignability of Benefits": Except as otherwise permitted or required by law, the benefits payable hereunder or the right to receive future benefits under the Plan may not be anticipated, alienated, pledged, encumbered, or subjected to any charge or legal process, and if any attempt is made to do so, or a person eligible for any benefits becomes bankrupt, the interest under the Plan of the person affected may be terminated by the Administrator which, in its sole 6

discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such benefits that it deems appropriate. 3.05 "Status of Plan": The benefits under this Plan shall not be funded, but shall constitute liabilities of Central Hudson payable when due. 3.06 "Nonguarantee of Employment": Nothing contained in this Plan shall be construed as a contract of employment between Central Hudson and any Participant, or as a right of any Participant to be continued in employment of Central Hudson, or as a limitation on the right of Central Hudson to discharge any of its employees, with or without cause. 3.07 "Applicable Law": All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the United States and to the extent not pre-empted by such laws, by the laws of the State of New York. 3.08 "Inclusion of Energy Group and CH Services Participants": This Plan shall only apply to Energy Group and CH Services Participants if adopted by each of the respective Boards of Directors of each corporation.

CH ENERGY GROUP, INC. COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT (12)(i)
2001 Year Ended ------------------------- -------------------3 Months 12 Months Ended Ended Dec 31 Dec 31 2000 1999 ------------------- ---------- --------A. B. C. D. Earnings: Net Income Federal and State Income Tax Earnings before Income Taxes Fixed Charges Interest on Mortgage Bonds Interest on Other Long-Term Debt Other Interest Interest Portion of Rents Amortization of Premium & Expense on Debt Preferred Stock Dividends of Central Hudson Total Fixed Charges $19,761 (22,981) ---------($3,220) ========== 670 1,798 3,049 193 335 (95) ---------$5,950 ========== $2,730 ========== $50,835 $50,973 (3,338) 38,215 ---------- ---------$47,497 $89,188 ========== ========== 5,211 10,446 14,187 801 1,350 3,026 ---------$35,021 ========== $82,518 ========== 11,342 12,864 10,473 962 1,170 5,556 ---------$42,367 ========== $131,555 ========== $48,57 28,92 --------$77,49 ========= 13,05 11,09 4,86 99 99 5,07 --------$36,07 ========= $113,57 =========

E.

Total Earnings

F. G. H. I.

Preferred Dividend Requirements: Allowance for Preferred Stock Dividends Under IRC Sec 247 Less Allowable Dividend Deduction Net Subject to Gross-up Ratio of Earnings before Income Taxes to Net Income (C/A) Preferred Dividend (Pre-tax) (H x I) Plus Allowable Dividend Deduction Preferred Dividend Factor

$807 (31) ---------776 (0.163) ---------(126) 31 ---------(95) ========== 0.46 ==========

$3,230 $3,230 $3,23 (127) (127) (12 ---------- ---------- --------3,103 3,103 3,10 0.934 ---------2,899 127 ---------3,026 ========== 2.36 ========== 1.750 ---------5,429 127 ---------5,556 ========== 3.11 ========== 1.59 --------4,95 12 --------5,07 ========= 3.1 =========

J. K. L.

M.

Ratio of Earnings to Fixed Charges

(E/D)

( * ) CH Energy Group, Inc. was formed on Dec. 15, 1999. Prior Periods have been restated to reflect preferred stock dividends as a component of fixed charges.

CENTRAL HUDSON GAS & ELECTRIC CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT (12)(ii) AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
2001 -----------------------3 Months 12 Months Ended Ended Dec 31 Dec 31 ------------------A. B. C. D. Earnings: Net Income Federal & State Income Tax Earnings before Income Taxes Fixed Charges Interest on Mortgage Bonds Interest on Other Long-Term Debt Other Interest Interest Portion of Rents Amortization of Premium & Expense on Debt Total Fixed Charges 670 1,798 3,052 193 335 ---------$6,048 ========== $456 ========== 5,211 10,446 13,170 801 1,350 ---------$30,978 ========== $67,519 ========== 11,342 12,864 5,363 962 1,170 ---------$31,701 ========== $121,446 ========== 13,057 11,094 4,860 993 993 ---------$30,997 ========== $111,022 ========== $18,584 (24,176) ---------($5,592) ========== Year Ended D ----------------------

2000 ----------

1999 ---------$51,881 28,144 ---------$80,025 ==========

$44,178 $52,595 (7,637) 37,150 ---------- ---------$36,541 $89,745 ========== ==========

E.

Total Earnings

F. G. H. I.

Preferred Dividend Requirements: Allowance for Preferred Stock Dividends Under IRC Sec 247 Less Allowable Dividend Deduction Net Subject to Gross-up Ratio of Earnings before Income Taxes to Net Income (C/A) Pref. Dividend (Pre-tax) (H x L) Plus Allowable Dividend Deduction Preferred Dividend Factor Fixed Charges (D) Total Fixed Charges and Preferred Dividends

$807 (31) ---------776 (0.301) ---------(234) 31 ---------(203) 6,048 ---------$5,845 ========== 0.08 ========== 0.08 ==========

$3,230 $3,230 $3,230 (127) (127) (127 ---------- ---------- ---------3,103 3,103 3,103 0.827 ---------2,566 127 ---------2,693 30,978 ---------$33,671 ========== 2.18 ========== 2.01 ========== 1.706 ---------5,294 127 ---------5,421 31,701 ---------$37,122 ========== 3.83 ========== 3.27 ========== 1.542 ---------4,785 127 ---------4,912 30,997 ---------$35,909 ========== 3.58 ========== 3.09 ==========

J. K. L. M. N.

O. P.

Ratio of Earnings to Fixed Charges (E/D) Ratio of Earnings to Fixed Charges and Preferred Dividends (E/N)

* ) Restated to properly reflect the exclusion of AFUDC from fixed charges.

EXHIBIT (23) CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in (i) the Prospectus constituting part of the Registration Statement, on Form S-3 (Registration No. 333-11521-99), relating to CH Energy Group, Inc.'s Stock Purchase Plan, and (ii) Part II of the Registration Statement, on Form S-8 (Registration No. 333-46528), relating to CH Energy Group, Inc.'s Long-Term Performance-Based Incentive Plan, of our report dated January 25, 2002 appearing in this Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the incorporation by reference of our reported dated January 25, 2002 relating to the financial statement schedule that appears in such Annual Report on Form 10-K.
/S/ PRICEWATERHOUSECOOPERS LLP New York, New York January 25, 2002

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, PAUL J. GANCI, Chairman of the Board and Chief Executive Officer, a Principal Executive Officer and a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, DONNA S. DOYLE AND STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS February, 2002. WHEREOF, I have set my hand and seal this 1st day of

/s/ PAUL J. GANCI L.S. ----------------------------STATE OF NEW YORK ) : ss.: COUNTY OF DUTCHESS )

On this 1st day of February, 2002, before me personally came PAUL J. GANCI to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, JOHN E. MACK III, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 1st day of February, 2002.
/s/ JOHN E. MACK III L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 1st day of February, 2002, before me personally came JOHN E. MACK III to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, JACK EFFRON, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS February, 2002. WHEREOF, I have set my hand and seal this 1st day of

/s/ JACK EFFRON L.S. ----------------------------STATE OF NEW YORK ) : ss.: COUNTY OF DUTCHESS )

On this 1st day of February, 2002, before me personally came JACK EFFRON to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, HEINZ K. FRIDRICH, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 1st day of February, 2002.
/s/ HEINZ K. FRIDRICH L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 1st day of February, 2002, before me personally came HEINZ K. FRIDRICH to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, EDWARD F. X. GALLAGHER, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 1st day of February, 2002.
/s/ EDWARD F. X. GALLAGHER L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 1st day of February, 2002, before me personally came EDWARD F. X. GALLAGHER to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, FRANCES D. FERGUSSON, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 1st day of February, 2002.
/s/ FRANCES D. FERGUSSON L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 1st day of February, 2002, before me personally came FRANCES D. FERGUSSON to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that she executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, STANLEY J. GRUBEL, a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS February, 2002. WHEREOF, I have set my hand and seal this 1st day of

/s/ STANLEY J. GRUBEL L.S. ----------------------------STATE OF NEW YORK ) : ss.: COUNTY OF DUTCHESS )

On this 1st day of February, 2002, before me personally came STANLEY J. GRUBEL to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that she executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, DONNA S. DOYLE, Vice President - Accounting and Controller, a Principal Accounting Officer of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI AND STEVEN V. LANT, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS February, 2002. WHEREOF, I have set my hand and seal this 1st day of

/s/ DONNA S. DOYLE L.S. ----------------------------STATE OF NEW YORK ) : ss.: COUNTY OF DUTCHESS )

On this 1st day of February, 2002, before me personally came DONNA S. DOYLE to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that she executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, STEVEN V. LANT, Chief Operating Officer and Chief Financial Officer, a Principal Financial Officer and a Director of CH Energy Group, Inc. ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS February, 2002. WHEREOF, I have set my hand and seal this 1st day of

/s/ STEVEN V. LANT L.S. -----------------------------

STATE OF NEW YORK

) : ss.: COUNTY OF DUTCHESS )

On this 1st day of February, 2002, before me personally came STEVEN V. LANT to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, PAUL J. GANCI, Chairman of the Board and Chief Executive Officer, a Principal Executive Officer and a Director of Central Hudson Gas & Electric Corporation ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, DONNA S. DOYLE , STEVEN V. LANT, AND JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, as combined with the Annual Report on Form 10-K, for the year ended December 31, 2001 of CH Energy Group, Inc., the parent corporation, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS January, 2002. WHEREOF, I have set my hand and seal this 18th day of

/s/ PAUL J. GANCI --------------------------------STATE OF NEW YORK COUNTY OF DUTCHESS ) : ss.: )

L.S.

On this 18th day of January, 2002, before me personally came PAUL J. GANCI to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M.GIAMETTA --------------------------------Notary Public

EXHIBIT (24)(i)2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, STEVEN V. LANT, Chief Financial Officer, a Principal Executive Officer and a Director of Central Hudson Gas & Electric Corporation ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE AND JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, as combined with the Annual Report on Form 10-K, for the year ended December 31, 2001 of CH Energy Group, Inc., the parent corporation, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 18th day of January, 2002.
/s/ STEVEN V. LANT III L.S. -----------------------------

STATE OF NEW YORK ) : ss.: COUNTY OF DUTCHESS ) On this 18th day of January, 2002, before me personally came STEVEN V. LANT to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, CARL E. MEYER, President and Chief Operating Officer, a Principal Executive Officer and a Director of Central Hudson Gas & Electric Corporation ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, AND JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, as combined with the Annual Report on Form 10-K, for the year ended December 31, 2001 of CH Energy Group, Inc., the parent corporation, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS January, 2002. WHEREOF, I have set my hand and seal this 18th day of

/s/ CARL E. MEYER L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 18th day of January, 2002, before me personally came CARL E. MEYER to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, ARTHUR R. UPRIGHT, Senior Vice President-Regulatory Affairs, Financial Planning and Accounting, a Principal Executive Officer and a Director of Central Hudson Gas & Electric Corporation ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, DONNA S. DOYLE, STEVEN V. LANT, AND JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10K, for the year ended December 31, 2001, with the Securities and Exchange Commission, as combined with the Annual Report on Form 10-K, for the year ended December 31, 2001 of CH Energy Group, Inc., the parent corporation, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have set my hand and seal this 18th day of January, 2002.
/s/ ARTHUR R. UPRIGHT L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 18th day of January, 2002, before me personally came ARTHUR R. UPRIGHT to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (24)(i)2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, DONNA S. DOYLE, Vice PresidentAccounting and Controller, a Principal Executive Officer of Central Hudson Gas & Electric Corporation ("Corporation"), have made, constituted and appointed, and by these presents do make, constitute and appoint, PAUL J. GANCI, STEVEN V. LANT, AND JOHN E. GOULD, and each of them, my true and lawful attorneys, for me and in my name, place and stead, and in my office and capacity as aforesaid, to sign and file the Corporation's Annual Report, on Form 10-K, for the year ended December 31, 2001, with the Securities and Exchange Commission, as combined with the Annual Report on Form 10-K, for the year ended December 31, 2001 of CH Energy Group, Inc., the parent corporation, pursuant to the applicable provisions of the Securities Exchange Act of 1934, together with any and all amendments and supplements to said Annual Report and any and all other documents to be signed and filed with the Securities and Exchange Commission in connection therewith, hereby granting to said attorneys, and each of them, full power and authority to do and perform each and every act and thing whatsoever requisite and necessary to be done in the premises as fully, to all intents and purposes, as I might or could do if personally present, hereby ratifying and confirming in all respects all that said attorneys or any of them may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS January, 2002. WHEREOF, I have set my hand and seal this 18th day of

/s/ DONNA S. DOYLE L.S. ----------------------------) : ss.: COUNTY OF DUTCHESS ) STATE OF NEW YORK

On this 18th day of January, 2002, before me personally came DONNA S. DOYLE to me known and known to me to be the individual described in and who executed the foregoing instrument, and duly acknowledged to me that he executed the same.
/s/ DONNA M. GIAMETTA ----------------------------Notary Public

EXHIBIT (99)(i)7 STATE OF NEW YORK PUBLIC SERVICE COMMISSION At a session of the Public Service Commission held in the City of Albany on October 24, 2001 COMMISSIONERS PRESENT: Maureen O. Helmer, Chairman Thomas J. Dunleavy James D. Bennett Leonard A. Weiss Neal N. Galvin CASE 01-E-00ll - Joint Petition of Niagara Mohawk Power Corporation, New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, Central Hudson Gas & Electric Corporation, Constellation Nuclear, LLC and Nine Mile Point Nuclear Station, LLC for Authority Under Public Service Law Section 70 to Transfer Certain Generating and Related Assets and for Related Approvals. ORDER AUTHORIZING ASSET TRANSFERS (Issued and Effective October 26, 2001) BY THE COMMISSION: INTRODUCTION On January 31, 2001, Niagara Mohawk Power Corporation (Niagara Mohawk), Rochester Gas and Electric Corporation (RG&E), Central Hudson Gas & Electric Corporation (Central Hudson) and New York State Electric & Gas Corporation (NYSEG) submitted, pursuant to Public Service Law (PSL) ss.70, a Joint Petition seeking authority to transfer their respective interests in the Nine Mile Point Nuclear Generating Station to Constellation 1

Nuclear, LLC and Nine Mile Point Nuclear Station, LLC (together Constellation).(1) The Administrative Law Judge assigned to this case conducted conferences on January 17 in anticipation of the Joint Petition and on February 14, 2001.(2) Thereafter, the Judge required the parties to file comments or testimony concerning the proposed sale and the ratemaking for the gain or loss on the transaction.(3) On or about April 13, 2001 six parties filed either comments or testimony: Department of Public Service Staff, the State Attorney General's Office, the International Brotherhood of Electrical Workers - Local 97, Nucor Steel Auburn, Inc., RG&E, (1) Niagara Mohawk owns Nine Mile Unit 1 and 41% of Nine Mile Unit 2. NYSEG owns 18% of Nine Mile 2, RG&E owns 14%, and Central Hudson has 9%. The remainder belongs to the Long Island Power Authority. LIPA is not selling its interest at this time. (2) Additional conferences were held on May 15 and September 14,2001. An evidentiary hearing was scheduled to begin on September 25, 2001; however, it was cancelled when the last Joint Proposal was executed. (3) The Joint Petition contained supporting affidavits and prefiled testimony from Constellation, Niagara Mohawk and the other Nine Mile 2 cotenants. This permitted the Judge to solicit other parties' positions early in the proceeding. 2

and Mr. John Mavretich.(4) On or about May 11, 2001, NYSEG, RG&E, Central Hudson, Niagara Mohawk and IBEW Local 97 responded to the April 13 submissions. In accordance with 16 NYCRR 3.9, the petitioners notified the active parties and other interested persons of the settlement conferences being conducted in this case. The conferences began in March 2001 and continued throughout the proceeding. As a result, each petitioner has executed a Joint Proposal with Staff. The State Consumer Protection Board has also entered into the Joint Proposals. Niagara Mohawk filed its Joint Proposal on May 7, 2001 and Multiple Intervenors joined in it. If we adopt its terms, the Joint Proposal would resolve all matters pertaining to Niagara Mohawk. RG&E filed next on August 9, 2001. Like the first one, RG&E's Joint Proposal seeks to resolve all matters related to the sale of the Nine Mile facilities and the recovery of the company's costs. Central Hudson filed on September 19, 2001. This proposal also seeks to resolve matters related to the sale and other matters that could have been raised in this proceeding. On September 20, 2001, Constellation and Staff submitted a Joint Proposal that addresses decommissioning trust fund matters. Finally, on September 27, 2001, NYSEG filed a Joint Proposal like the other cotenants' proposals that would resolve all the company's issues related to Nine Mile. By notices issued on September 18 and 28, 2001, we provided the public and interested parties an opportunity to comment on the cotenants' and Constellation's Joint Proposals. (4) Mr. Mavretich appeared in this proceeding on behalf of Congressman Maurice D. Hinchey. 3

Comments and responses were received from the State Attorney General's Office, Mr. Mavretich, IBEW Local 97, Nucor Steel Auburn, Inc., Niagara Mohawk, Central Hudson, RG&E, NYSEG, Constellation and Staff. THE JOINT PETITION Niagara Mohawk proposes to sell Nine Mile 1 to Constellation for $234 million subject to various specified price adjustments. Niagara Mohawk and the other utility company cotenants propose to sell their 82% interest in Nine Mile Unit 2 to Constellation for $581 million, also subject to price adjustments.(5) Half the purchase price is payable at the closing; the other half will be paid in five annual installments with interest. The real, personal and intangible property included in the sales is specified in the December 11, 2000 Asset Purchase Agreements.(6) Constellation will assume various liabilities and obligations for the fuel the units consume; the storage and disposal of spent nuclear fuel; high-level and low-level waste; environmental liabilities; and, for injury and damage to persons or property. Constellation will also be responsible for decommissioning the Nine Mile units. The cotenants will transfer their decommissioning funds to Constellation at the closing and (5) Adjustments will be made to the base purchase price for the actual closing date for the sale, human resource payments, capital additions and replacements, low-level waste disposal costs, the continuation of the facilities' NRC licenses, and uranium enrichment/fabrication costs. (6) The property includes: spent nuclear fuel, high-level and low-level waste, and fuel-related inventory; machinery and equipment; transferable agreements, contracts and permits; books and records; and, unexpired warranties and guarantees from third parties. 4

adjustments will be made for any over- or under-funding as necessary. Constellation has offered to employ the 1,337 employees who currently work at the Nine Mile facilities. It will also assume the collective bargaining agreement that exists between Niagara Mohawk and IBEW Local 97. Employees who transfer to Constellation will retain their seniority and receive full credit for their service with Niagara Mohawk. Niagara Mohawk and Constellation have entered into a Nine Mile 1 Power Purchase Agreement (PPA). The PPA would run to August 22, 2009, concurrent with the facility's NRC operating license. The cotenants and Constellation have also entered into Nine Mile 2 Power Purchase Agreements for ten years. Pursuant to the PPAs, Constellation will sell to the utility companies 90% of the capacity and electric output from the generating units. The parties have agreed to monthly base prices, differentiated between on-peak and off-peak periods. When the PPAs expire, the utility companies will have no further right or obligation to purchase any output from the Nine Mile units. In connection with Nine Mile 2, the cotenants have entered into ten-year Revenue Sharing Agreements (RSAs). The RSAs provide the utility companies 80% of the amount by which actual market prices exceed a specific schedule of floor prices. Any such amounts will be credited to the utility companies. In a related matter, RG&E, Central Hudson and the Long Island Power Authority (LIPA) are selling their Nine Mile 2 transmission facilities to Niagara Mohawk at their net book value.(7) Niagara Mohawk will also enter into an agreement with NYSEG to operate and maintain NYSEG's 18% interest in the Nine (7) This transaction concerns the Scriba Substation, a tract of land encompassing the substation, and certain transmission lines that connect Nine Mile 2 to Niagara Mohawk's transmission system. 5

Mile 2 transmission facilities. Niagara Mohawk will provide Constellation interconnection service and off-site services for Nine Mile 2 until they mutually agree to terminate this arrangement. Niagara Mohawk will retain ownership of the Nine Mile 1 interconnection facilities and provide Constellation interconnection service and off-site services for this unit until they agree to end the arrangement. The Nine Mile 2 cotenants (including LIPA) have entered into a Cotenant Agreement that addresses the materials and supply inventory, nuclear insurance matters, and the accounting for employee pension and retirement benefits. This agreement requires them to share Nine Mile 2 costs and benefits to the time of the closing and as necessary to wind down the cotenancy. They will share the cost of certain employee retention, incentive and severance payments. The selling cotenants have also entered into a Selling Cotenants Agreement that specifies the closing and transaction costs they will and will not share. This agreement also addresses the transfer of decommissioning funds to Constellation, and the regulatory treatment for the Nine Mile 2 material and supplies inventory. The petitioners have also entered into Reciprocal Easement Agreements that provide the owners of the generation and transmission rights access to certain facilities after the sale. Niagara Mohawk may also provide Constellation services after the closing pursuant to a Service Agreement. Finally, the Town of Scriba entered into a Memorandum Of Understanding (MOU) with the cotenants that addresses property taxes, special assessments, and other levies applicable to the Nine Mile facilities. The MOU provides a gradual tax reduction over five years and stable taxes thereafter. Over a ten-year period, taxes are expected to be $125 million less than past 6

amounts. Constellation has agreed to accept the MOU. THE JOINT PROPOSALS NIAGARA MOHAWK The Niagara Mohawk Joint Proposal (NMJP) addresses the sale of the Nine Mile 1 and 2 facilities and the recovery of the company's costs. Among other things, it covers: operating practices, budgets, expenses, capital costs, inventories, material and supplies, investment tax credits, excess deferred federal income taxes, plant valuations, ratepayer benefits, costs and benefits realized after the closing, nuclear insurance matters and stranded costs. The Joint Proposal does not limit Staff's right to audit the final transaction costs (and adjustments) for the sales. In general, the NMJP adopts the accounting and ratemaking methods presented by two company witnesses in prefiled testimony that accompanied the Joint Petition.(8) The NMJP reduces Niagara Mohawk's unamortized investment in the Nine Mile units by $123 million before the company is permitted to record a regulatory asset for the remainder. Until the Commission addresses Niagara Mohawk's rates, the NMJP requires the company to record (in a memorandum account) the amortization, variations and adjustments to the nuclear regulatory asset in accordance with its terms. The NMJP applies the same rate of return to the nuclear regulatory asset as applies to Niagara Mohawk's transmission and distribution assets. The next time the Commission sets the (8) The NMJP incorporates the joint testimony of Messrs. Steven W. Tasker and Dennis B. Schafer. While this testimony supported an amortization period for the nuclear regulatory asset balance not to exceed ten years, the NMJP recognizes adjustments to the nuclear regulatory asset balance that can either shorten the amortization period or extend it beyond ten years. 7

company's rates, Niagara Mohawk will continue to seek to earn the same return on the regulatory asset as applies to the transmission and distribution assets. The NMJP applies the entire purchase price to the ratepayers' benefit as of the closing and it does not wait for Constellation to pay the second half over five years. For this reason, the NMJP permits Niagara Mohawk to retain the interest payments and any prepayments Constellation makes. With respect to nuclear insurance matters, the NMJP requires Niagara Mohawk to pass to ratepayers any future distributions from the Nuclear Electric Insurance Limited (NEIL) related to the premiums it paid to ensure eligibility for future distributions. If and when Niagara Mohawk accesses or converts its nuclear insurance rights into an asset, it will flow them to ratepayers. ROCHESTER GAS & ELECTRIC The terms of the RG&E Joint Proposal (RJP) resolve all matters related to the sale of the company's interest in Nine Mile 2 and the recovery of its costs. The RJP preserves Staff's right to audit the final transaction costs and adjustments. Among other things, the RJP addresses: the auction, operating practices, budgets, expenses, capital costs, inventories, Nine Mile 2 revenue requirements, capacity and energy forecasts used to purchase electricity from Constellation, replacement power costs, transaction costs incurred in this and another proceeding, RG&E's right of first refusal, the company's Advantage New York proposal, pension and retirement benefits, investment tax credits, excess deferred federal income taxes, RG&E's Exit Agreement with Niagara Mohawk, decommissioning costs, Nine Mile 2 valuation, ratepayer benefits, costs and benefits realized after the closing, nuclear insurance matters and regulatory asset recovery, including the rate of return on and 8

the risks associated with the regulatory asset. The RJP adopts the accounting and ratemaking methods presented by two company witnesses in affidavits and testimony accompanying the Joint Petition.(9) It allows RG&E to establish a $329.5 million regulatory asset when Nine Mile 2 is sold. Thereafter, the company would write off and reduce his amount by $20 million. The company would record its amortization, variations and adjustments to the Nine Mile 2 regulatory asset in a specified account in accordance with the terms of the Joint Proposal. The regulatory asset would earn an 11.5% return until the next time RG&E's electric rates are set. RG&E will seek to have the return on the regulatory asset set the same as its electric utility business. Ratepayers would obtain the full benefits of the purchase price RG&E receives from Constellation from the start. Consequently, the company would keep the interest payments and any prepayments it receives from Constellation. Any Nuclear Electric Insurance Limited (NEIL) distributions RG&E receives for Nine Mile 2 would be flowed to customers, as would any portion of the asset rights that convert to the company. CENTRAL HUDSON The Central Hudson Joint Proposal (CHJP) resolves all Nine Mile 2 matters that could have been raised in this case and it does not limit Staff's rights to audit the final transaction costs. The matters covered by the CHJP include: the auction, operating practices, budgets, expenses, capital costs, inventories, transaction costs for this and another proceeding, retirement and pension benefits, investment tax credits, excess deferred federal income taxes, decommissioning costs, Nine Mile 2 valuation, ratepayer benefits, costs and benefits realized after the closing, nuclear insurance costs, federal tax and auction (9) The RJP incorporates the affidavits and testimony of Messrs. James J. Fletcher and Joseph J. Syta. 9

incentives related to the Danskammer and Roseton Generating Stations that Central Hudson has sold. The CHJP incorporates the accounting and ratemaking methods a company witness presented in testimony filed with the Joint Petition.(10) The CHJP requires Central Hudson to use the Nine Mile purchase price (net of adjustments, offsets, and expenses) to benefit ratepayers. It also requires the company to provide another $19 million to benefit ratepayers. The CHJP allows the company to keep the interest payments and any prepayments Constellation provides. All future NEIL distributions will flow to ratepayers, as would any rights that convert to Central Hudson. NEW YORK STATE ELECTRIC & GAS The NYSEG Joint Proposal (NYJP) resolves all matters pertaining to Nine Mile 2, including cost recovery. Like the other Joint Proposals, it does not limit Staff's right to audit the final transaction costs and adjustments. Among other things, it covers: the transfer of NYSEG's interest, rate and accounting issues (other than complete disposition of the Nine Mile 2 gain), compliance with the April 25, 2000 order in Case 99-E-0933, compliance with the Price Cap Plan authorized by Opinion No. 98-6, auction results, operating practices, budgets, expenses, capital costs, inventories, transactions costs incurred in this proceeding and in other efforts to sell or transfer Nine Mile 2, pension and retirement benefits, investment tax credits, excess deferred federal income taxes, decommissioning costs, plant valuation, ratepayer benefits, costs and benefits realized after the closing, nuclear insurance matters, and the use of the sale proceeds. NYSEG has agreed to establish an Asset Sale Gain Account (ASGA) for the $113 million it expects to receive for its interest in Nine Mile 2. The ASGA will accrue interest and be (10) It incorporates Mr. Arthur R. Upright's testimony. 10

used by the Commission for financially responsible purposes. One year after it establishes the ASGA, NYSEG will begin to place $1.78 million in the account monthly until new electric rates supercede the prevailing Price Cap Plan. NYSEG will retain the interest payments it obtains from Constellation. Ratepayers will receive all future NEIL distributions and any rights that convert to NYSEG. CONSTELLATION The Constellation Joint Proposal (CJP) resolves certain issues Staff raised concerning the disposition of the decommissioning trust funds. It amends the Nine Mile 1 and 2 Asset Purchase Agreements consistent with the prefiled testimony Staff submitted in this case. The sellers agree with the proposed amendments. In sum, the CJP retains Constellation's commitment to make payments to the sellers should it realize unanticipated gains due to any delay in the decommissioning schedules for the facilities. Rather than establish fixed payment amounts for events not expected to occur for many years, the CJP provides an approach that does not create any improper incentives concerning plant decommissioning activity. It is similar to the one Consolidated Edison and Entergy used for the sale of the Indian Point generating facilities. Should decommissioning not occur at the end of the facilities' operating lives, half of any excess decommissioning trust funds will flow to ratepayers. SUPPORT FOR THE SALE In support of the sale, the Joint Petition acknowledges that the divestiture of utility-owned generation facilities furthers electric industry restructuring and fosters a competitive marketplace in New York. The cotenants maintain that the proposed sale aptly responds to our request that they establish the value of the Nine Mile facilities through an open market process. They point out that experienced managers were used to conduct an auction open to all licensed operators of 11

nuclear power plants. The petitioners observe that each utility company will continue their transmission and distribution businesses without impairment and they will remain subject to Commission jurisdiction. Constellation will become an electric company in New York subject to Public Service Law requirements.(11) (11) Constellation has petitioned for lightened regulation in Case 0l-E-0349. An order in that case is being issued today. 12

The Joint Petition lists Constellation's qualifications to own and operate the Nine Mile facilities. They include the parent company's sizable generation and energy holdings and its interests in nuclear power plants in Maryland. (12) When the Nine Mile facilities stop generating electricity, Constellation states, it will return the Oswego site to a greenfield condition. To this end, it will apply the decommissioning trust funds in accordance with NRC requirements and ratepayers will not have to provide any more contributions to the trust funds. In addition to assuming decommissioning responsibilities, Constellation will assume all operational costs and risks for the Nine Mile facilities. Its ownership of the facilities is not expected to provide it market power in New York. The petitioners note that Constellation does not own any transmission facilities in the State. The petitioners state that they have addressed employee concerns and labor interests by offering continued employment and compensation for transfers and severances. They also claim the sale will benefit the local community in Oswego County. Given a favorable real property tax agreement, the petitioners believe Constellation will operate the generating plants reliably in the competitive market. (12) The petitioners also point out that the Nuclear Regulatory Commission (NRC) requires license transferees to provide assurances that they are qualified to assume ownership. They specifically point to the NRC's safety, decommissioning, and financial requirements as providing additional support for the authorizations they are seeking here. 13

Staff also provides its support for the Joint Proposals. It states that each one provides a reasonable balance between ratepayer and shareholder interests. In each instance, Staff considers the amount of costs the utility will absorb (and not seek to recover from ratepayers) as an acceptable result in the prevailing circumstances. Staff also credits the provisions it obtained for various companies to apply amounts already being collected in rates to the unrecovered investment in the nuclear facilities. Addressing the Power Purchase Agreements, Staff notes that the PPAs are priced at the current estimate for electricity on the open market. As such, it considers them to be good hedges against market price fluctuations that could adversely affect customers. Likewise, with the Revenue Sharing Agreements, Staff states that the RSAs provide good hedges against market price increases at virtually no cost to ratepayers. Overall, Staff states that the Joint Proposals help to introduce competition in the electric industry by ending controversy about the recovery of nuclear power stranded costs. In support of the NMJP, Niagara Mohawk states that the proposal provides an equitable resolution of the sale transaction issues and the treatment of stranded and other costs. The company observes that the NMJP is consistent with applicable law and public policy, and it provides a negotiated result that is comparable to a litigated outcome. Niagara Mohawk considers the NMJP's chief attributes to be its preservation of jobs in Oswego County and the continuation of a zero-emission source of electricity. Multiple Intervenors also supports the NMJP. It states that the proposal provides a reasonable resolution of the issues, including the reduction of the company's investment by $123 million. MI specifically supports the proposal's Nuclear Electric Insurance Limited (NEIL), purchased power, and revenue sharing 14

provisions. According to RG&E, the RJP balances customer and utility interests well and it meets Commission objectives. Having used a competitive bid process, RG&E insists that the purchase price for the facilities compares favorably with the prices paid for other nuclear power plants. It also believes that the separation of the Nine Mile facility from the transmission and distribution assets will foster competition. Given the stranded costs it will forgo and the rate amounts it will use to amortize stranded costs, RG&E considers the proposal to be a fair resolution of the issues. Central Hudson also states that it made beneficial concessions to customers that support adoption of the CHJP. By achieving closure on the nuclear generation issues, Central Hudson believes it can focus better on the provision of delivery services and more effectively implement the vision for a competitive electric industry. Thus, the company considers its proposal to be reasonable and in the public interest. NYSEG states that the NYJP adds to the development of a competitive electric market and it points to the capital gain on the Nine Mile 2 sale that can be used to benefit ratepayers. It notes that a non-bypassable wires charge might have otherwise been needed to recover nuclear stranded costs. It also notes that customers do not risk Nine Mile 2 replacement power costs during the remainder of the prevailing rate restructuring plan. Finally, NYSEG states its strong preference to avoid becoming a minority owner of Nine Mile 2 with little control over its budget or operations. COMMENTS CONCERNING THE JOINT PROPOSALS(13) (13) In addition to the comments reported below, comments were also received from NYSEG and RG&E. NYSEG's comments concerning the need for a new operating agreement for Nine Mile 2 is moot given the NYJP and the proposed sale of the company's interest in the facility. RG&E's comments concern a transmission 15

STATE ATTORNEY GENERAL facility dispute between it and Niagara Mohawk that is pending court action. Whether or not Staff helps to mediate this dispute, RG&E's comments neither detract from nor dispute the merits of the NMJP. 16

The State Attorney General's Office (OAG) believes that utility company losses from the sale of nuclear power plants should be borne by shareholders and not be charged to ratepayers.(14) According to OAG, shareholders should shoulder the risk of nuclear power plants in return for the rewards they may provide. Given the sale of the Nine Mile facilities at less than their book value, OAG believes the stranded costs should be written off and not be converted into regulatory assets for ratepayers to pay. It contends that the utility companies' management (not ratepayers) decided to make uneconomic investments in nuclear power plants. According to OAG, the Commission has ample authority to relieve ratepayers of the stranded cost burdens. It points out that the utility companies were never provided any assurances that stranded costs would be recovered in rates. OAG also opposes provisions in various Joint Proposals that seek to restrict parties' rights to challenge the rate of returns the companies will seek in upcoming rate proceedings. It insists that no party should be precluded from advocating a different rate of return for regulatory assets than the one provided for transmission and distribution assets. Finally, OAG objects to Joint Proposal provisions that specify monthly true-ups of purchase power costs with market costs.(15) It prefers that these matters be considered in rate cases where other factors bearing on just and reasonable rates can also be considered. (14) OAG took the same position concerning the recent sale of the Indian Point nuclear generation facilities. See, Case Ol-E-0040, CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. - ASSET SALE, Order Authorizing Asset Transfer (issued August 31, 2001). (15) Such provisions are contained in the NMJP and the RJP. 17

MR. MAVRETICH(16) Mr. Mavretich recognizes the convenient opportunity the Joint Proposals provide to end the Nine Mile 2 controversy. However, he see little benefit in them for ratepayers. According to Mr. Mavretich, a greater portion of the companies stranded costs should be disallowed and not be recovered from ratepayers. He believes that the Joint Proposals are lopsided and they favor shareholder interests. He estimates that over $1 billion of cost recovery is provided to shareholders and he claims that ratepayers will receive no comparable advantage. Consequently, he urges that the Joint Proposals be rejected and that litigation or further negotiations be used to obtain better results for ratepayers. Mr. Mavretich specifically endorses the Joint Proposals' terms concerning the future benefits available from Nuclear Electric Insurance Limited (NEIL). He states that they properly preserve the benefits for ratepayers and they are consistent with the prefiled testimony he provided. IBEW LOCAL 97 IBEW Local 97 represents 6,200 utility workers; 700 work at the Nine Mile facilities. The union supports the Joint Proposals and states that they reasonably balance shareholder and ratepayer interests. Local 97 urges us to act expeditiously to end the uncertainty for workers at the facilities. NUCOR STEEL AUBURN Nucor Steel Auburn, Inc. believes the NYJP provides an (16) As noted above, Mr. Mavretich appeared in this proceeding on behalf of Congressman Maurice D. Hinchey. 18

acceptable resolution of the issues concerning NYSEG. It specifically endorses the establishment of an Asset Sale Gain Account that will be used to provide ratepayer benefits in a financially responsible manner. ALLIANCE FOR MUNICIPAL POWER In May 2001, the Alliance For Municipal Power (AMP) commented on the NMJP. AMP is concerned about the exit fees that municipal customers pay before they can leave the electric network. In general, AMP has complained about the summary nature of the NMJP, contending that it should have included more details about the purchase price and stranded costs. AMP specifically criticizes the provision that would apply Niagara Mohawk's allowed rate of return to the nuclear regulatory assets. It also wants to review the final transaction costs for the sale. AMP proposes that Niagara Mohawk not be allowed to recover its legal fees related to the sale. PUBLIC COMMENTS Throughout this proceeding, we have received letters, electronic mail, and comments concerning the Joint Petition.(17) Recently, when the parties filed their Joint Proposals, we conducted public information forums in Syracuse on October 2, and in Oswego on October 3, 2001. At the forums, the staff of the Office of Consumer Education and Advocacy described the Joint Petition the Joint Proposals and solicited comments. The public was also advised to mail, telephone, or submit comments electronically over the internet. Among others, we have heard from a certified public accountant in Liverpool who urges us to reject the Joint Proposal (17) Some of the correspondence we received was initially sent to Governor Pataki and various state legislators. Such letters were forwarded to us to consider in this proceeding. 19

and from a resident of Greenlawn who believes that the nuclear power plants should not be sold. A student attending the State University of New York at Potsdam wrote us concerning the safe operation of nuclear power plants and an RG&E ratepayer believes his utility company should write off all the remaining Nine Mile 2 costs. A resident of Oswego not only opposes recovery of stranded costs he believes a portion of the costs ratepayers have paid for the facilities should be returned. At the public forums, 33 persons attended and 12 provided comments. Several speakers urged that the power plants not be sold and that they no longer operate. Others expressed concerns about public safety, decommissioning efforts, and the need for more information. We also heard from an individual who was unable to attend the public forums who is concerned about the risks of operating nuclear power plants and would prefer that they be shut down. DISCUSSION AND CONCLUSION The proposed sale of the four utility companies' interests in Nine Mile 1 and 2, with associated facilities, is consistent with the policies the Commission announced in 1996 to open the electric system to competition and to allow electric generation companies to compete in the sale of electricity. Each of the utility companies has been operating since that time pursuant to a rate restructuring plan the terms of which the Commission has ordered. To their credit, the terms of the proposed sales to Constellation are the result of a competitive bid and auction process. This is in stark contrast to the sale terms two utility companies presented in mid-1999 that they subsequently withdrew.(18) (18) Case 99-E-0933, JOINT PETITION TO TRANSFER NUCLEAR GENERATION ASSETS, Order Allowing Petitions to be Withdrawn (issued April 25, 2000) 20

In Case 99-E-0933, we understood that multiple bidders were interested in the nuclear generation facilities and we insisted that the utility companies seek to obtain a substantially higher market value for them. That objective has been met in this case with the results of Constellation's successful bid that we find acceptable. To assist the utility companies in their auction efforts, in April 2000, we addressed nuclear stranded cost matters and provided several observations. Chief among them, we stated that the sale of the nuclear generation facilities at their current market value would constitute appropriate mitigation of the stranded costs. We also stated our willingness to address the ratemaking treatment for the Nine Mile sale at the same time we determined whether the proposed asset transfer was in the public interest.(19) As in the recent case involving Consolidated Edison's sale of the Indian Point nuclear facilities to Entergy, the Office of the Attorney General (OAG) has stated its general opposition to ratepayers paying the stranded costs for sales that fail to produce sufficient proceeds to cover book costs. In this case, two utility companies (Niagara Mohawk and RG&E) clearly have stranded cost losses attributable to the sale of their nuclear generation facilities, a portion of which ratepayers are being called upon to pay. The same might also be said of the results of Central Hudson's and NYSEG's sale of their nuclear generation assets; however, these companies used gains achieved from the sale of other generating facilities to cover a portion of their book costs for Nine Mile 2. Addressing first the circumstances presented by Central Hudson and NYSEG, we find that treatment of nuclear stranded costs provided by the CHJP and the NYJP is acceptable and that they reasonably balance the interests of ratepayers and (19) ID., pp. 7 and 8. 21

shareholders. The CHJP requires Central Hudson to place its share of the Nine Mile 2 purchase price in a benefit fund for ratepayers and it requires the company to contribute another $19 million to the benefit fund. These are substantial advantages for ratepayers that support our finding that the sale of Central Hudson's portion of Nine Mile 2 is in the public interest and should be authorized. Similarly, the NYJP requires NYSEG to establish an asset sale gain account and to fund it with the company's portion of the Nine Mile 2 sale proceeds and additional amounts. Like the funds Central Hudson is putting aside, the NYSEG funds will be used to benefit ratepayers in a financially responsible manner. These results support our finding that the sale of NYSEG's portion of Nine Mile 2 is in the public interest and should be authorized. With respect to Central Hudson and NYSEG, we reject OAG's and Mr. Mavretich's assertions that the gains achieved from the sale of other generation facilities should not have been used to reduce their book costs for Nine Mile 2. Given the acceptable terms of the CHJP and the NYJP that we can adopt, there is no merit in the contention that ratepayer interests are not served by applying the gain on other sales to the Nine Mile book costs. Turning to Niagara Mohawk and RG&E, and their proposals to establish regulatory assets to recover Nine Mile stranded costs, in neither instance does the utility company seek to recover their entire loss on the sale transaction. The RJP requires RG&E to write off $20 million of its loss which we find to be a proper amount given the company's current financial and business circumstances, and considering the continuing challenges associated with RG&E's ownership and operation of the Ginna Nuclear Station and its remaining unrecovered nuclear investments. In addition, the RJP requires the company to redirect and use up to $30 million currently being collected in rates to amortize the nuclear regulatory asset. These are 22

substantial ratepayer benefits that otherwise reduce the charges that could have been applied to them. For these reasons we find that the terms of the RJP are acceptable and the sale of RG&E's interest in Nine Mile 2 is in the public interest. As the sole owner of Nine Mile 1 and as the company with the largest single interest in Nine Mile 2 (at 41%), it is no surprise that Niagara Mohawk incurs the greatest loss on the sale of the nuclear facilities. The NMJP balances ratepayer and shareholder interests by requiring the company to write off $123 million of the loss on the sale. However, according to OAG and Mr. Mavretich, Niagara Mohawk (and the other utility companies) should have written off much more than this to provide a proper balance of ratepayer and shareholder interests. Inasmuch as the generation assets were constructed to serve ratepayers and Niagara Mohawk's regulated rate of return was constrained and limited to its cost of capital, OAG's and Mr. Mavretich's contentions are incorrect. (20) Thus, we find no merit in Mr. Mavretich's request for the parties to engage in further negotiations or for us to initiate litigation in this case. As to other Joint Proposal terms that have drawn adverse comments, the OAG and the Alliance For Municipal Power (AMP) object to any limits on the rate of return issues in (20) We also note that Niagara Mohawk recently announced that it is willing, in the context of its proposal to merger with National Grid, to write-off an additional $850 million. Case Ol-M-0075, NIAGARA MOHAWK AND NATIONAL GRID MERGER PROPOSAL, Joint Proposal (dated October 11, 2001). 23

upcoming RG&E and Niagara Mohawk rate proceedings.(21) While the RJP's provisions apply only to Staff and the company,(22) OAG nonetheless objects to them as a matter of public policy. Both the OAG and AMP object to the NMJP's provisions for the limits they seek to impose on third parties. We find no compelling public policy reason to preclude Staff from stating in advance the approach it will adhere to and use in upcoming rate proceedings. We are not troubled by the commitments it has made with RG&E that do not impose any limits or restrictions on any other party. With respect to the restrictions the NMJP seeks on third parties proposing a different rate of return for the nuclear regulatory asset, we will place no such restrictions on the comments, or other submissions, that may be provided in other cases. OAG is also opposed to the purchase power cost true-up provisions proposed by Niagara Mohawk and RG&E and claims this matter is better left to the companies' upcoming rate (21) The CHJP and the NYJP do not contain any such provisions. (22) RG&E's Reply Comments (dated September 28, 2001), p. 8. 24

proceedings.(23) In response, RG&E states that it only intended the RJP's true-up provision to operate on an interim basis pending the results of its next proceeding.(24) Thus, there does not appear to be any true issue between these parties. With respect to Niagara Mohawk, as stated above, any party who seeks to address the true-up provision in a ratemaking context will not be precluded from submitting their comments or submissions. Finally, while AMP believes that Niagara Mohawk should not be allowed to recover all its legal fees, the company's legal fees and final transaction costs remain subject to a final audit.(25) In summary, we have considered the Joint Petition, and the various agreements the selling cotentants and Constellation have executed for the Nine Mile facilities. We have also considered the Joint Proposals that the petitioners have executed with Staff, CPB and Multiple Intervenors. Further, as discussed above, we have evaluated the comments that the parties and the public have provided concerning the Joint Petition and the Joint Proposals. All of this leads us to find that the proposed sale of the Nine Mile nuclear generation assets is in the public interest and the transfer should be authorized pursuant to PSL ss.(70). STATE ENVIRONMENTAL QUALITY REVIEW ACT FINDINGS (23) OAG also opposed such provision in the CHJP; however, Central Hudson denies that there are any provisions of this sort in its Joint Proposal. Central Hudson's Reply Comments (dated September 28, 2001), pp. 4 and 5. (24) RG&E's Reply Comments (dated September 28, 2001), pp. 9 and 10. (25) The companies' filing of their final costs will be made public and available for inspection by AMP or any other interested party. 25

On May 3, 1996, the Commission issued a Final Generic Environmental Impact Statement (FGEIS) that addressed the statewide environmental, social and economic impacts of a policy opening New York's electric markets to competition.(26) The FGEIS acknowledged that localized impacts could arise as a result of specific divestiture proposals presented by individual companies. To determine if any such impacts existed, each company was directed to file a draft Environmental Assessment Form (EAF) with its divestiture plan. The approval of the sale of Nine Mile 1 and 2 to Constellation constitutes a subsequent action to the policy determinations issued in Case 94-E-0952 and to the rate and restructuring decisions made by the Commission (Opinion Nos. 98-1, 98-6, 98-8, and 98-14.)(27) Therefore, under the State (26) Case 94-E-0952, ET AL., Competitive Opportunities Proceeding. (27) Case 94-E-0952, SUPRA, Opinion No. 96-12 (issued May 20, 1996) ; Case 96-E-0898, ROCHESTER GAS AND ELECTRIC CORPORATION - RATE RESTRUCTURING, Opinion No. 98-1 (issued January 14, 1998) ; Case 96-E-089l, NEW YORK STATE ELECTRIC & GAS CORPORATION - RATE RESTRUCTURING, Opinion No. 98-6 (issued March 5, 1998); Case 94-E-0098, NIAGARA MOHAWK POWER CORPORATION - ELECTRIC RATES, Opinion No. 98-8 (issued March 20, 1998); and, Case 96-E-0909, CENTRAL HUDSON GAS & ELECTRIC CORPORATION - RATE 26

Environmental Quality Review Act (SEQRA), the Commission must determine whether the impacts associated with the proposed transfer are within the conditions and thresholds of the FGEIS. The Commission issued a Final Supplemental Environmental Impact Statement on October 5, 2001, which analyzed the detailed site-specific information provided in the draft SEIS submitted by the petitioners as part of their PSL ss.70 filing and the other factual information referenced therein. It identifies and addresses the environmental, social and economic impacts found to arise as a result of the transaction. Determinations were made as to whether the impacts identified are within the conditions and thresholds of the FGEIS. Additionally, a comparison was made to the no action alternative to gauge the extent to which impacts actually arose as a result of the proposed action. We solicited but did not receive any comments from the public on the draft SEIS. Nonetheless, we recognized a potential significant adverse impact--the asset transfer's effects on property tax revenues. This impact was addressed and found to be mitigated to the maximum extent practicable by a Memorandum of Understanding (MOU) between the cotenants and the Town of Scriba that sets the property taxes for the Nine Mile facilities for the next ten years. Constellation has agreed to accept and abide by the MOU. When the localized impacts identified are balanced against the overall benefits to be derived from the proposed transfer (as addressed in this order), it is clear that utility ratepayers, and the State as a whole, will be better off by approving the transaction. The separation of generation facilities from transmission and distribution assets should lead to a competitive marketplace and reduced rates. Lower electric rates should lead to economic growth and development. Given RESTRUCTURING, Opinion No. 98-14 (issued June 30, 1998). 27

Constellation's focus on nuclear electricity, this transaction should contribute to the safe and continued operation of the plants and to system reliability. Accordingly, the Commission makes the findings stated above regarding the environmental impacts associated with the sale. Pursuant to 6 NYCRR 617.11, the Commission certifies that, consistent with environmental, social and economic considerations from among the reasonable alternatives available, the approval of the sale of Nine Mile 1 and 2, and related assets, avoids or minimizes adverse impacts to the maximum extent practicable and satisfies the requirements of SEQRA. The action is also consistent with applicable policies set forth in Article 42 of the Executive Law (Local Waterfront Revitalization and Coastal Resources), as implemented by 19 NYCRR 600, and will achieve a balance between the protection of the environment and the need to accommodate social and economic considerations. FEDERAL AND STATE REGULATION The petitioners interpret the Public Utility Holding Company Act (PUHCA) as requiring a finding that new ownership of a generating facility will benefit customers, is in the public interest, and does not violate state law, before Constellation can be afforded exempt wholesale generator (EWG) status for the Nine Mile 1 and 2 generating facilities. Constellation seeks this status so it may operate the facilities free of federal regulation intended for monopoly utilities. Constellation sees the requisite benefit for the public in its participation in the wholesale competitive market, which should result in increased competition. Therefore, the petitioners request that findings be made that the Nine Mile generating facilities be determined to be "eligible facilities" as that term is defined by PUHCA ss.32, thereby allowing the Federal Energy Regulatory Commission (FERC) to issue a decision qualifying Constellation for EWG status under federal law. 28

In conformance with PUHCA and FERC's regulations,(28) the Commission finds that allowing the Nine Mile facilities to become eligible facilities, with Constellation owning the plants (either directly or indirectly through one or more affiliates as defined under federal law)(29) will benefit New York consumers, is in the public interest, and does not violate New York law. These findings are made on the same basis that we have found that the transaction is in the public interest pursuant to PSL ss.70. The Commission determined in Case 94-E-0952 (Opinion No. 96-12) that a competitive marketplace for the provision of electricity supply would benefit New York customers and this transaction furthers that goal. Moreover, there is no violation of New York law in transferring the plants to Constellation. (28) 15 U.S.C.A.ss.79z-5l; 18 C.F.R. ss. 365. (29) 15 U.S.C.A. ss.79b(a) (ii); 18 C.F.R.ss.365(a) (1) (i). 29

While Constellation will become an electric corporation under New York law when it assumes ownership of the Nine Mile facilities, it is being accorded lightened regulation.(30) This approach to regulation has been previously approved for generators that intend to participate entirely or primarily in the wholesale market.(31) Constellation, however, will still be subject to state regulation with respect to such matters as enforcement, investigation, safety (subject to the NRC's jurisdiction over radiological matters), reliability and system improvements. THE COMMISSION ORDERS: 1. The terms and conditions of the five Joint Proposals identified and described herein are adopted and incorporated as part of this order. 2. The Nine Mile 1 and 2 Asset Purchase Agreements are approved, subject to the requirements of this order. 3. The Cotenant Agreement (as amended by the First Amendment dated September 28, 2000) and the Selling Cotenant Agreement (as amended by the First Amendment dated September 28, 2000) are approved, subject to the requirements of this order. (30) Case Ol-E-0349, NINE MILE POINT NUCLEAR STATION, LLC, Order Providing For Lightened Regulation of Nuclear Generation Facilities (Issued October 29, 2001). (31) See, E.G. Case 98-E-l670, CARR STREET GENERATING STATION, Order Providing for Lightened Regulation (issued April 23, 1999). 30

4. The Transmission Purchase and Sale Agreement and the Transmission Owners Agreement are approved, subject to the requirements of this order. 5. The Power Purchase Agreements and the Revenue Sharing Agreements are approved, subject to the requirements of this order. 6. The Property Tax Memorandum of Understanding is deemed to be reasonable, prudent, and in the public interest. 7. No later than 90 days following the closing of the sale and transfer of the Nine Mile nuclear assets, the petitioners shall file with the Commission a statement of the amount of proceeds received, the costs incurred, and the proposed accounting and ratemaking treatment for the net proceeds, in conformance with the requirements of this order. 8. The findings related to the Final Supplemental Environmental Impact Statement required under the State Environmental Quality Review Act described in the body of this order are made. 9. The findings on exempt wholesale generator status under the Public Utility Holding Company Act described in the body of this order are made. 10. This proceeding is continued.
By the Commission, (SIGNED) JANET HAND DEIXLER Secretary

31

EXHIBIT (99)(i)8 STATE OF NEW YORK PUBLIC SERVICE COMMISSION At a session of the Public Service Commission held in the City of Albany on September 26, 2001 COMMISSIONER PRESENT: Maureen O. Helmer, Chairman
CASE 01-M-0323 Petition of Central Hudson Gas & Electric Corporation for Authority to (a) enter into a Revolving Credit Agreement not to exceed an aggregate principal amount of $77,000,000; and (b) to issue and sell unsecured Medium Term Notes through June 30, 2004 in an amount not to exceed $125,000,000.

ORDER AUTHORIZING ISSUANCE OF SECURITIES (Issued and Effective September 27, 2001) BACKGROUND By petition filed March 7, 2001, Central Hudson Gas & Electric Corporation (petitioner) has requested Commission authority to increase the amount of its revolving credit agreement authority (revolver) from $50 million to $75 million, to continue lines of credit with local banks in the amount of $2 million, and in addition, approval to issue $100 million of medium term notes.(1) The issuance of securities in the amount requested will be authorized, subject to the conditions imposed in this Order. The issuance is reasonably required for the purposes specified in the attached memorandum, and such purposes are not, in whole or in part, reasonably chargeable to operating expenses or to income. (1) By letter dated August 27, 2001 the company revised its request from $125 million to $100 million.

For the reasons detailed in the attached memorandum, approval of the petitioner's request for the revolver is necessary at this time because the company's existing revolving credit agreement expires October 23, 2001, and without the revolver, the company lacks committed funding to support the issuance of unsecured short-term financial obligations. In addition, the company needs financing authorization on a longer term basis for construction purposes, redemption of outstanding debt issues, and the ratepayer refunds provided for in the Joint Proposal that is being brought before the Commission in Cases 00-E-1273 & G-l274.(2) IT IS ORDERED: 1. Petitioner is authorized to enter into Revolving Credit Agreements totaling $75 million and continue local bank agreements for $2 million, for a total of $77 million, that expire on June 30, 2004. 2. Petitioner is authorized to issue and sell up to $100 million of Medium Term Notes through June 30, 2004. The debt shall be issued pursuant to the documents referenced in the petition in this proceeding. 3. Within two weeks after the execution of any debt financing authorized under this Order, petitioner shall file with the Director of the Office of Accounting and Finance detailed information regarding the price, maturity, terms of issuance, participating banks and participation fees, as appropriate and in conformance with the form prescribed by 16 NYCRR Section 115.1 and Section 245.1. (2) Cases 00-E-1273 & 00-l274, PROCEEDING ON MOTION OF THE COMMISSION AS TO THE RATES, CHARGES, RULES AND REGULATIONS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION FOR ELECTRIC AND GAS SERVICE. 2

3. The proceeds from the sale of the securities authorized by this Order shall be deposited in a special fund in a responsible banking institution or institutions. The proceeds shall be applied towards reimbursement of petitioner's treasury for equivalent moneys expended for capital purposes up to December 31, 2000. The reimbursement funds shall be used towards the repayment of maturing debt, construction as described in the accompanying memo, and working capital purposes. Any remaining funds are to be used towards expenditures incurred after January 1, 2001, for the purposes permitted under Section 69 of the Public Service Law, which shall be over and above the expenditures made for such purposes through funds originating from credits to the accumulated provision for depreciation, net salvage and accumulated deferred income taxes. A portion or all of the said remaining funds may be used from time to time for other utility purposes during the period ending June 30, 2004, or may be invested in short-term marketable securities on condition that such funds, to the extent the same are not offset by gross additions less funds originating from credits to the accumulated provisions for depreciation, net salvage and accumulated deferred income taxes on or after January 1, 2001, are deposited in a special fund in a commercial banking institution or institutions not later than June 30, 2004. In no instance shall any part of the proceeds be used to pay accrued interest or dividends on the discharged or refunded obligations. 4. If, upon examination of the expenditures made from withdrawal from the said special fund, it is determined that any expenditure is not a reasonable and proper capital charge, or has not been duly authorized by the Commission, or is in violation of any Order of the Commission or any provision of law, a sum equal to such expenditure shall, upon Order of the Commission, promptly be placed in the special fund and said sum shall be subject to all of the conditions and restrictions of this Order. 5. The total costs and expenses of issuing the securities authorized 3

by this Order, paid or to be paid by petitioner and charged to Account 181 - Unamortized Debt Expense, shall not exceed, the amounts described in petitioner's filing in this proceeding. Petitioner shall submit a verified report showing in detail all costs and expenses. 6. The authority granted and the conditions imposed by this Order shall not be construed as passing upon or otherwise approving the accuracy of the books, records and accounts of petitioner. 7. The securities authorized by this Order shall not be issued unless and until there has been filed with this Commission an unconditional acceptance by petitioner agreeing to obey all the terms, conditions and requirements of this Order. If such acceptance is not so filed within a period of 30 days from the effective date of this Order, this Order may be revoked by the Commission without further notice. 8. This proceeding is continued. (SIGNED) -------------------Commissioner 4

ATTACHMENT STATE OF NEW YORK DEPARTMENT OF PUBLIC SERVICE September 11, 2001
TO: FROM: SUBJECT: THE COMMISSION OFFICE OF ACCOUNTING & FINANCE CASE 0l-M-0323 - Petition of Central Hudson Gas & Electric Corporation for Authority to (a) enter into a Revolving Credit Agreement not to exceed an aggregate principal amount of $77,000,000; and (b) to issue and sell unsecured Medium Term Notes through June 30, 2004 in an amount not to exceed $125, 000, 000.

SUMMARY OF RECOMMENDATION:

Staff recommends approval of the Revolving Credit Agreement in the amount of $75 million, the continuation of credit agreements up to $2 million, and approval of the issuance of unsecured medium term notes in an amount not to exceed $100,000,000.

SUMMARY On March 7, 2001, Central Hudson Gas & Electric Corporation

(CHG&E or the company) filed a petition requesting authority to increase the amount of its revolving credit agreement authority from $52 million to $77 million, and in addition, approval to issue $125 million of medium term notes. The company claims that the $77 million in short-term credit agreements will provide the needed cash flow to manage short-term debt that may arise as a result of a lack of internal funds and/or purchased power costs. The agreements supporting CHG&E's existing $52 million revolving credit expire October 23, 2001. The company requests authorization to enter into new agreements through 2004 as well as to increase its limitation to $77 million.

In addition, the company seeks approval to enter into agreements to issue medium term notes. The company's petition originally requested $125 million of medium term notes. However, after discussions with staff, the company revised its request by letter dated August 27, 2001 to a level of $100 million. Staff recommends approval of CHG&E's financing proposals as revised, subject to the conditions contained in the Order to be issued in this proceeding. FINANCIAL STATISTICS The company's secured and unsecured debt ratings are currently:
-------------------------------------------------------------------------------Secured Debt Rating Unsecured Rating -------------------------------------------------------------------------------Moody's A2 A3 -------------------------------------------------------------------------------Standard & Poor's A A-------------------------------------------------------------------------------Fitch A A--------------------------------------------------------------------------------

CHG&E's income statement and balance sheet for the period ending December 31, 2000 are attached as Appendix A. CHG&E's return on average equity was approximately 10.5% for the 12 months ended June 30, 2001. The company's proforma capitalization and capitalization ratios for the period 2001 through 2004 are attached as Appendix B (Financing filing, Appendix A-1 Sheet 4, Revised 9/4/01) . The company's interest coverage ratios are shown in Appendix C, (Appendix A-2 of filing, Revised 9/4/01). The company and Staff have recently entered into a three-year Settlement Proposal(3) (3) Cases 00-E-1273 & 00-G-l274, Proceeding on Motion of the Charges, Rules and Regulations of Central Hudson Gas & Electric Corporation for Electric and Gas Service.

that reflects declining equity ratios of 47%, 46% and 45%, respectively over the three-year term. Staff is recommending that the Commission approve the Settlement Proposal in a concurrent session item. The Settlement Proposal contemplated the redemption of long-term debt required to reflect the company's sale of fossil generating plants and the subsequent reduction in rate base and supporting financing. USE OF PROCEEDS Rules and Regulations of Central Hudson Gas & Electric Corporation for Electric and Gas Service. 3

CHG&E's forecasted cash requirements for the three-year period ending June 30, 2004 are shown on Appendix D. The company's cash requirement schedule supports the need for approximately $100 million of additional financing. The $100 million financing need is largely the result of proposed construction expenditures, a mandatory long-term debt redemption, and customer refunds totaling $45 million (on a net of tax basis) as agreed to in the Settlement Proposal. The company anticipates using Medium Term Notes (MTN) to meet these financing requirements. The company's proforma reimbursement margin through the period June 30, 2004 as shown on Appendix E, demonstrates a margin of about $192 million and is sufficient to support the company's proposed financing.(4) MEDIUM TERM NOTES In order to meet its long term financing requirements, CHG&E seeks authority to sell up to $100 million of unsecured MTN's through December 30, 2004. CHG&E has experience in selling MTN's (Cases 9l-M-l201, 94-M-0l98, and 96-M-0408) and the MTN program is expected to have similar terms as in their last case, although the indexes for pricing the securities are slightly higher than the company's present program, which will expire October 23, 2001. Nevertheless, the current overall rate is lower, due to lower current interest rates. The MTN program allows for the continuous offering of debt securities at relatively low underwriting commissions in small increments and has been an acceptable financing vehicle previously approved by the Commission. The ability to continuously offer debt provides flexibility for the (4) The Electric and Gas Divisions reviewed the company's construction budget and have proposed no adjustments. 4

company to more quickly take advantage of interest rate fluctuations and time its issuance of debt to more closely coincide with cash needs. The company's filing provided preliminary interest rate spreads above U.S. Treasuries as well as redemption features for various maturities. In addition, an estimate of the costs and expenses associated with the issuance of medium term notes has also been provided for staff's review. With a three-year rate plan in effect, staff believes the company will seek the best terms it can on the medium term notes. Therefore, staff does not recommend pre-approved spreads in this case, but would require the company to compare its issuance spreads to companies having a similar credit rating for staff's review, in accordance with the Order to be issued in this proceeding. The Order will require that the company submit a justification of its actions as well as the terms and conditions of any financing after it occurs. Staff will compare the terms and conditions of any CHG&E financings to similar utility financings and, if staff is are not satisfied with the results, staff could challenge the costs in a rate proceeding and/or propose that the Commission rescind the Order with respect to prospective issuances. REVOLVING CREDIT AGREEMENT The company believes it is advisable to increase the level of its Revolving Credit Agreement (revolver) from $50 million to $75 million. The company's internally generated funds have decreased due to the loss of depreciation accruals and deferred taxes associated with the now divested electric production plants. The company also believes it is necessary to 5

increase the size of its revolver due to potential variability in purchased power costs. For the period 2001-2004, the company has contracted for energy purchases through purchased power contracts mainly with Dynegy Power Corporation (the purchaser of its Danskammer and Roseton Fossil Generating Stations) . CHG&E contracted for approximately 70-80% of its current energy needs for 2001-02. However, the percentage under contract ramps down to 20-30% for 2003-04. The company believes that as the portion of energy purchases subject to market variability increases, CHG&E will need additional working capital to adequately finance such purchases, until the energy costs are billed to customers and then received. The company currently bills customers on a bi-monthly cycle, which causes a billing lag. The cash flow lag will be financed by the larger revolving credit facility. The increased cost in maintaining a larger revolver balance is approximately $43,000 annually, and is reasonable considering the company's needs. ISSUANCE EXPENSES The company has provided an estimate of the issuance expenses expected for both the revolver and the issuance of medium term notes for 6

Staff's review. The company will submit its actual expenses after the completion of the issuance of the medium term notes and after signing the Revolving Credit Agreement. ACCOUNTING TREATMENT CHG&E will be permitted to defer and amortize the costs incurred with the new issuances. The Joint Proposal provides for the amortization of the costs incurred as well as any remaining unamortized expenses, including refunding premiums, associated with the redeemed issues. The accounting treatment and any analysis of the issuance expenses will be reviewed by staff in accordance with the terms of the Order to be issued in this proceeding. RECOMMENDATION Staff believes that the flexibility provided by the continued use of medium term notes is an appropriate way for CHG&E to meet its projected long-term financing needs. With regard to its short-term needs, a modest increase in its Revolving Credit Agreement is a reasonable solution. In summary, the company should be authorized to: (1) issue and sell up to $100 million of Medium Term Notes for the purposes discussed within this memo; and (2) enter into Revolving Credit Agreements totaling $75 million and local bank agreements for $2 million for a total of $77 7

million, and (3) the proceeding is continued. Respectfully submitted, SIGMUND F. PEPLOWSKI Principal Utility Financial Analyst Reviewed by: JOSEPH G. LOCHNER, Supervisor Utility Finance and Accounting LEONARD VAN RYN Assistant Counsel Approved by: WAYNE BRINDLEY, Chief Office of Accounting & Finance 8

APPENDIX A SHEET 1 OF 3 CENTRAL HUDSON GAS & ELECTRIC CORP. DECEMBER 31, 2000 COMPARATIVE BALANCE SHEET ASSETS AND OTHER DEBITS December 31, 2000 UTILITY PLANT
Electric Utility Plant Less Accum. Prov. For Deprec. & Amort. Net Electric Utility Plant Gas Utility Plant Less Accum. Prov. For Deprec. & Amort. Net Gas Utility Plant Other Utility Plant Less Accum. Prov. For Deprec. & Amort. Net Other Utility Plant Total Utility Plant Less Accum. Prov. For Deprec. & Amort. Net Total Utility Plant OTHER PROPERTY AND INVESTMENTS Nonutility Property Accum. Prov. For Deprec. & Amort. Investment in Associated Companies Investment in Subsidiary Companies Other Investments Other Special Funds Total Other Property and Investments CURRENT AND ACCRUED ASSETS Cash Special Deposits Working Funds Temporary Cash Investments Notes Receivable Accounts Receivable Accum. Prov. For Uncollectible Accts. Notes Receivable from Associated Cos. Accounts Receivable from Assoc. Cos. Materials and Supplies Gas Stored Underground - Current Liquefied Natural Gas in Storage Prepayments Interest and Dividends Receivable Rents Receivable Accrued Utility Revenue Misc. Current and Accrued Assets Total Current and Accrued Assets DEFERRED DEBITS Unamort. Debt. Expense Extraordinary Property Losses Prelim. Survey and Investigation Charges Clearing Accounts Temporary Facilities Miscellaneous Deferred Debits Deferred Losses from Disp. of Utility Plant Research and Development 1,356,696,459 619,667,752 737,028,707 178,524,019 61,364,625 117,159,394 104,561,492 27,897,975 76,663,517 1,639,781,970 708,930,352 930,851,618

978,853 -12,351 0 88,263 166,616 81,422,194 82,643,575

11,608,742 209,520 591,496 4,996,361 0 76,402,925 -2,500,000 0 126,146 21,558,874 5,901,098 0 12,281,226 2,729 418,181 19,750,585 1,887,979 153,235,862

4,868,602 0 543,327 399,417 0 166,124,815 0 -6,369,901

Accumulated Deferred Income Taxes Total Deferred Debits TOTAL ASSETS AND OTHER DEBITS

79,785,026 245,351,286 1,412,082,341

APPENDIX A SHEET 2 OF 3

COMPARATIVE BALANCE SHEET LIABILITIES AND OTHER CREDITS December 31, 2000 PROPRIETARY CAPITAL
Common Stock Issued Preferred Stock Issued Capital Stock Subscribed Stock Liability for Conversion Premium on Capital Stock Other Paid-in Capital Installments Received on Capital Stock Capital Stock Expense Retained Earnings Unapp. Undistributed Subsidiary Earnings Reacquired Capital Stock Total Proprietary Capital LONG-TERM DEBT Bonds Reacquired Bonds Advances from Associated Companies Other Long-Term Debt Unamortized Premium on Long-Term Debt Unamortized Discount on Long-Term Debt-Debit Total Long-Term Debt CURRENT AND ACCRUED LIABILITIES Notes Payable Accounts Payable Notes Payable to Associated Companies Accounts Payable to Associated Companies Customer Deposits Taxes Accrued Interest Accrued Dividends Declared Matured Long-Term Debt Matured Interest Tax Collections Payable Misc. Current and Accrued Liabilities Total Current and Accrued Liabilities DEFERRED CREDITS Customer Advances for Construction Other Deferred Credits Accumulated Deferred Investment Tax Credits Deferred Gains from Disposition of Utility Plant Accumulated Deferred Income Taxes Total Deferred Credits OPERATING RESERVES Property Insurance Reserve Injuries and Damage Reserve Pension and Benefits Reserve Miscellaneous Operating Reserves Total Operating Reserves TOTAL LIABILITIES AND OTHER CREDITS 84,310,435 56,030,000 0 0 63,868,166 209,370,014 0 -5,864,822 114,493,926 52,396 0 522,260,115

120,130,000 0 0 263,450,000 0 -600,469 382,979,531

25,000,000 36,642,375 0 76,964 4,636,859 4,991,578 6,315,736 807,488 0 0 560,193 11,614,306 90,645,499

252,966 136,956,645 23,075,900 0 251,156,902 411,442,413

0 4,683,374 0 71,409 4,754,783 1,412,082,341

APPENDIX A SHEET 3 OF 3

COMPARATIVE INCOME AND RETAINED EARNINGS STATEMENT TOTAL UTILITY OPERATING INCOME December 31, 2000 ELECTRIC OPERATING INCOME
Operating Revenues Operating Expense: Operating Expense Maintenance Expense Depreciation Expense Amort. and Depletion of Utility Plant Amort. of Utility Plant Acq. Adj. Amort. of Property Losses Amort of Conversion/Regulatory Expenses Taxes Other than Income Taxes Income Taxes Gains from Disposition of Util. Plant Losses from Disposition of Util. Plant Total Operating Expenses Net Operating Revenues Other Electric Utility Operating Income Total Electric Utility Operating Income GAS OPERATING INCOME Operating Revenues Operating Expenses: Operating Expense Maintenance Expense Depreciation Expense Amort. and Depletion of Utility Plant Amort. of Utility Plant Acq. Adj. Amort. of Property Losses Amort of Conversion/Regulatory Expenses Taxes Other than Income Taxes Income Taxes Gains from Disposition of Util. Plant Losses from Disposition of Util. Plant Total Operating Expenses Net Operating Revenues Other Gas Utility Operating Income Total Gas Utility Operating Income Other Utility Operating Income TOTAL UTILITY OPERATING INCOME 531,820,028 319,412,308 27,150,059 42,724,065 248,672 0 0 0 46,084,135 30,861,600 0 0 466,480,839 65,339,189 65,339,189

107,038,695 76,050,858 2,705,490 4,921,052 19,741 0 0 0 7,909,122 5,512,100 0 0 97,118,363 9,920,332 9,920,332 0 75,259,521

APPENDIX B CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASH REQUIREMENTS TWELVE MONTHS ENDING JUNE 30, 2002, 2003 & 2004 ($000)
Twelve Months Three Yea 6/30/03 6 ------$ 53,500 -------$ --

6/30/02 ------CONSTRUCTION EXPENDITURES Cash Construction Expenditures $ 50,200 --------

INTERNAL FUNDS AVAILABLE Depreciation Accruals: Charged to Depreciation Expense (a) Charged to Other Income Accounts Total Deferred Federal Income Taxes - Net (b) AFDC Amortization of Deferred Credits Amortization - Nuclear Fuel Total Internal Funds BALANCE OF CONSTRUCTION REQUIREMENTS TO BE FINANCED

25,100 2,300 ------27,400 200 (300) (6,000) 0 21,300 ------28,900 -------

26,400 2,500 ------28,900 200 (800) (6,000) 0 22,300 ------31,200 -------

-

-

MANDATORY REFUNDING OF LONG TERM SECURITIES Long term Debt Preferred Stock NMP-2 Auction Proceeds OPTIONAL REFUNDING OF LONG TERM SECURITIES Long term Debt Preferred Stock Common Stock Total Customer Refunds Other Cash Requirements Total Cash Requirements

15,000 0 0 (32,000)

0 0 0 (8,000)

0 0 0 0 15,000 3,000 ------$29,900 =======

0 0 0 0 15,000 3,000 ------$41,200 =======

$ =

(a) Includes decommissioning provisions for NMP2 that are funded internally. (b) Assumes current federal income tax law.

APPENDIX C CENTRAL HUDSON GAS & ELECTRIC CORPORATION 6/30/2001 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
2001 YEAR ENDED DECEMBER 31, --------------------------3 Months 6 Months Ended Ended Earnings: JUNE 30 JUNE 30 JUNE 30 2000 1999 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- A. Net Income $2,925 $15,540 $39,679 $52,595 $51,881 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- 28,144 ------ ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- C. Earnings before Income Taxes $3,635 $22,984 $68,873 $88,193 $80,025 B. Federal & State Income Tax 710 7,444 29,194 35,598

---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- D. Fixed Charges Interest on Mortgage Bonds Interest on Other Long-Term Debt Other Interest Interest Portion of Rents Amortization of Premium & Expense on Debt 1,302 3,138 4,028 186 3,872 6,487 7,619 403 9,012 13,674 11,259 886 11,342 12,864 5,363 962 13,057 11,094 4,860 993

273 620 1,224 1,170 993 ---------------------------------Total Fixed Charges $8,927 $19,001 $36,055 $31,701 $30,997 ------------------------------------- ---------------------------------- ------------ ------------ -------------- ----------- ---------- E. Total Earnings $12,562 ======= $41,985 ======= $104,928 ======== $119,894 ======== $111,022 ========

Preferred Dividend Requirements ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- F. Allowance for Preferred Stock Dividends

Under IRC Sec. 247 $807 $1,615 $3,230 $3,230 $3,230 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- G. Less Allowable Dividend Deduction (32) (64) (127) (127) (127) ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- H. Net Subject to Gross-up 775 1,551 3,103 3,103 3,103 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- I. Ratio of Earnings before Income Taxes to Net Income (C/A)

1,243 1,479 1,736 1,677 1,542 ------------------------------------- ---------------------------------- ------------ ------------ -------------- ----------- ---------- J. Pref. Dividend (Pre-tax) (H x L) 963 2,294 5,387 5,204 4,785 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- 32 64 127 127 127 ------------------------------------- ---------------------------------- ------------ ------------ -------------- ----------- ---------- L. Preferred Dividend Factor 995 2,358 5,514 5,331 4,912 ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- M 8,927 19,001 36,055 31,701 30,997 ------------------------------------- ---------------------------------- ------------ ------------ -------------- ----------- ---------- Fixed Charges (D) K. Plus Allowable Dividend Deduction

N.

$9,922 $21,359 $41,569 $37,032 $35,909 ====== ======= ======= ======= ======= ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- O. Ratio of Earnings to Fixed Charges (E/D)

Total Fixed Charges and Preferred Dividends

1.41 2.21 2.91 3.78 3.58 ==== ==== ==== ==== ==== ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- P. Ratio of Earnings to Fixed Charges and Preferred Dividends (E/N)

1.27 1.97 2.52 3.24 3.09 ==== ==== ==== ==== ==== ---- ---------------------------------- ------------ ------------ -------------- ----------- ---------- -

(*) Restated to properly reflect the exclusion of AFUDC from fixed charges.

APPENDIX D CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASH REQUIREMENTS TWELVE MONTHS ENDING JUNE 30, 2002, 2003 & 2004 ($000)
Twelve Months Ending 6/30/02 ------CONSTRUCTION EXPENDITURES Cash Construction Expenditures $50,200 ------6/30/03 ------$53,500 ------Three Year 6/30/04 Total ------- -------$41,500 ------$145,200 --------

INTERNAL FUNDS AVAILABLE Depreciation Accruals: Charged to Depreciation Expense (a) Charged to Other Income Accounts Total Deferred Federal Income Taxes - Net (b) AFDC Amortization of Deferred Credits Amortization - Nuclear Fuel Total Internal Funds BALANCE OF CONSTRUCTION REQUIREMENTS TO BE FINANCED MANDATORY REFUNDING OF LONG TERM SECURITIES Long term Debt Preferred Stock NMP-2 Auction Proceeds

25,100 2,300 ------27,400

26,400 2,500 ------28,900

27,800 2,600 ------30,400

79,300 7,400 -------86,700

200 200 200 600 (300) (800) (500) (1,600) (6,000) (6,000) (6,000) (18,000) 0 0 0 0 21,300 22,300 24,100 67,700 ------- ------- ------- -------28,900 ------31,200 ------17,400 ------77,500 --------

15,000 0 0 15,000 0 0 0 0 0 0 0 0 (32,000) (8,000) (8,000) (48,000) ------- ------- ------- --------

OPTIONAL REFUNDING OF LONG TERM SECURITIES Long term Debt Preferred Stock Common Stock Total Customer Refunds Other Cash Requirements Total Cash Requirements

0 0 0 0 15,000 ------3,000 ------$29,900 =======

0 0 0 0 15,000 ------3,000 ------$41,200 =======

0 0 0 0 15,000 ------3,000 ------$27,400 =======

0 0 0 0 45,000 -------9,000 -------$ 98,500 ========

(a) Includes decommissioning provisions for NMP2 that are funded internally. (b) Assumes current federal income tax law.

APPENDIX E SHEET 1 OF 2 CENTRAL HUDSON GAS & ELECTRIC CORPORATION STATEMENT SHOWING REIMBURSEMENT MARGIN CLAIMED AS OF JUNE 30, 1997 AND AS OF DECEMBER 31, 2000
REIMBURSEMENT MARGIN CLAIMED AS OF JUNE 30, 1997 (CASE 96-E-0909) PLUS REIMBURSEMENT FOR PERIOD JUNE 30, 1997 TO DECEMBER 31, 2000 FUNDS APPLIED Gross Additions to Plant Plant in Service Plant Held for Future Use Nuclear Fuel Assemblies Construction Work in Progress TOTAL Mirror Cwip passed back to ratepayers Redemption on maturity date of Jan. 15, 1999 of 5.38% Promissory Notes Optional Redemption on March 1, 1999 of 8.38% Series First Mortgage Bonds Optional Redemption on Sept. 1 1999 of 1987 Variable Rate Series A & B Promissory Notes Optional Redemption on Oct. 1, 1999 of 1984 7 3/8% Series A & B Promissory Notes Optional Redemption on Nov. 1, 1999 of 1985 Variable Rate Series A & B Promissory Notes Redemption on maturity date of April 28, 2000 of 6.10% Series Firs Mortgage Bonds Redemption on maturity date of June 12, 2000 of 7.70% Series First Mortgage Bonds Sinking Fund payments on 6.25% First Mortgage Bonds made June 1998, 1999 and 2000 Repurchase of Common Stock as authorized in Case 96-M-0408 Change in Working Capital Requirements from June 30, 1997 to December 31, 2000 (Exhibit H-1, Sheet 1)

34,911,870

$ 169,694,202 0 958,431 (1,829,988) 168,822,645 15,424,246

20,000,000 16,700,000 43,600,000 33,400,000 72,250,000 10,000,000 25,000,000 285,000

23,608,508

41,892,472

470,982,871 ----------505,894,741

INTERNAL FUNDS AVAILABLE -----------------------INTERNAL FUNDS AVAILABLE (EXHIBIT G LESS 6 MONTHS ENDED 6/30/97 REPORTED PREVIOUSLY Changes in Accumulated Deferred Income Taxes (Exhibit H-1, Sheet 2) Loss on Disposition of Property

170,812,813

(6,837,449) 27,559 ------------164,002,923

EXTERNAL FINANCING Proceeds from the following issuances of Long-Term Debt: as authorized in Cases 96-M-0408, 96-E-0909, and 99-M-0493 Promissory Notes: 5.93% issued Sept. 8, 1998 4.20% 1998 Series A issued Dec. 2, 1998 6.00% 1999 Series C issued Jan. 15, 1999

15,000,000 16,700,000 20,000,000

5.45% 1999 Series A issued Aug. 3, 1999 Variable Rate 1999 Series B issued Aug. 3, 1999 Variable Rate 1999 Series C issued Aug,. 3, 1999 Variable Rate 1999 Series D issued Aug. 3, 1999 7.05% 1999 Series C issued Jan. 31, 2000 7.32% 1999 Series C issued June 13, 2000

33,400,000 33,700,000 41,150,000 41,000,000 7,500,000 40,000,000 ------------248,450,000 -------------

412,452,923 ----------$93,441,818

Reimbursement Margin Claimed as of December 31, 2000

APPENDIX E SHEET 2 OF 2 CENTRAL HUDSON GAS & ELECTRIC CORPORATION STATEMENT SHOWING REIMBURSEMENT MARGIN CLAIMED AS OF JUNE 30, 1997 AND AS OF DECEMBER 31, 2000 COMPUTATION OF REIMBURSEMENT MARGIN (CONT'D)
Reimbursement Margin Claimed as of December 31, 2000 SALE OF FOSSIL PLANTS: Proceeds from Sale Equity Transfers to Unregulated Affiliate Investment for Redemption of Debt and Preferred Stock Tax Liability of Sale Payment of Fuel Inventories, Auction Fees, etc. (721,548,000) 212,000,000 219,200,000 241,425,000 48,923,000 ----------$0 $93,441,818

ENCUMBERANCES Estimated Construction Charges for the three-year period ending June 30, 2004 Estimated Internal Funds for the three-year period ending June 30, 2004 NMP-2 Auction Proceeds Customer Refunds Working Capital Requirement Maturing Long-Term Debt

$145,200,000

($67,700,000) ($48,000,000) $45,000,000 $9,000,000 $15,000,000 ----------$98,500,000 -----------

Reimbursement Margin Claimed as of June 30, 2004 After Adjustment for Encumberances

$191,941,818 ============

EXHIBIT (99)(i)9 STATE OF NEW YORK PUBLIC SERVICE COMMISSION At a session of the Public Service Commission held in the City of Albany on October 24, 2001 COMMISSIONERS PRESENT: Maureen O. Helmer, Chairman Thomas J. Dunleavy James D. Bennett Leonard A. Weiss Neal N. Galvin
CASE 00-E-1273 Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations of Central Hudson Gas & Electric Corporation for Electric Service. Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations of Central Hudson Gas & Electric Corporation for Gas Service.

CASE 00-G-l274 -

ORDER ESTABLISHING RATES (Issued and Effective October 25, 2001) BY THE COMMISSION: The following order generally adopts terms set forth in Joint Proposal submitted by Central Hudson Gas & Electric Corporation (Central Hudson, the company); staff of the Department of Public Service (Staff); the Consumer Protection Board (CPB) ; Multiple Intervenors (MI); and Strategic Power Management, Inc., an energy services company (ESCO). We thereby establish a rate and regulatory plan intended to take effect as of July 1, 2001 and to continue for at least three years from that date. Today's order determines the rates Central Hudson will charge for

delivery of electricity and gas to customers that purchase those commodities from Central Hudson, and to customers that purchase the commodities elsewhere and rely on Central Hudson for delivery only. (The commodity portion of the bill is determined by energy prices in markets outside our regulatory jurisdiction.) The order will freeze electric and gas delivery rates for three years, after initially reducing electric delivery rates by 1.2% overall. In addition to rate levels, a major issue in this case has been the disposition of a "benefit fund" that will have accumulated as a result of Central Hudson's operations pursuant to the Rate and Restructuring Plan instituted in February 1998.(1) The fund includes, most significantly, the proceeds from the company's sale of its Danskammer and Roseton generating plants and its interest in the Nine Mile Point No. 2 (NMP2) generating plant. For purposes of the joint proposal, the parties have estimated the benefit fund as $164 million. Under a proposal pending in another proceeding,(2) the fund might be augmented by additional amounts related to the NMP2 sale. Under today's order, $42.5 million of the benefit fund will be used to offset rate base and thereby achieve the three-year rate freeze noted above. Another $45 million will be used as refunds to customers over the three years of the rate plan. As the $45 million is a net-of-tax amount, the refunds actually received by customers will total about $72 million. The remainder will be applied toward other customer benefits which may include additional refunds, reliability improvements, bill mitigation in the event of commodity price volatility, and economic development programs. To the extent that portions of the fund are held in reserve rather than used immediately, they will accrue interest on the customers' behalf. We also are adopting more stringent service quality criteria, and expanded programs to help residential customers that have difficulty paying (1) Case 96-E-0909, CENTRAL HUDSON GAS & ELECTRIC CORP. - ELECTRIC RATES AND RESTRUCTURING, Opinion No. 98-14 (issued June 30, 1998). (2) Case 01-E-0011, NIAGARA MOHAWK POWER CORP. ET AL., PETITION UNDER PUBLIC SERVICE LAW ss.70. 2

their utility bills. And, to enhance customers' ability to obtain energy supplies from providers competing with Central Hudson, we are prescribing backout credits which will determine what portion of the Central Hudson bill a customer may avoid by shopping elsewhere for the electric or gas commodity. We also will require that Central Hudson reimburse ESCOs for ancillary service charges imposed on them by the Independent System Operator, a cost element whose volatility has deterred market entry by ESCOs. BACKGROUND AND PROCEDURAL HISTORY Central Hudson serves about 260,000 customers in eight mid-Hudson counties. In the February 1998 Rate and Restructuring Plan, we set rates intended to continue through June 2001 and directed the company to divest its electric generating plants, unbundle its rates, and institute full retail access. The current proceedings were instituted to consider new tariffs for unbundled delivery service only, proposed in August 2000 and amended in October 2000 after sale of the Roseton and Danskammer plants. The company designed the proposed tariffs to increase its annual electric and gas delivery revenues by about $14.1 million (8.8%) and $3.6 million (4.7%) respectively for the year ending June 30, 2002. After full evidentiary hearings and numerous public statement hearings, a recommended decision (RD) issued April 24, 2001 called for electric and gas revenue decreases of $1.7 million and $2.1 million respectively. The RD provisionally addressed the disposition of the benefit fund, but it recommended further negotiations on that issue and others. Settlement discussions had been conducted intermittently throughout the proceedings, on notice to potentially interested parties (in compliance with 16 NYCRR 3.9). After two rounds of briefs on or opposing exceptions to the RD, negotiations resumed, and culminated in the joint proposal under review here. To allow for negotiations and Commission review of any resulting proposal, the company has waived the expiration of the statutory suspension period through October 31, 2001. The joint proposal was filed August 21, 2001 and was followed by two rounds of written statements in support or in opposition. Supporting statements and replies have been filed by Central Hudson, Staff, CPB, and MI. Statements opposing at least some elements of the joint proposal have been 3

filed by the Office of the Attorney General (OAG); Small Customer Marketer Coalition (SCMC), representing certain ESCOs; and John J. Mavretich, PRO SE. TERMS SUBMITTED PURSUANT TO THE JOINT PROPOSAL Should we adopt the terms proposed by the parties, significant results would include the following:(3) (3) For a complete statement of the joint proposal's terms, one must rely on the text of the proposal itself (Attachment B of this order). 4

REVENUE REQUIREMENT Delivery rates would be frozen for three years through June 2004,(4) at levels designed to produce (over the three years) a $2 million decrease in annual electric delivery revenues and no change in gas delivery revenues. Within certain limits, the company could use deferral accounting as a means of extending the freeze beyond three years. The implicit return on common equity would be 10.3%, assuming that the 47% equity ratio declines to a target of 45% by the third year. To the extent that the equity return for the electric or gas department exceeded 11.3%, the excess would be shared 50:50 between shareholders and customers. Excesses over 14% would be allocated entirely to customers. The rate plan would be subject to reopening if either department's equity return fell below 8.5%. The benefit fund would be applied for the following purposes (in amounts that remain to be quantified through further negotiations, if not specified here): a. $45 million (about $74 million, stated on a net-of-tax basis), for three annual refunds of about $24 million each year, to customers on a per-kWh basis; b. $42.5 million as a permanent offset to electric rate base; c. $13 million over three years for distribution system reinforcement and increased tree trimming; d. $10 million for site remediation at a former gas manufacturing site in Newburgh; e. recovery of stranded costs caused by competitive electric rate restructuring, if consistent with Commission policy to be established in other proceedings;

(4) Under orders in these proceedings extending the suspension period (issued June 25, August 29, and September 28, 2001), rates are to be set as if the new revenue allowance had taken effect July 1, 2001. 5

f. economic development initiatives (other than the present Revitalization Rate Program), to be formulated through collaboration among the parties starting November 1, 2001; and g. other items to be proposed through collaboration starting in mid-January 2002, which might include additional refunds, delivery rate mitigation after the three-year plan expires, and commodity price spike mitigation. COST ALLOCATION AND RATE DESIGN In lieu of the present fuel adjustment clause, a purchased power recovery (PPR) charge would recover energy and capacity costs that Central Hudson incurs to serve its remaining electric sales ("full service") customers. The PPR charge would be calculated separately for each class, rather than on a uniform per-kWh basis as the company had advocated.(5) A variable cost recovery (VCR) charge for all customers would reflect the costs and benefits associated with Central Hudson's remaining generating plants and independent power producer contracts. Central Hudson will have access to relatively low-cost power supplied by Dynegy, from the Roseton and Danskammer plants (under a Transition Power Agreement or TPA); and by Constellation, from NMP2 (under a Purchase Power Agreement or PPA), if NMP2 is transferred as proposed in Case 0l-E-0lll, SUPRA. Under the terms submitted in the joint proposal, TPA/PPA power would be allocated to both full service and delivery customers, based on each class's kWh as a percentage of total system kWh sales, and among customers within classes based on each customer's usage characteristics. Class electric rate decreases would range from 0.5 to 1.25 times the overall electric revenue decrease, as needed to reduce variances between class and system rates of return. For residential electric service, (5) In addition to the PPR, a variable cost recovery (VCR) charge would recover non-avoidable variable energy costs, including purchases from qualifying facilities and fuel for the company's remaining generators. 6

a. the $7.15 monthly customer charge would increase to $12.00 in three steps between now and June 2004 (moving it closer toward the estimated marginal per-customer cost that the charge is intended to recover), with offsetting decreases in other residential charges; b. the space heating discount would be eliminated; and c. time of use metering would continue to be offered. Restoration of disconnected residential electric or gas service, now billed at $10 for restoration during workdays and $25 after hours, would increase to $20 workdays and $40 after hours or, if a work crew is needed, $100 workdays and $140 after hours. CUSTOMER SERVICE Bills could be paid by credit card. The service quality incentive formulas would continue to provide potential penalties only, without affirmative rewards for good service. The maximum annual disallowance would be 25 basis points (bp) of common equity return for customer service, 25 bp for electric reliability, 6 bp for gas reliability, and 3 bp for non-emergency gas leak repair. The low-income customer program would limit the monthly gas and electric minimum charge to $5.00 for eligible customers, and require that participating customers pay at least $5.00 per month toward arrears if a local community action agency certifies their ability to pay. COMPETITIVE INITIATIVES To encourage retail access, Central Hudson would: a. offer a single-bill format; 7

b. bill customers for Independent System Operator (ISO) ancillary services, and reimburse ESCOs for ancillary charges that the ESCO pays the ISO; c. develop metrics to be used in an ESCO/marketer satisfaction incentive mechanism, including potentially an award of 10 bp on common equity, and designate an ESCO/marketer ombudsman; and d. improve the company's outreach program to enhance public understanding of competitive options, with a potential award of up to 10 bp of common equity return for a successful program. Pending the outcome of the generic rate unbundling proceeding,(6) electric backout credits would be set at $.0005 (0.5 mills) per kWh (S.C. 13), $.002/kWh (S.C. 3), $.003/kWh (S.C. 2 demand), or $.004/kWh (S.C. 1, S.C. 2 non-demand, and S.C. 6) . The gas backout credit would be $.l5/mcf. UNRESOLVED ISSUES The following matters require discussion here because the joint proposal does not expressly address them or because the parties disagree. METERING PROGRAMS As noted above, the joint proposal calls for collaborative efforts to consider disposition of benefit fund amounts not immediately addressed in today's order. According to the joint proposal, potential future uses of the fund could include competition-related initiatives that we might designate. As one such initiative which we are prepared to designate now, the company and parties should explore the development of advanced pricing and metering offerings for a broader range of its customers, including approaches (6) Case 00-M-0504, COMPETITIVE ENERGY MARKETS AND RETAIL COMPETITIVE OPPORTUNITIES, Order Directing Expedited Consideration of Rate Unbundling (issued March 29, 2001). 8

that would better enable customers to respond optimally to improved price signals. Properly implemented, this initiative could result in multiple benefits, including lower customer bills; reduced wholesale market prices due to improved demand responsiveness; and reduced costs, to the utility and other load-serving entities, of recording and transmitting customer usage and billing data. In particular, the company and parties should consider: the potential benefits resulting from enhanced pricing offerings for a broad range of customers beyond those now eligible for the company's existing real-time pricing tariffs; appropriate methods for providing customers access to the education and control technologies that may be necessary to adjust their usage in response to actual market prices; and appropriate sources of funding for enhanced metering and meter reading technologies, ideally through competitive means, to effectively record and transmit usage and billing data among customers, the utility, and competitive load-serving entities. CREDIT CARDS The joint proposal includes an uncontested provision that the company would be allowed to collect bill payments by credit card. In adopting this element of the proposal, we note that it leaves unresolved several matters of implementation. First, we seek assurances that Central Hudson will not use the availability of the credit card option as leverage to extract payments from financially troubled customers for whom the payment and interest charges are not truly affordable. Second, future determinations of the company's revenue requirement will require recognition of cost offsets, such as reductions in working capital and uncollectibles, resulting from credit card usage subsequent to the three-year rate plan. Third, the joint proposal is silent regarding a significant disagreement that arose during the litigation of this issue: whether costs associated with the credit card option should be allocated to all customers, or to some classes exclusively, or only as a service fee to those customers who actually make a credit card payment. To address these concerns, Central Hudson should provide our staff the details of any proposed 9

credit card payment program before implementing it. SERVICE QUALITY AND MARKETER SATISFACTION INCENTIVES Regarding the proposed service quality program and the program to gauge marketer satisfaction, we assume the parties recognize that we need to review the progress and results of the company's efforts periodically. Therefore, in adopting the proposed terms, we do so with the understanding that compliance with today's order will require an annual report concerning these programs. The company should consult with the Director of our Office of Consumer Education and Advocacy as to specific details of this requirement. REFUNDS VS. RATE BASE REDUCTIONS OAG advocates that we reject the joint proposal's terms insofar as they would limit the rate base reduction to $42.5 million. OAG says we should enlarge this amount by reallocating, into additional rate base offsets, the $45 million that would be used for direct customer refunds under the joint proposal. OAG notes that a rate base offset is permanent, while a refund is transitory. Therefore, OAG argues, rate base offsets would be preferable, because they would not culminate in a bill increase upon exhaustion of the benefit fund and because their permanence assures customers a larger dollar benefit over time than any finite amount of refunds. OAG adds that any benefit fund balance not specifically allocated to other purposes should be applied toward immediate rate base reductions, instead of being held in reserve pending collaborative discussions as contemplated in the joint proposal. OAG misstates the comparison between rate base reductions and refunds, and (as MI observes) misreads the RD's comments about the relative advantages of rate base offsets and refunds. The RD regarded refunds as preferable from the customer's standpoint, in view of tax considerations which nearly double the effective shortterm benefit to customers from refunds as compared with rate base offsets.(7) And the customer benefit from a refund may (7) MI's analysis, uncontradicted on the record, estimates that each dollar allocated to refunds engenders approximately a $0.40 tax savings. This benefit is unavailable in connection with amounts allocated to rate base reduction. 10

be just as permanent as the benefit of a rate base offset, because any refund is a potential earnings source for the customer. For these reasons, an immediate refund may well provide a customer greater long-term economic benefits than a rate base offset of the same dollar amount, even if (as OAG emphasizes) the rate base offset may provide a larger long-term reduction in the customer's utility bill. Finally, as Staff observes, the possible consequences of the massive rate base reduction implicit in OAG's position have not been examined on the record or addressed by the parties.(8) The proposed allocation from the benefit fund provides a rate base reduction designed to stabilize rates at a slightly reduced level, provides a similar amount in refunds, and creates the possibility of additional allocations in the future to bill mitigation and additional refunds. Notwithstanding OAG's (8) Staff, the company, and MI object to OAG's arguments, regarding this and other issues, on the ground that OAG raised them initially in the second round of statements instead of the first. OAG responds that its statement legitimately addressed the initial round of other parties' statements; the objections to OAG's statement constitute unauthorized surreplies; and OAG's statement cannot have come as a surprise to other parties, as it reflected positions advocated by OAG throughout the proceeding. The parties objecting are correct that OAG's submittal was inconsistent with the procedural schedule, which specified that the initial round would be the occasion for both supporting and opposing statements. Cases 00-E-l273 and 00-G-1274, Procedural Ruling (issued August 22, 2001) . In any event, we find OAG's points unpersuasive for reasons discussed in the accompanying text. 11

comments, we find that the proposal strikes an entirely reasonable balance among those objectives. Moreover, OAG has not shown that additional rate base reductions are preferable to using the benefit fund for competitive initiatives, bill mitigation, or other possible purposes besides refunds. The joint proposal aptly calls for further collaboration to explore such options in the future, in light of evolving circumstances which may not be clearly foreseeable now. Meanwhile, any portion of the benefit fund not used immediately will accrue interest at a rate equal to the company's pre-tax rate of return, thus providing customers the same benefit as if the amount thus reserved were a rate base offset. BACKOUT CREDITS Pending the redetermination of unbundled rates in the unbundling proceeding,(9) the joint proposal calls for backout credits of $.004 (four mills) per kWh for S.C. 1 residential and S.C. 2 general non-demand customers. SCMC advocates, instead, a credit of $.007/kWh for these classes. SCMC says the larger credit is necessary because Central Hudson, with almost no retail access penetration several years after the initial order directing its restructuring, is in a position analogous to that of other utilities years ago when we adopted more robust stimuli to "jump-start" competition simultaneously with restructuring. SCMC argues that, in allowing other utilities to offer non-volumetric, lump-sum incentive payments to retail access customers or ESCOs, our primary objective has been to stimulate competition rather than calibrate rates to reflect avoided costs. SCMC adds that Central Hudson has an equitable obligation to promote competition more vigorously, because the company has benefited from generation divestiture whose purpose was to create competition. However, we agree with Staff that the $.004/kWh provision in the joint proposal is a reasonable measure at this time, given that it will be adjusted if necessary on the basis of the record in the unbundling proceeding. Staff notes that $.004/kWh is the same temporary proxy that we also have adopted for other companies. Conversely (as Central Hudson observes), there is no evidence in this case either to rebut a $.004/kWh approximation of avoided costs or to support a $.007/kWh credit as SCMC advocates. In these circumstances, SCMC's asserted dichotomy between encouraging competition (9) Case 00-M-0504, SUPRA. 12

and gauging costs is overstated; at this moment, our most effective means of promoting competition is to establish cost-based rates on the basis of a full record in the unbundling proceeding. OAG objects in principle to any backout credits as proposed, on the ground that such credits would subsidize retail access customers at other customers' expense. We agree with Staff that OAG's argument errs in two respects. First, to the extent that the benefit fund can be used to promote competitive initiatives through measures such as backout rates, it serves the interests of customers in general and therefore cannot properly be deemed an unfair burden on full-service customers. Second, unless we adopt backout rates here (at least as an interim proxy for Central Hudson's avoided costs while awaiting more accurate cost determinations in the unbundling proceeding), it is retail access customers that will be burdened with a subsidy, insofar as they must continue to pay delivery rates that include costs related to the merchant function. Thus, rather than create subsidies as OAG alleges, the backout credit will offset them. PPR VOLATILITY OAG says the proposed purchased power recovery (PPR) mechanism should be modified so that the risk of commodity price volatility would rest "primarily with the company" rather than with low-usage customers. OAG argues that Central Hudson, as compared with its customers, can better avoid the consequences of supply shortages during a transition to competition. OAG's criticism of the PPR is inappropriate in several respects. First, the joint proposal already incorporates the results of efforts by Central Hudson to mitigate volatility, by providing customers an allocation of TPA power. Second, OAG presents no specific mechanism for carrying out its proposed risk reallocation. Third, the joint proposal already addresses OAG's concern by calling for further exploration of how the benefit fund might be used to mitigate price volatility. RETURN ON EQUITY AND NMP2 ISSUES Mr. Mavretich contends that there is only a superficial resemblance between the joint proposal's 10.3% implicit return on equity and the 10.28% 13

return allowance recommended in the RD, because the joint proposal's 100 basis point deadband would allow Central Hudson to retain any earnings up to 11.3%. Mr. Mavretich, opposed by Central Hudson and Staff, argues that the deadband should be eliminated so that 50:50 sharing between shareholders and customers would be applicable to any excess over 10.3%. This criticism of the joint proposal is a NON SEQUITUR. The proposal's various provisions are designed to create a reasonable opportunity for the company to earn a return of 10.3%, corresponding to the cost of equity as indicated by the record on which the RD relied and which Mr. Mavretich seems to invoke now. Absent any showing that adoption of the proposed terms would produce a return greater than 10.3%, we are adopting them so as to establish rates that reflect the cost of equity. The joint proposal's earnings sharing provisions are not an indication that the earned return is EXPECTED to exceed 10.3%, as Mr. Mavretich suggests, but only a mechanism to reasonably balance investor and shareholder if it does. As a more general matter, Mr. Mavretich supports this and his other criticisms of the joint proposal (noted below) by arguing that we should take into consideration Central Hudson's continuing failure to answer interrogatories regarding the long-term costs of its alleged managerial errors in connection with the NMP2 generating unit. The company responds by asserting a record of managerial success. While we would not condone the company's disregard of a discovery ruling if the issue were directly presented, here the issue is moot in two respects. First, Central Hudson is not pursuing any challenge to the Judge's discovery rulings, or to the RD's finding that the lack of interrogatory responses should be construed against the company pursuant to 16 NYCRR 5.10(1) when estimating NMP2's costs. Second, the company has abandoned its request for an allocation from the benefit fund as a reward for exemplary performance. It was that request which, in Mr. Mavretich's view, established the relevance of the history surrounding NMP2 for purposes of these proceedings. Thus, the NMP2 discovery issue does not affect our assessment of the balancing of interests in the joint proposal. (10) (10) We need not decide here whether, as Staff suggests, Mr. Mavretich's arguments about Central Hudson's NMP2 participation "are best addressed in Case 0l-E-00ll" (the proceeding to consider ownership transfer of NMP2). 14

STOCK SYMBOL Central Hudson received $2.5 million from the sale of its stock trading symbol, after its shares ceased to be publicly traded because it became a subsidiary wholly owned by a new parent company. Staff's litigating position, accepted in the RD, was that the sale proceeds should be viewed as an offset to corporate reorganization costs and that $1.0 million of the proceeds therefore should be used to reduce rate base. Under the joint proposal, we are asked to reject that approach and disregard the sale proceeds for ratemaking purposes. Mr. Mavretich opposes this resolution of the issue. Staff and the company correctly respond that Mr. Mavretich has not accurately characterized the asset in question. Contrary to his assertions, the sale of the stock symbol did not occur pursuant to provisions resembling those that governed the auction of the company's generating plants. Nor is it true that the stock symbol was a rate base item like other assets "supported through customers['] rates," as Mr. Mavretich says; and, even if it were, we have broad discretion over the ratemaking treatment of sale proceeds regardless of whether the asset has been held in rate base. In this instance, there is nothing unreasonable about the proposed allocation of the proceeds to shareholders. RELIABILITY IMPROVEMENT PROGRAM Mr. Mavretich notes that the RD, in approving an infrastructure program similar in some respects to the Reliability Improvement Program described in the joint proposal, called for a progress report after the initial expenditures. He criticizes the lack of a comparable reporting requirement in the joint proposal. Central Hudson responds that the program's efficacy would be reflected in the proposed incentive provisions related to system reliability, while Staff points out that the joint proposal expressly provides for an annual plan subject to Staff review. Thus, Mr. Mavretich's concern about the company's accountability is unfounded."(11) (11) OAG raises concerns similar to Mr. Mavretich's, regarding both the Reliability Improvement Program and the Newburgh gas manufacturing site remediation project. In both instances, however, we expect that the company's activities will be subject to ongoing Commission review. 15

DISCUSSION Subject to our determinations described above, we find that the joint proposal's sponsors have satisfied their burden of showing that adoption of the proposed terms would satisfy the Public Service Law's requirement of safe and adequate service at just and reasonable rates. They also have shown that implementation of their proposals would achieve a fair balance of interests among the parties and customers, and would produce constructive results that may not have been achievable except through a negotiated agreement. In particular, the rates we are establishing reasonably reflect Central Hudson's cost of service and protect the company's financial integrity, thus striking a fair balance between customer and investor interests; and the proposed terms ensure rate stability for at least three years beyond the end of the current rate plan. The economic benefits the company will have secured, in negotiating the prices it will pay for electric output from its former generating plants, will be allocated among customer classes in a fair and competitively neutral fashion. To encourage progress toward retail competition among energy suppliers in Central Hudson's service territory, the proposed terms specify reasonable backout credits, incentives and other mechanisms to promote cooperation between Central Hudson and ESCOs, and enhanced efforts to inform customers about their supply options. The disposition of the benefit fund serves a diverse array of customer interests, including rate stabilization and an equitable distribution of refunds among customer classes; bill mitigation; measures to attract and retain jobs; environmental remediation; backout credits and other competitive initiatives; and infrastructure reinforcement to improve service reliability. Reliability, as well as safety and service quality, also will be enhanced as a result of new performance measures and incentive mechanisms. Low-income customers in particular will benefit from new programs addressing their needs. 16

Finally, adoption of the proposed terms will accomplish these goals within the context of a rate allowance consistent with an extensive record in the litigated phase, concerning the company's revenue requirement and cost of capital. Moreover, the proposals reflect the parties' best efforts to find a reasonable resolution of issues that the RD identified as potentially productive areas for further negotiation, particularly the uses of the benefit fund and the design of cost recovery mechanisms and backout credits. CONCLUSION For the reasons stated, we find that our adoption of the joint proposal's provisions subject to the discussion above will serve the public interest and satisfy our statutory obligation to ensure safe and adequate service at just and reasonable rates pursuant to Public Service Law ss.66. We therefore will direct the company to file tariff revisions consistent with this finding. To comply with the orders issued in these proceedings June 25, August 29, and September 28, 2001, the filing should be designed to implement the tariff revisions as if they had taken effect July 1, 2001, notwithstanding the November 1, 2001 effective date specified in Order Clause 3 (below). THE COMMISSION ORDERS: 1. Subject to the foregoing discussion and the determinations and understandings set forth therein, the terms of the Joint Proposal filed in these proceedings August 21, 2001 are adopted in their entirety and are incorporated as part of this order. 2. Central Hudson Gas & Electric Corporation (the company) shall submit a written statement of unconditional acceptance of this order, within five days following the order's issuance date, signed and acknowledged by a duly authorized officer of the company. If an acceptance statement is not so filed, the adoption of the joint proposal's terms may be revoked. The acceptance statement should be filed with the Secretary of the Commission and served on the parties to these proceedings. 3. The company is directed to cancel, no later than October 31, 2001, the tariff amendments and supplements listed in Attachment A of this 17

order. The company is directed to file on not less than one day's notice, to take effect no later than November 1, 2001 on a temporary basis, such further tariff changes as are necessary to effectuate the provisions adopted in this order. The company shall serve copies of its filing upon all parties to these proceedings. Any comments on the compliance filings must be received at the Commission's offices within ten days of service of the company's proposed amendments. The amendments specified in the compliance filing shall not become effective on a permanent basis until approved by the Commission and will be subject to refund if any showing is made that the revisions are not in compliance with this order. The requirement of ss.66(12)(b) of the Public Service Law that newspaper publication be completed prior to the effective date of the proposed amendments is waived, provided that the company shall file with the Commission, not later than six weeks following the amendments' effective date, proof that a notice to the public of the changes proposed by the amendments and their effective date has been published once a week for four successive weeks in newspapers having general circulation in the areas affected by the amendments. 18

4. These proceedings are continued. By the Commission, (SIGNED) JANET HAND DEIXLER Secretary 19

ATTACHMENT B
CASE 00-E-1273 - Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations of Central Hudson Gas & Electric Corporation for Electric Service.

CASE

00-G-1274 - Proceeding on Motion of the Commission as to the Rates, Charges, Rules, and Regulations of Central Hudson Gas & Electric Corporation for Gas Service.

JOINT PROPOSAL AND JOINT PROPOSAL'S ATTACHMENTS A THROUGH I

STATE OF NEW YORK PUBLIC SERVICE COMMISSION
- - - - - - - - - - - - - - - - - - - - - - - - - - x Proceeding on Motion of the Commission as to rates, charges, rules and regulations of Central Hudson Gas & Electric Corporation for electric service; and Proceeding on Motion of the Commission as to rates, charges, rules and regulations of Central Hudson Gas & Electric Corporation for gas service - - - - - - - - - - - - - - - - - - - - - - - - - - x Case 00-G-1274 Case 00-E-l273

JOINT PROPOSAL I. INTRODUCTION This is a Joint Proposal, dated as of August 15, 2001, for the resolution of the above-captioned cases by and among the following parties and participants ("Signatories"): Central Hudson Gas & Electric Corporation ("Central Hudson" or the "Company"); the Consumer Protection Board; Multiple Intervenors; the Staff of the Department of Public Service ("Staff") and Strategic Power Management, Inc. This Joint Proposal is the product of negotiations among parties to the proceeding on due notice in accord with the Commission's Settlement Guidelines and of compromises among the Signatories. It has been made on the basis of the Conditions of the Joint Proposal described below and is intended to resolve all issues in these proceedings.

In general, both electric and gas rates are frozen at specified delivery rate revenue levels until June 30, 2004 and specifically identified amounts of delivery rate revenues are deferred from July 1, 2001 through June 30, 2002 ("Rate Year One" or "RY1") to July 1, 2003 through June 30, 2004 ("Rate Year Three" or "RY3").(1) Additional provisions address enhancements of competition in gas and electric services and establish uses and procedures for reviewing additional uses of the "Benefit Fund."(2) II. JOINT PROPOSAL A. Electric Rate Freeze: Electric delivery rates will be designed to recover $153 million in delivery revenues annually and will be frozen through June 30, 2004. B. Gas Rate Freeze: Gas delivery rates will be designed to recover $36.6 million in delivery revenues annually and will be frozen through June 30, 2004. C. Term of Electric and Gas Delivery Rate Freezes: The electric and gas delivery rate freezes are effective through June 30, 2004 and are further subject to the understandings that: 1. Nothing in this Joint Proposal or the Commission's adoption of it is intended to prevent Central Hudson from filing with the Commission requests for changes in rates to be effective (after any applicable suspension) as of July 1, 2004; 2. Rate mechanisms for the pass-through of the purchase price of electricity or gas are an integral part of this Joint Proposal. Nothing in the rate freeze provisions of this Joint Proposal is intended to preclude those mechanisms from passing through the purchase prices of electricity or gas. (1) The twelve month period ending June 30, 2003 is "Rate Year Two" or "RY2." (2) The Benefit Fund results from Central Hudson's prior rate proceeding, Case 96-E-0909. See, Opinion No. 98-14, issued June 30, 1998 and Order Adopting Terms of Settlement Subject to Modifications and Conditions, issued February 19, 1998. 2

3. Central Hudson is authorized to reopen this Joint Proposal if its achieved regulatory return on actual common equity in either its electric or gas department (or both) falls below 8.5%. D. Treatment of Litigated Issues: 1. The Signatories have agreed to levels of delivery rate revenues, which agreements are for settlement purposes only, and not necessarily on the disposition of any particular issue raised during the litigation, other than as described in this Joint Proposal. 2. The terms and provisions of this Joint Proposal apply solely to, and are binding only in the context of, the purposes and results of the mutual agreements reflected in the Signatories' settlement. None of the terms and provisions of this Joint Proposal and none of the positions taken herein by any party may be cited or relied upon by any other party in any fashion as precedent in any proceeding before the Commission, or before any other regulatory agency or any court of law for any purpose except in furtherance of the purposes and results of the Signatories' settlement. E. Income Statements 1. The Income Statements for Electric (Attachment A) and Gas (Attachment B) services that have been attached to this Joint Proposal are intended to show that the Joint Proposal is reasonable and do not necessarily represent the views of any Signatory. 2. The Income Statements attached hereto have incorporated the following items: 3

a. Return on Common Equity: An assumed return on common equity of 10.3% has been agreed to as a fall out from the agreed-to revenue requirements shown in the Income Statements. b. Equity Ratio: 47% first year, 46% second year and 45% third year. c. Cost of Long-Term Debt and Redemption Premiums: As shown in Attachment C, updated costs and amounts of long term debt issuances, including the costs of redemption, and the costs of preferred stock redemption premiums and unamortized expenses, have been employed in determining the revenue requirements shown in the attached Income Statements. Central Hudson is authorized to recover the debt redemption premiums and unamortized debt expense over the remaining life of the redeemed debt and to recover the preferred stock redemption premiums and unamortized expenses ratably over the period ending 2028. d. Rate base details have been reflected on Attachment H. e. Electric Loss Factor: The electric loss factor will be 1.0437. 4

f. Lost & Unaccounted For Gas: The factor for lost and unaccounted for gas will be 1.025. F. Agreed-to Dispositions of Specific Items and Other Conditions 1. Required Deferrals and Restorations of Electric Delivery Revenues: As shown on the attached Electric Income Statement, electric delivery revenues of $3.1 million in RY1 will be deferred for restoration in RY3 without regard for the amount of electric delivery revenues actually received in any of the RYs. The deferrals and restorations of revenues will be recognized for purposes of determining regulatory earnings and regulatory return on common equity (i.e., revenues in RY1 will be reduced by the deferred amount and RY3 revenues will be increased by the restored amount). 2. Required Utilization of Benefit Fund: a. An amount of $42.5 Million will be removed from the Benefit Fund and will be included as a credit to electric rate base for the three Rate Years. b. The credit will be applied to electric plant transmission and distribution book depreciation reserves in proportion to the relative book cost of plant in service at August 31, 2001 for such plant categories, subject to the provisions of item l3.b of this Part II. F. of this Joint Proposal. c. The $42.5 Million amount will be maintained as a rate base credit after the end of RY3, subject to other potential treatment by order of the 5

Commission in a subsequent Central Hudson electric rate case. d. This $42.5 Million rate base credit amount will be recognized in calculation of the achieved regulatory rate of return on common equity for the electric department. 3. Required Deferrals and Restorations of Gas Delivery Revenues: Gas delivery revenues of $0.9 million will be deferred in RY1 for restoration in RY3 without regard for the amount of gas delivery revenues actually received in any of the three RYs. The deferral and restoration of revenues will be recognized for purposes of determining regulatory earnings and regulatory rate of return on common equity (i.e., revenues in RY1 will be reduced by the deferred amount and RY3 revenues will be increased by the restored amount). 4. Earnings Sharing: a. There is a regulatory rate of return on common equity deadband by department between 8.5% and 11.3%. b. In the event that Central Hudson achieves a regulatory rate of return on common equity above 11.3% in either the electric or gas department, the earnings above 11.3% and up to 14.00% in such department(s) will be shared 50/50 between the Company and ratepayers. The ratepayer's portion of such earnings in the electric department will be added to the Benefit Fund and in the gas department, deferred subject to further order of the Commission. c. In the event that Central Hudson achieves a regulatory rate of return on common equity above 14.00% in either the electric or gas department, the 6

earnings above 14.00% in the electric department will be added to the Benefit Fund and in the gas department, deferred subject to further order of the Commission. The 14.00% value is subject to adjustment pursuant to Parts IX. F. and H. 5. Measurement of Achieved Regulatory Rate of Return on Common Equity for Earnings Sharing Purposes: a. Separate determinations of the achieved regulatory rate of return on common equity for gas and electric operations will be made annually, on a rate year basis. b. The achieved regulatory return on common equity will be measured by department on the basis of Central Hudson's actual capitalization for the period being measured; provided, however, that if the actual equity ratio in a given RY exceeds the applicable rate year target equity ratio (RY1: 47%; RY2: 46%; and RY3: 45%), then the target ratio for that RY will be used. c. The financial consequences of the Part VII Service Quality Mechanisms, the Part V.A.2. Gas Interruptible Sharing incentive and the Parts IX. F. and H. incentives will be excluded in determinations of regulatory rate of return on common equity. d. Within 90 days following the end of RY1, RY2 and RY3, Central Hudson 7

shall provide Staff with a computation of achieved regulatory rate of return on common equity by department for the preceding RY period. 6. Reopener: Central Hudson is authorized to file for increased rates for either the gas or electric department anytime that the respective regulatory rate of return on common equity for a trailing 12-month period, measured in the fashion used for the annual RY determination, falls below 8.5%. 7. Deferrals: a. The Company is authorized to defer the following kinds of items for recovery in the next electric or gas, as appropriate, base rate change or other Commission-ordered disposition: (1) The Company is authorized to continue its use of deferral accounting with respect to the following expenses and costs and all other expenses and costs for which Commission authorization for deferral accounting is currently effective whether by reason of Commission order or policy of general applicability or by reason of a Commission determination with specific reference to the Company: (a) Pension Expense under Statement of Financial Accounting Standards No. 87; (b) Post Employment Benefits Other than Pensions under Statement of Financial Accounting Standards No.106; 8

(c) Interest Costs on Variable Rate Debt; (d) Incremental costs of litigation regarding claims of exposure to asbestos at Company facilities; (e) Research and Development costs under the Commission's Technical Release No. 17. (2) Changes in accounting standards, subject to the understanding that this specific authority to defer is subject to such orders as the Commission may issue that provide for generic treatment of accounting practices; (3) Changes in federal or state regulations; (4) Force Majeure; and (5) Others addressed herein. b. All previously authorized uses of deferral accounting continue and shall not terminate because of the end of the term of this Joint Proposal. c. Central Hudson retains the right to petition the Commission for authorization to defer extraordinary expenditures not otherwise addressed by this Joint Proposal. 9

d. Additional Deferral Provisions Related to Changes in Federal, State or Other Tax Laws: (1) The Signatories agree that the attached Income Statements do not reflect implementation of the tax law changes resulting from the 2000 Legislative Session. Accordingly, tax differences between the prior State Tax Laws and the 2000 Legislative enactments will be deferred, in accordance with the Commission's Order of June 28, 2001 in Case 00-M-l556 for disposition as determined subsequently by the Commission. The deferral of state income taxes on earnings shall be permitted up to the sharing trigger level of 11.3%. The calculation of regulatory earnings and achieved rate of return on common equity for purposes of Parts II.F.4 and 5 shall recognize the calculation of state income tax on earnings. (2) In addition, the company is authorized to defer increases or decreases in costs related to changes in federal, state and local tax law or regulations for the period through RY 3. 8. Net deferred debit and credit balances for the electric department items shown on Attachment D-2 have been reflected in the determination of the Benefit Fund. Deferred debit and credit offsets for the gas department, using actual deferred balances at June 30, 2001 for the deferred items listed on Attachment E, will be subject to 10

balance sheet offset accounting to the extent necessary to achieve a net of tax offset of zero. 9. Central Hudson is authorized to record electric or gas revenue amounts post-June 30, 2004 subject to the following: a. The annual amount recorded by department may not exceed the lesser of the revenue requirement deficiency for RY3 shown on Attachment A or B, as appropriate, or the amount of revenues needed by department to provide a regulatory rate of return on common equity of 10.5% for the 12-month "RY" periods subsequent to June 30, 2004. b. Estimated amounts of revenue will be recorded on a monthly basis and adjusted to the final amount within the above constraints in the last month of the appropriate "RY" period. c. The amount of revenues that are recorded may be based on the measurement of earnings for periods of time that are less than a twelve month RY period. Earnings for partial periods will be calculated by determining the level of earnings for the twelve month period ending on the date new rates are established and comparing it to the level of earnings required to provide a 10.5% equity return. If a deficiency in earnings results, the amount of revenues recorded for the partial period will be determined by the ratio of sales for the partial period to the sales for the twelve month period ending as of the date new 11

rates are established. d. Central Hudson will submit reports showing any revenues recorded under this provision, and the measurement of earnings used in the calculation of the revenues recorded, for each annual period beyond June 30, 2004 or period of time ending on the date new rates take effect. These reports will be submitted no later than 90 days from the end each annual period or the date when new rates take effect. e. Central Hudson may charge the electric department amounts accrued hereunder each month against the Benefit Fund, subject to a subsequent final Order by the Commission directing otherwise, in which event Central Hudson shall be deemed to have fully reserved its rights and nothing in this Joint Proposal or Central Hudson's participation in it shall be deemed to prejudice Central Hudson's position. f. Central Hudson may record a regulatory asset for the gas department amounts accrued hereunder each month. g. This authority continues until the earlier of June 30, 2006 or, with respect to electric department revenue deferrals, the effective date of new base electric rates as a result of a general electric rate filing by Central Hudson and, with respect to gas department revenue deferrals, the effective date of new base gas rates as a 12

result of a general gas rate filing by Central Hudson. 10. Common Cost Allocation Factor: 85% electric, 15% gas. 11. Payment By Credit Card: The Company is authorized, but not required, to accept payments for service by credit card from residential and small commercial customers. 12. The Company's accounting for the sale of its stock symbol is affirmed. 13. Depreciation: a. The Company's electric, gas and common depreciation studies and methods as presented in its initial filing are accepted, except for depreciation of Gas Distribution Mains, which will be based on an Average Service Life of 85 years and a net salvage factor of negative 60% (actual negative net salvage in excess of negative 60% will be charged to maintenance expense). b. A method will be developed for reducing, in the next rate case after the end of the term hereof, the electric book depreciation reserve so that it exceeds the theoretical depreciation reserve by no more than 10 percent. Any Benefit Fund amounts transferred to the book depreciation reserve will be excluded from the measurement of the book to theoretical reserve ratio. 14. The amounts shown on Attachment A, B and H will be used as the rate allowances for purposes of revenue matching accounting or other deferral purposes as appropriate. 13

III. ELECTRIC ISSUES A. The Company will implement a Reliability Improvement Program, subject to the following conditions: 1. The Program will be funded up to a total of $20 Million (pre-tax) over the period ending June 30, 2004. 2. Funding will be from the Benefit Fund. 3. Capital amounts funded will be removed from rate base and treated as Contributions in Aid of Construction, and as a result will carry a book balance of zero. 4. Expense amounts related to the capital projects are included in the $20 Million allowance and will also be funded from the Benefit Fund. 5. Outside contractors and labor will be used for the Program, and none of the Benefit Fund-will be allocated to Company labor expense. 6. Plans: a. An Annual Plan will be developed and reviewed with Staff before the start of RY2 for the remaining two years of the program. b. Central Hudson will review RY1 projects with Staff on an expedited basis following approval of this Joint Proposal. 14

B. The outcomes of generic Commission proceedings such as the Unbundling, Competitive Markets or Stand-by Rates Proceedings, and any others during the term of this Joint Proposal that may affect implementation of electric competition will be reflected prospectively, subject to the understanding that any stranded or similar costs resulting from any such proceedings, as determined by the Commission, may be recovered out of the Benefit Fund to the extent not inconsistent with any applicable Commission Order or, if recovery out of the Benefit Fund is inconsistent with the applicable Commission Order, Central Hudson shall be deemed to have fully reserved its rights and nothing in this Joint Proposal or Central Hudson's participation in it shall be deemed to prejudice Central Hudson's position. Nothing in this Joint Proposal shall be interpreted to preclude Central Hudson from participating in any Commission proceeding in any manner it may deem advisable. IV. ELECTRIC RATE DESIGN A. Unbundling: The revenue allocation, as shown in Attachment F will be utilized to design rates, as amplified below. B. Purchased Power Recovery ("PPR"): 1. Mechanism will vary by class; 2. Recover all commodity related costs using market prices; 15

3. Use bimonthly averaging for bimonthly billed customers; 4. Include uncollectibles & working capital costs; and 5. Be determined and reconciled monthly. C. Variable Cost Recovery ("VCR"): This mechanism will be reconciled monthly and will recover the costs of ancillary services and the variable costs and benefits of the Company's remaining generating facilities. D. Central Hudson has entered into a Transition Power Agreement ("TPA") with Dynegy that provides for the purchase and sale of specified amounts of power to Central Hudson. The TPA was approved by the Commission in an Order issued December 20, 2000 in Case 96-E-0909. In addition, Central Hudson has entered into a Purchase Power Agreement ("PPA") with Constellation that provides for the purchase and sale of specified portions of the output of Nine Mile Point 2 ("NMP2"). The PPA has been filed with the Commission in Case 01-E-0111 and that Case is currently pending before the Commission. The prices in the TPA and PPA will not necessarily equal the market prices and the differences are referred to herein as "TPA and PPA Benefits." The TPA and PPA Benefits will be apportioned to full service and delivery customers as follows: 16

1. TPA and PPA Benefits will be apportioned among service classes on the basis of each class's sales (kWh) as a portion of the total system sales (kWh) in a given month; 2. Within a given class, TPA and PPA Benefits will be apportioned among customers on the basis of relative usage in a month as a portion of the total class usage; 3. Central Hudson shall have no obligation, other than as specifically provided for herein, to track the amount of any TPA and PPA Benefits by individual customer. In Service Classifications 3 and 13, the TPA and PPA Benefits will be subject to the constraints that: (1) The total TPA and PPA Benefits credited to a customer will not exceed the total Central Hudson delivery charges for that customer in a billing period; and (2) Any TPA and PPA Benefits not received by a customer due to operation of the above constraint will be reallocated to that customer in the subsequent billing period. In any such reallocation, the constraint that the total TPA and PPA Benefits not exceed the total Central Hudson delivery charges in the billing period will continue to be applicable and may entail reallocation to subsequent billing periods. 17

E. Billing Format: Separate line items will be provided for the following items: 1. PPR; 2. PPR under/over recovery; 3. VCR; 4. TPA/PPA Benefits; and 5. System Benefit Charge ("SBC"). F. Cost of Service Study & Revenue Allocation 1. The rate changes will be allocated as follows: a. Service classifications which have a rate of return below the lower tolerance level of 85% of the system average would receive a minimum decrease of 0.5 times the average overall decrease. b. Service classifications which have a rate of return exceeding the upper tolerance of 115% of the system average would receive a maximum decrease of 1.25 times the average overall decrease. c. Application of these maximum and minimum decreases results in revenues different from the rate decrease revenue. This difference is allocated to the unconstrained decreases for S.C. 1, S.C. 2, S.C. 5 and S.C. 13 Transmission. 2. Peaker & Hydro Costs: The investment in combustion turbine production plant is classified as demand-related. The investment in hydroelectric production plant is classified as energy-related. 3. The marginal customer cost for S.C. 1 is $23.67 per month and for S.C. 2 is $32.79 per month. 4. Rate design for S.C. 13 will include flat energy charges, a single basic monthly demand charge and a $500/month customer charge. 18

G. Customer Charges 1. S.C.l residential customer charges will increase from the current $7.15 to $9.75 for RY1 and RY2 and to $11.50 after RY2 until June 29, 2004. On June 30, 2004 the customer charge will be increased to $12.00. 2. S.C.2 small commercial (non-demand) customer charge will increase from the current $6.25 to $12 for RY1 to $13 for RY2 and to $14 for RY3. 3. The above changes will be made on a revenue neutral basis within the affected customer classes. 4. The remaining monthly customer charges are as follows: S.C. 2 Secondary Demand: $20.00; S.C. 2 Primary Demand: $80.00; S.C. 3: $250 and S.C. 6: $12.00. 5. All customer charges agreed to herein are without prejudice to the filing by the Company of superseding rate change filings, effective after June 30, 2004. H. Time of Use ("TOU") & Space Heating Rates 1. Continue offering S.C. 6 residential TOU. 2. Elimination of S.C. 12 commercial TOU. 3. Elimination of S.C. 2 heating discount. 19

I. Charges for restoration of service to the same customer at the same meter location within twelve months of discontinuation of service will be as shown below.
During Normal Work Hours: Without Line or Gas Crew With Line or Gas Crew Outside Normal Work Hours: Without Line or Gas Crew With Line or Gas Crew $ 40.00 $140.00 $ 20.00 $100.00

J. Treatment of Central Hudson's NMP2 Costs: 1. The existing ratemaking for Central Hudson's NMP2 costs, approved by the Commission effective February 1, 2001 includes two components: a Competitive Transition Charge ("CTC") (reflecting property taxes and certain O&M costs), and variable cost recovery through the existing ESC. 2. Upon the effectiveness of the rates produced by this Joint Proposal, Central Hudson's NMP2 costs will be recovered through three components: a CTC, the PPR and the VCR. a. Until such time as the Commission approves the pending PSL ss.70 asset transfer and the closing for Central Hudson's NMP2 interests takes place: (1) the CTC will recover NMP2 property tax and fixed O&M elements (hydro and GT costs will be recovered through base rates); 20

(2) The PPR will recover the market price of Central Hudson's share of the power produced at NMP2; and (3) The VCR will recover transmission costs, ISO charges, and recover/pass back the difference between the market price and the variable production costs of Central Hudson's share of NMP2 output. b. After the Commission approves the pending PSL ss.70 asset transfer and the closing for Central Hudson's NMP2 interests takes place: (1) The CTC will cease. (2) The PPR will reflect the Market Price of Central Hudson's share of the power produced at NMP2 under the NMP2 PPA. (3) The VCR will recover transmission costs and ISO charges. (4) The TPA/PPA Benefits will recover/pass back the difference between the market price and the costs of the PPA for Central Hudson's share of NMP2 output. V. GAS RATE ISSUES A. Revenue Sharing 1. The imputation for interruptible and electric generation sales is set at $1,900,000. 21

2. Accounting: a. Each August, the Company will reconcile the annual IT profit received in the prior RY. Profit realized by the Company pursuant to this mechanism will be excluded from any determination of achieved regulatory rate of return on common equity. (1) If the Company's IT profits exceed the annual imputation of $1,900,000, the sharing mechanism will be as follows: (a) From $1,900,000 up to $2,299,999:

Profit will be shared in an 85% customer/15% shareholder ratio; (b) Profit above $2,300,000 will be shared in an 80% customer/20% shareholder ratio. (2) If the Company's IT profits are less than the annual imputation of $1,900,000, the sharing mechanism will be as follows: (a) From $0 up to $1,499,999 in IT revenue, the short-fall below $1,900,000 will be borne by the Company; (b) From $1,500,000 up to $1,899,999 the short-fall below $1,900,000 will be shared in an 15% shareholder/85% customer ratio. b. In addition, the Company shall be permitted to attempt to minimize 22

potential monthly short-falls or over collections through the Gas Supply Charge ("GSC"): (1) Each month the Company will compare the profit received from customers taking service under Service Class NOS. 8, 9 and 14 ("IT Profit": to $158,333 (1/12 of the annual imputation of $1,900,000), and (2) If the IT Profit differs significantly from the monthly imputation, the Company may refund or surcharge, as appropriate, through the GSC in a subsequent month. B. Agreed-to Dispositions of Specific Gas Items: 1. Gas Manufacturing Site Remediation a. Write off Newburgh site costs from Benefit Fund. b. Case 95-M-0874 requirements remain in force for Newburgh site. 2. The prudence of the Company's gas purchasing policies and load management practices prior to the date of this Joint proposal have been reviewed and have not been challenged in these proceedings. 23

VI. GAS RATE DESIGN A. Unbundling and GSC 1. The GSC mechanism will recover all commodity related and upstream pipeline demand costs. 2. The GSC will be determined monthly and reconciled annually. 3. The GSC will include uncollectibles, working capital and carrying costs on cash working capital requirements and materials and supplies. B. S.C. 9 Customers Eligible for S.C. 11: The Company's current rate design methodology, which uses the load factors of existing customers to establish the price caps, will remain in effect. C. Minimum Charge and Tail Blocks: The minimum charges in firm Service Classification Nos. 1,2,6,12 and 13 are increased to $7.20. To offset the increase in the minimum charge, the second block of S.C.1 and 12 has been reduced and the third block of S.C. 2, 6 and 13 has been reduced. No rate changes are made to current tail block prices. 24

VII. SERVICE QUALITY MECHANISMS A. Customer Service Quality Program: 1. Twenty-five basis point total potential penalty on combined Company basis, per calendar year commencing January 1, 2002. a. Of the twenty-five basis point total, twelve and one-half basis points are for the PSC Complaint Rate (12.5 basis points) and b. twelve and one-half basis points (12.5 basis points) are for the Customer Satisfaction Index ("CSI"). 2. PSC Complaint Rate: a. Targets and penalties for the PSC Complaint Rate (chargeable complaints per 100,000 customers, based on a 12-month rolling average at the end of each performance period) follow: 25

Penalty To a PSC Basis From a PSC Complaint Complaint Points Rate of Rate of ---------------------------------------------------None 0 <6.0 2.5 (is greater than or equal to) 6.0 <6.5 5.0 (is greater than or equal to) 6.5 <7.0 7.5 (is greater than or equal to) 7.0 <7.5 10.0 (is greater than or equal to) 7.5 <8.0 12.5 (is greater than or equal to) 8.0

b. The PSC Complaint Rates set forth above are predicated upon existing PSC practices and procedures for chargeable complaints per 100,000 customers. In the event of a change to those practices and procedures, the Signatories will discuss in good faith whether alteration of the above target and penalty levels are appropriate to maintain the incentive to the Company at levels comparable to those above. Any disputes will be referred to the Commission. 3. CSI: a. The CSI will be based on the calculations performed by Central Hudson consistent with the procedures adopted as a result of Case 96-E-0909. b. Targets and penalties for the CSI follow: 26

Basis Point Penalty CHGE CSI From To ------------------------------------------------None (is greater than or equal to) 83 NA 3.125 (is greater than or equal to) 82 <83 6.25 (is greater than or equal to) 8l <82 9.375 (is greater than or equal to) 80 <81 12.5 Below 80

4. For purposes of this Joint Proposal, the performance periods are the calendar years ending December 31, 2002 and 2003 and the six months ending June 30, 2004 (for which the basis point penalties will be penalties will be halved). 5. The "Appointments Kept" incentive remains at $20 per missed appointment. B. Electric Reliability 1. Twenty-five (25) basis point total potential penalty on electric operations, per calendar year commencing January
1, 2002. a. Of the twenty-five basis point total, twelve and one-half basis points (12.5 basis points) are for SAIFI and twelve and one-half basis points (12.5 basis points) are for CAIDI.

b.

2.

SAIFI indices and penalties, as shown below: >1.10 >1.20 6.25 basis point penalty 12.5 basis point penalty

3.

CAIDI indices and penalties, as shown below: >2.10 >2.20 6.25 basis point penalty 12.5 basis point penalty

27

4. The SAIFI and CAIDI indices are based on electric service interruptions that are not related to major storms. a. The initial SAIFI index levels will be reduced by 2% from 2002 to 2003 and by 4% from 2003 to 2004. b. The Company may petition for appropriate adjustment to the final CAIDI and SAIFI indices for each performance period to recognize the effects, if any, of Outage Management System ("OMS") implementation or interventions by the ISO or similar authority causing service interruptions. 5. For purposes of this Joint Proposal, the performance periods are the calendar years ending December 31, 2002 and 2003 and the six months ending June 30, 2004 (for which the basis point penalties will be halved). 6. Penalties will be calculated with respect to electric operations. C. Gas Reliability 1. Number of One-Call Ticket Mis-marks per Thousand One Call Tickets. 28

Basis Point From To Penalty Mis-marks/1000 of Mis-marks/1000 of -------------------------------------------------------Zero 0 1.25 2 1.26 1.45 3 1.46 1.65 6 1.66 or higher

2. Penalties will be calculated with respect to gas operations. Mis-marks will be determined based on Central Hudson's current procedures, including recognition of the Tolerance Zone as defined in 16 NYCRR Part 7531.2(t). 3. The measurement periods will be the calendar years ending December 31, 2002 and 2003 and the six months ending June 30, 2004. The basis point penalty applicable to the six month period ending June 30, 2004 will be one-half of that set forth in the above table. D. Gas Leak Management: 1. Applicable to Type 3 leaks only; 2. Penalty-only plan over the three year term. No penalty for Type 3 leak inventory levels at or below 362 at December 31, 2002, 337 at December 31, 2003 or 325 at June 30, 2004 or in any calendar year in which 140 or more Type 3 leak repairs are completed. In addition, no 29

penalty will be applicable to the six months ending June 30, 2004 if 70 or more Type 3 leak repairs are completed in that time period. 3. A penalty of 3 basis points is applicable to gas operations in any calendar year in which 140 Type 3 leak repairs are not completed and the specified Type 3 inventory level is not achieved (362 at Y.E. 2002 or 337 at Y.E. 2003). A penalty of 1.5 basis points is applicable to gas operations in the six months ending June 30, 2004 if 70 Type 3 leak repairs are not completed and the specified Type 3 inventory level (325) is not achieved. 4. If, in any year during the term of this Joint Proposal the target level for Type 3 leak inventory is not met, but a penalty is not due because 140 Type 3 leak repairs were completed, the leak inventory target level for the subsequent year shall be 25 less than the actual ending inventory level for that prior period. E. Central Hudson will, by March 31, 2003 and 2004 and by September 30, 2004, file a report or reports on its performance under each of the above incentive programs during the prior performance period, with the format and contents to be developed in collaboration, commencing on or about November 1, 2001, between the Company and Staff. F. The Service Quality Incentive Plan of Case 96-E-0909 is extended 30

from July 1, 2001 to and including December 31, 2001. VIII. LOW INCOME PROGRAM A. The Company will implement a Low Income Program consistent with Attachment G. B. The costs of the program, funded out of the revenue requirements, will be limited to the expense allowances shown on Attachments A and B. In the event that the costs of the program differ from those levels, the difference will be deferred and, after review, 1. Any electric shortfall will be added to the Benefit Fund and any gas shortfall will be returned to customers through the GSC and; 2. Any electric excess will be recovered from the Benefit Fund and any gas EXCESS will be recovered through the GSC. C. Commencing on or about November 1, 2001, the Company and Staff shall collaborate in the development of any program reporting requirements, with the Commission resolving any disputes over those requirements. IX. COMPETITIVE ISSUES A. Consolidated Bills will be made available per the May 18, 2001 31

Billing Proceeding Order. B. Single Bill: Central Hudson will pursue offering a Single Bill using the Rate Ready format. In order to utilize this option, each ESCO OR marketer must provide Central Hudson monthly with the Central Hudson customer account number and a billing rate per kWh or CCF for each customer in sufficient time in advance (minimum period to BE established) of the billing dates set forth on Central Hudson's web site. Central Hudson will comply with the criteria established in the Billing Proceeding Order and ED1 Proceeding related to single bills. C. Ancillary Services: The Company will bill all delivery customers for ancillary services commencing three months after Commission approval of this Joint Proposal. This non-by-passable charge will be collected from customers through the Variable Cost Recovery factor. Central Hudson will reimburse ESCOs for ancillary service charges incurred to serve Central Hudson load. 1. Each ESCO serving load in Central Hudson's retail access program must provide the Company with a copy of its NYISO bill which identifies the ancillary services for the ESCO's Central Hudson load served (PTID) within a day of billing by the NYISO. The invoice provided by the ESCO must detail the load (kWh), rate for each service and total amount requested for reimbursement. 32

2. Bills and credits issued by the NYISO to the ESCO for prior periods must also be provided to Central Hudson in the month received by the ESCO. Central Hudson will be authorized to collect all such amounts through its VCR. Reimbursement to ESCOs by Central Hudson for ancillary service charges will be made prior to the date ESCOs are required to pay the NYISO for such charges. 3. The Company reserves the right to file a petition with the Commission to modify this process, including potentially terminating billing or reimbursing ESCOs for NYISO ancillary services. D. Electric Back Out Credits: Credit levels would be set at 0.5 mills per kWh for S.C. 13 customers; 2.0 mills per kWh for S.C. 3 customers; 3.0 mills per kWh for S.C. 2 demand customers; and 4 mills per kWh for S.C. 2 non-demand, S.C. 6 and S.C. 1 customers pending the outcome of the Unbundling Proceeding and are subject to being superseded by the Unbundling Proceeding as provided for in Part III.B. hereof. Prior to that time, the cost of the credits will be recovered from the Benefit Fund, subject to a penetration limit of 20% of electric customers. If it appears likely that the 20% penetration level will be exceeded, the penetration level and recovery mechanism will be reviewed. E. Gas Merchant Back Out Credit: The gas merchant function back-out credit will be set at $.15 per mCf pending the outcome of the Unbundling Proceeding, and is subject to being superceded by the Unbundling Proceeding as provided for in Part III.B hereof. Prior to that 33

time, the cost of the credit will be recovered through the GSC, subject to a penetration limit of 20% of gas customers. If it appears likely that the 20% penetration level will be exceeded, the penetration level and recovery mechanism will be reviewed. F. ESCO & Marketer Satisfaction Mechanism 1. ESCO/Marketer Satisfaction Survey: After consultation between Staff and the Company, a survey will be developed as a baseline for an incentive mechanism. 2. The survey metrics would include the performance of the Company in satisfying the terms of the UBP and other operational arrangements (e.g., GTOP) between it and ESCOs (electric) and marketers (gas) . The survey should include relevant questions for both ESCOs and gas marketers. 3. The survey would be implemented on an annual basis by an objective third party selected after consultation commencing on or about November 1, 2001 between Staff and the Company. 4. Prior to implementation of the survey, Staff and the Company will agree to a threshold number of participating marketers as a basis for implementation of an incentive mechanism. If the threshold number of marketers participate, an incentive allowing the Company to receive up to 10 basis points of earnings in excess of 11.3% on a combined 34

Company basis will be implemented after the baseline results are available. In this event, the overall earnings cap will also be increased by ten basis points. 5. Once the results of the satisfaction survey are available, the company will have 60 days to report to Staff and interested parties on how it plans to address marketer concerns, if any, that were expressed in the survey. G. The Company will consult with Staff concerning the suitability of potential aggregation initiatives within the Central Hudson service territory, subject to the funding provisions of Part X.G. H. Electric and Gas Outreach and Education Mechanisms 1. Improvements in outreach and education (O&E), to increase customer awareness and understanding of energy competition, will be measured by using Central Hudson's existing residential survey. 2. The survey will be enhanced for better measurement of awareness and understanding, according to a list of criteria that will be established after consultation commencing on or about November 1, 2001 between the Company and Staff. A method to evaluate the awareness and understanding of energy competition among small commercial customers will be established. 35

3. An incentive allowing the Company to receive up to 10 basis points of earnings in excess of 11.3% on a combined company basis will be implemented, based on criteria, developed through consultation commencing on or about November 1, 2001 between the Company and Staff, for measuring improvements in customer awareness. In this event, the overall earnings cap will be increased by 10 basis points. I. Small Customer Aggregation: The potential funding of aggregation initiatives will be considered in the Benefit Fund Review process. J. ESCO/marketer Ombudsman: The company will designate a vice-president level ombudsman to address ESCO/marketers' unresolved concerns and serve as a liaison with marketers. X. BENEFIT FUND A. The total amount of the Benefit Fund is currently estimated at $164 million, including an assumed $36.5 million in net gain from a sale of NMP2, or $127.5 Million excluding the estimated NMP2 gain. The components have been shown in Attachment D-l. B. The Signatories have agreed upon the following general approach: Allocate a portion of the fund to "Identified Uses" and reserve the 36

remainder, future NMP2 gain and any unutilized portion of the Identified Uses to annual collaborations. The Identified Uses are further defined as "Quantified Identified Uses" and "Non-Quantified Identified Uses." C. The "Quantified Identified Uses" of the Benefit Fund are (net of tax): 1. Rate base offset - $42.5 Million; 2. Gas site remediation - $10 Million; 3. Reliability Improvement Program - $13 Million; and 4. Refunds: $l5 Million per RY. D. The Non-Quantified Identified Uses of the Benefit Fund are: 1. Other items provided for in this Joint Proposal, including possible additional customer refunds, offset to potential post-June 30, 2004 electric rate increases, back out credits and future stranded or similar costs subject to the provisions of Part III.B hereof; and 2. Economic Development - to be developed and dispensed in accordance with below discussion. E. Refunds: The total net of tax amounts for the three RYs of $45 Million, as shown on Attachment D-l, will be refunded to customers through a per kWh credit, commencing in the month following the Commission's approval of this Joint Proposal. The credit will be developed from the total RY billing units, prorated for the total number of months until 37

June 30, 2004 following the Commission's approval of this Joint Proposal. Central Hudson will track and reconcile the amounts credited. In the event that the entire $45 Million is not credited prior to June 30, 2004, the un-dispensed credit will be carried forward subject to further order of the Commission. F. A carrying charge at an annual rate equal to the pretax-rate of return set forth on Attachment C will be applied monthly to the net remaining balance in the Benefit Fund. G. Other Potential Uses of Net Benefit Fund 1. Potential uses include possible future use for price spike mitigation; for small customer aggregation efforts; and to fund such other competitive-related initiatives as the Commission may approve. 2. These uses would be addressed in the Benefit Fund Review discussed below. 3. Benefit Fund Review Process: On or about January 15, 2002, and 2003 a collaborative effort will commence on the use of the remaining Benefit Pool amounts not otherwise allocated to specific purposes. The collaborative will be completed and reported to the Commission by April 1, 2002 and 2003. The Commission will expedite its review of the Collaborative Report (and any dissents). 38

H. Economic Development 1. An Economic Development Program will be established and funded from the Benefit Pool in accordance with the procedure set forth below. The program's purposes would be to encourage the relocation, growth, expansion, and retention of business customers in the Company's service territory and include consideration of any situations in which reductions in employers' substation costs will lead to employee retention. 2. The administration of the program would be facilitated by Staff, through consultation commencing on or about November 1, 2001 among the Company, the Empire State Development Authority, local government officials and interested parties. Tariff provisions, guidelines and procedures would be developed as appropriate in that consultation and would be submitted to the Commission for approval. 3. Existing electric programs will be terminated with the exception of the Revitalization Rate. 4. Revitalization Rate: a. Current electric customers will receive their existing discounts until the time set for expiration in their existing agreements. 39

b. For new customers, a rate discount would be offered on the delivery rate for those who meet the existing program's criteria. c. The discounts would be set at percentage levels comparable to those in the existing program, but applied to the delivery prices. d. The discounts will be funded from the Benefit Fund. e. Customers receiving the rate would be contacted in writing 6 months prior to the end of their Revitalization Rate term informing them of the expiration and providing them with a contact at the Company to answer any questions or concerns. XI. CONDITIONS OF JOINT PROPOSAL A. This Joint Proposal is intended by the Signatories to be a complete resolution of all issues in Cases 00-E-1273 and 00-G-l274. Each Signatory is obliged to support the Joint Proposal before the Commission. The Signatories to the Joint Proposal agree that the provisions of the Joint Proposal are, in aggregate, a reasonable resolution of each of the proceedings. 40

B. It is understood that each provision hereof is in consideration and support of all the other provisions, and each Signatory has expressly conditioned its support upon the acceptance of this Joint Proposal in its entirety by the Commission. In the event that the Commission proposes to alter any provision of the Joint Proposal, no Signatory has any further obligation relative to the Joint Proposal other than the obligation to discuss in good faith with the other Signatories whether any such alteration is acceptable to it. In addition, Staff will make its best efforts to present to the Commission by September 25, 2001, the Company's Petition of May, 2001, as updated, in Case 01-M-0323. C. In the event that the Commission alters any provision of the Joint Proposal, each Signatory will be deemed to have fully reserved its rights to contest the altered Joint Proposal, and any such alteration. In the event that the Commission fails to adopt this Joint Proposal according to its terms, then each Signatory shall be free to pursue its respective positions in this proceeding, without prejudice, upon reasonable notice to the other Signatories. This Joint Proposal is an integrated whole, with each provision in consideration for, in support of, and dependent on the others. Thus, if the Commission does not approve this Joint Proposal in its entirety without modification, each of the Signatories reserves the right to withdraw its participation and support by serving written notice on the Commission and the other Signatories and, if necessary, to litigate, without prejudice, 41

any or all issues as to which such signatory agreed in this Joint Proposal; in such event, any such Signatory shall not be bound by the provisions of this Proposal, as executed or as modified. D. In the event of any disagreement over the interpretation of this Proposal or the implementation of any of the provisions hereof, which cannot be resolved informally among the Signatories, such disagreement shall be resolved in the following manner: The Signatories shall promptly convene a conference and in good faith shall attempt to resolve such disagreement. If any such disagreement cannot be resolved by the Signatories, a Signatory may petition the Commission for relief on a disputed matter. E. This Joint Proposal represents a negotiated agreement and settlement and, except as otherwise expressly stated herein, none of the Signatories shall be deemed to have approved, agreed to, or consented to any principle, methodology, or interpretation of law underlying or supposed to underlie any provision hereof, and this Joint Proposal shall not be cited or relied upon with respect to any matters other than those specifically addressed herein. F. The Signatories recognize that certain provisions hereof require that actions be taken in the future to effectuate fully the agreements and compromises set forth in this Joint Proposal. Accordingly, each Signatory agrees to cooperate with each other Signatory in GOOD faith in taking such actions. G. Survival of Conditions: All reservations of rights of any Signatory (including, but not limited to, Parts XI.A. through XI.F., inclusive), the continuation of deferral accounting authority, the post-June 42

30, 2004 revenue deferral provisions, the provision concerning development of a method for reducing the book to theoretical depreciation reserve, and the Benefit Fund provisions shall survive the June 30, 2004 term of this Joint Proposal. H. The Supplemental Environmental Assessment Form attached hereto as Appendix I accurately describes the potential environmental impacts, if any, that could result from implementation of the terms of this Joint Proposal, and the Commissions' determination of significance regarding this Joint Proposal should be the adoption of a negative declaration. I. All titles, subject headings, section titles and similar items are provided for the purpose of reference and convenience only and are not intended to affect the meaning, content or interpretation of this Joint Proposal. J. The Commission reserves the authority to act on the level of the company's base electric and gas rates in the event of unforeseen circumstances that, in the Commission's opinion, have such a substantial impact on the range of earnings levels or equity costs envisioned by this Joint Proposal as to render the company's return unreasonable or insufficient for the provision of safe and adequate service at just and reasonable rates and in the event that the Commission exercises such authority as it possesses in that regard, each Signatory reserves its rights and no Signatory shall be bound or prejudiced by its entry into, or performance under, this Joint Proposal. K. Submission of Settlement: This Joint Proposal is being executed 43

in counterpart originals and shall be binding on each Signatory. Each person executing this Joint Proposal represents by his or her signature that he or she has full authority to bind his or her principal. The Signatories hereto agree to submit this Joint Proposal to the Commission and individually to support and request adoption by the Commission of their mutual settlement as set forth herein. WHEREFORE, this Joint Proposal has been agreed to by and among each of the following, who, by its signature, each represents that it is fully authorized to execute this Joint Proposal and, if executing this Joint Proposal in a representative capacity, that it is fully authorized to execute it on behalf of its principals. 44

SIGNATURE PAGE The undersigned party to Public Service Commission Case Nos. 00-E-1273 and 00-G-1274 has participated in the negotiations among the parties which led to the Joint Proposal dated August 15, 2001 and agrees to the provisions of such Joint Proposal. Central Hudson Gas & Electric Corporation
By: /s/ ARTHUR R. UPRIGHT -----------------------------------------Arthur R. Upright

Dated: August 15, 2001

SIGNATURE PAGE THE UNDERSIGNED PARTY TO PUBLIC SERVICE COMMISSION CASE NOS. 00-E-1273 AND 00G-1274 HAS PARTICIPATED IN THE NEGOTIATIONS AMONG THE PARTIES WHICH LED TO THE JOINT PROPOSAL DATED AUGUST 15, 2001 AND AGREES TO THE PROVISIONS OF SUCH JOINT PROPOSAL. Consumer Protection Board
By: /s/ C. ADRIENNE RHODES ---------------------C. Adrienne Rhodes Dated: August 17, 2001

SIGNATURE PAGE The undersigned party to Public Service Commission Case Nos. 00-E-1273 and 00-G-l274 has participated in the negotiations among the parties which led to the Joint Proposal dated August 15, 2001 and agrees to the provisions of such Joint Proposal. Multiple Intervenors
By: /s/ MICHAEL B. MAGER ---------------------------Michael B. Mager, Esq. Couch White, LLP Attorneys for Multiple Intervenors

Dated: August 17, 2001

SIGNATURE PAGE The undersigned party to Public Service Commission Case Nos. 00-E-l273 and 00-G-1274 has participated in the negotiations among the parties which led to the Joint Proposal dated August 15, 2001 and agrees to the provisions of such Joint Proposal. Staff of the Department of Public Service
By: /s/ LEONARD VAN RYN -------------------------------------Leonard Van Ryn Dated: August 20, 2001

SIGNATURE PAGE The undersigned party to Public Service Commission Case Nos. 00-E-l273 and 00-G-l274 has participated in the negotiations among the parties which led to the Joint Proposal dated August 15, 2001 and agrees to the provisions of such Joint Proposal. Strategic Power Management, Inc.
By: /s/ DANIEL P. DUTHIE ---------------------------------Daniel P. Duthie Vice President and General Counsel Dated:August 16, 2001

LIST OF ATTACHMENTS
1. 2. 3. Attachment A: Attachment B: Attachment C: Electric Income Statements Gas Income Statements Cost of Capital, Debt and Preferred Redemption Costs and Related Expenses

4. 5.

Attachment D-l: Estimate of Benefit Fund Balance Attachment D-2: Electric Department Deferred Items Included on Attachment D-l Attachment E: Gas Department Deferred Items for Balance Sheet Offset Electric Department Revenue Allocation Low Income Program Rate Base Details, Gas and Electric Supplemental Environmental Assessment Form

6.

7. 8. 9. 10.

Attachment F: Attachment G: Attachment H: Attachment I:

CASES 00-E-1273 and 00-G-1274

ATTACHMENT A

Filing by: CENTRAL HUDSON GAS & ELECTRIC CORPORATION Amendments to Schedule P.S.C. No. 15 - Electricity Original Leaf No. 206.1 First Revised Leaves Nos. 4, 5, 14, 94, 104, 105, 106, 107, 108, 123, 124, 136, 164, 165, 168, 169, 170, 171, 172, 185, 186, 199, 200, 204, 209, 210, 211, 213, 215, 217, 219, 225, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 253, 254, 255, 256, 273, 274, 275, 276, 277, 278, 279, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328 Second Revised Leaves Nos. 166, 205, 206, 212, 216, 218, 220 Supplement No. 2 Supplement No. 3 Supplement No. 10 Supplement No. 12 Supplement No. 13 Amendments to Schedule P.S.C. No. 12 - Gas First Revised Leaves Nos. 4, 63, 68, 69, 71, 72, 148, 149, 150, 151, 152, 153, 154, 158, 188, 193 Second Revised Leaves Nos. 70, 73 Third Revised Leaves Nos. 186, 191 Fourth Revised Leaf No. 159 Supplement No. 2 Supplement No. 4 Supplement No. 7 Supplement No. 8 Supplement No. 9

ATTACHMENT A CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 & 00-G-1274 JOINT PROPOSAL - ELECTRIC REVENUE REQUIREMENTS
SETTLEMENT PERIOD $(000) RY1 RY2 RY3 ---------------------153,000 154,407 155,633 (3,072) (0) 3,072 ---------------------149,928 154,407 158,706 21,302 6,093 -------177,323 21,309 5,938 -------181,654 21,316 5,831 -------185,853

OPERATING REVENUES: Own Territory Base Revenues Revenue (Surplus)/Deficiency Total Revenue Requirement NMP2 CTC Other Operating Revenues Total Operating Revenues OPERATING EXPENSES: Non Fossil Production Maintenance Right of Way Maintenance NMP2 Operations Direct Labor Research and Development Expenses Projected Based on Inflation Miscellaneous General Expenses Transportation Depreciation Fringe Benefits Other Post Employee Benefits (OPEB) Pension Plan Major Rents Uncollectible Accounts Regulatory Commission Expenses Data Processing Costs Other Operating Insurance Telephone Legal Services Special Services Injuries and Damages Storms Expense

187 4,838 16,309 37,996 1,667 8,899 1,895 1,434 4,666 1,429 (10,210) 1,974 784 1,278 2,719 543 1,377 1,434 951 1,465 2,900

191 4,944 16,316 39,332 1,692 9,087 1,922 1,519 4,825 1,429 (10,210) 1,986 791 1,305 2,631 554 1,406 1,464 971 1,496 2,961

195 5,123 16,323 39,674 1,747 9,268 1,949 1,605 4,869 1,429 (10,210) 1,998 798 1,333 2,674 567 1,434 1,493 991 1,526 3,023

Environmental Low Income Program Expenses Allocated to Affiliates Total Operating Expenses

244 306 (506) -------84,579 --------

249 530 (506) -------86,885 --------

254 995 (506) -------88,552 --------

OTHER DEDUCTIONS: NMP2 Decommissioning Taxes Other Than Income Taxes: Property Revenue Payroll Other NMP2 Depreciation Total Other Deductions

999 16,450 6,805 2,911 2,125 3,061 19,035 -------51,386 -------12,728 -------148,693 -------28,630 -------380,215 7.53% 10.30%

999 17,112 6,812 2,989 2,088 3,061 19,888 -------52,949 -------12,770 -------152,604 -------29,050 -------386,309 7.52% 10.30%

999 17,797 6,842 3,054 2,052 3,061 20,696 -------54,501 -------12,911 -------155,964 -------29,889 -------399,582 7.48% 10.30%

Federal Income Tax

Total Operating Revenue Deductions

Operating Income

Rate Base Rate of Return Return on Common Equity

ATTACHMENT B

CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 & 00-G-1274 JOINT PROPOSAL - GAS REVENUE REQUIREMENTS
Settlement Period $(000) RY1 RY2 RY3 ---------------------36,597 (885) -------35,712 1,900 2,077 -------39,689 37,007 (0) -------37,007 1,900 2,002 -------40,909 37,378 885 -------38,263 1,900 1,921 -------42,084

OPERATING REVENUES: -----------------Own Territory Base Revenues Revenue (Surplus)/Deficiency Total Revenue Requirement Interruptible Sales to Generators Other Operating Revenues Total Operating Revenues OPERATING EXPENSES: Labor Research and Development Expenses Projected Based on Inflation Miscellaneous General Expenses Transportation - Depreciation Fringes Other Post Employee Benefits (OPEB) Pension Plan Environmental Major Rents Uncollectible Accounts Regulatory Commission Expenses Data Processing Costs Other Operating Insurance Telephone Legal Services Special Services Injuries and Damages Low Income Program Expenses Allocated to Affiliates Total Operating Expenses

9,007 331 2,302 287 307 986 307 (2,273) 43 123 210 258 423 90 201 377 171 374 48 (89) -------13,483 --------

9,285 303 2,350 291 325 1,009 307 (2,273) 44 125 220 263 481 92 206 385 175 382 82 (89) -------13,963 --------

9,632 303 2,399 294 344 1,029 307 (2,273) 44 127 227 269 526 94 210 392 178 390 153 (89) -------14,556 --------

OTHER DEDUCTIONS:
Taxes Other Than Income Taxes: Property Revenue Payroll Other Depreciation Total Other Deductions

4,559 1,598 641 277 5,757 -------12,832 -------4,361 -------30,676 -------9,013 -------119,695 7.53% 10.30%

4,737 1,661 659 280 6,013 -------13,350 -------4,457 -------31,770 -------9,139 -------121,525 7.52% 10.30%

4,923 1,719 672 283 6,227 -------13,824 -------4,511 -------32,891 -------9,193 -------122,904 7.48% 10.30%

Federal Income Tax

Total Operating Revenue Deductions

Operating Income

Rate Base Rate of Return Return on Common Equity

ATTACHMENT C SHEET 1 OF 3

CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 AND 00-G-1274 JOINT PROPOSAL - COST OF CAPITAL
$(000) PRE-TAX WEIGHTED COST -------2.46% 0.05% 0.28% 7.45% 10.23% ----PRE-TAX WEIGHTED COST -------2.54% 0.05% 0.28% 7.31% 10.17% ----PRE-TAX WEIGHTED COST -------2.63% 0.05% 0.26% 7.12% 10.06% -----

RATE YEAR 1: -----------Long Term Debt Customer Deposits Preferred Stock Common Equity Total Capitalization

AMOUNT -----257,887 4,436 21,005 251,153 ------534,481 -------

RATIO ----48% 1% 4% 47% --100% ---

COST ---5.09% 6.00% 4.61% 10.30%

WEIGHTED COST -------2.46% 0.05% 0.18% 4.84% ---7.53% ----

RATE YEAR 2: -----------Long Term Debt Customer Deposits Preferred Stock Common Equity Total Capitalization

AMOUNT -----268,450 4,470 21,042 251,176 ------545,138 -------

RATIO ----49% 1% 4% 46% --100% ---

COST ---5.15% 6.00% 4.61% 10.30%

WEIGHTED COST -------2.54% 0.05% 0.18% 4.75% ---7.52% ----

RATE YEAR 3: -----------Long Term Debt Customer Deposits Preferred Stock Common Equity Total Capitalization

AMOUNT -----281,778 4,412 21,057 251,282 ------558,529 -------

RATIO ----50% 1% 4% 45% --100% ---

COST ---5.21% 6.00% 4.61% 10.30%

WEIGHTED COST -------2.63% 0.05% 0.17% 4.63% ---7.48% ----

ATTACHMENT C SHEET 2 OF 3 CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 AND 00-G-1274 JOINT PROPOSAL - COST OF LONG-TERM DEBT $(000)
OUTSTANDING 8/30/01 CHANGES ------------33,400 -33,700 -41,150 -41,000 -16,700 -15,000 (15,000) 15,000 --65,000 20,000 -MONTHS AVERAGE OUTSTANDING OUTSTANDING ----------- ----------12 33,400 12 33,700 12 41,150 12 41,000 12 16,700 2 2,750 12 15,000 10 54,187 12 20,000 -----257,887 INTEREST EXPENSE ------1,820 944 1,090 1,062 701 163 1,178 3,522 1,200 -----11,701 1,414 -----13,115 -----5.09% ------

COST OF LONG TERM DEBT - RY1: ---------------------------PCB - August 1, 2027 Series PCB - August 1, 2034 Series PCB - August 1, 2028 Series PCB - August 1, 2028 Series PCB - December 1, 2028 MTN - September 10, 2001 MTN - July 2, 2004 MTN - January 1, 2007 MTN - January 15, 2009 Totals

A B C D

RATE ---5.45% 2.80% 2.65% 2.64% 4.20% 5.93% 7.85% 6.50% 6.00%

Amortization of Debt Discount & Expense Total Cost of Debt Cost Rate

COST OF LONG TERM DEBT - RY2: ---------------------------PCB - August 1, 2027 Series PCB - August 1, 2034 Series PCB - August 1, 2028 Series PCB - August 1, 2028 Series PCB - December 1, 2028 MTN - January 1, 2007 MTN - July 2, 2004 MTN - April 1, 2008 MTN - January 15, 2009 Totals

A B C D

OUTSTANDING RATE 6/30/01 CHANGES ----- -------- -------5.45% 33,400 -2.80% 33,700 -2.65% 41,150 -2.64% 41,000 -4.20% 16,700 -6.50% 65,000 -7.85% 15,000 -6.50% -10,000 6.00% 20,000 --

MONTHS AVERAGE OUTSTANDING OUTSTANDING ------------ ----------12 33,400 12 33,700 12 41,150 12 41,000 12 16,700 12 65,000 12 15,000 3 2,500 12 20,000 -------268,450

INTEREST EXPENSE -------1,820 944 1,090 1,082 701 4,225 1,178 162 1,200 ------12,403 1,420 ------13,823 ------5.15% -------

Amortization of Debt Discount & Expense Total Cost of Debt Cost Rate

COST OF LONG TERM DEBT - RY3: ---------------------------PCB - August 1, 2027 Series PCB - August 1, 2034 Series PCB - August 1, 2028 Series PCB - August 1, 2028 Series PCB - December 1, 2028 MTN - January 1, 2007 MTN - July 2, 2004 MTN - April 1, 2008 MTN - April 1, 2009 MTN - January 15, 2009

A B C D

OUTSTANDING RATE 6/30/01 CHANGES ----- -------- -------5.45% 33,400 -2.80% 33,700 -2.65% 41,150 -2.64% 41,000 -4.20% 16,700 -6.50% 65,000 -7.85% 15,000 -6.50% 10,000 -6.50% -8,742 6.00% 20,000 --

MONTHS AVERAGE OUTSTANDING OUTSTANDING ------------ ----------12 33,400 12 33,700 12 41,150 12 41,000 12 16,700 12 65,000 12 15,000 12 10,000 8 5,828 12 20,000 -------281,778

INTEREST EXPENSE -------1,820 944 1,090 1,082 701 4,225 1,178 650 379 1,200 ------13,269 1,425 ------14,694 ------5.21% -------

Totals Amortization of Debt Discount & Expense Total Cost of Debt Cost Rate

ATTACHMENT C SHEET 3 OF 3 CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 AND 00-G-1274 JOINT PROPOSAL - AMORTIZATION OF DEBT AND PREFERRED STOCK EXPENSES
ESTIMATED REDEMPTION PREMIUM ---------UNAMORTIZED EXPENSE 6/30/01 --------53,973 860,846 28,587 29,978 47,665 146,034 146,005 41,891 537,586 176,915 646,345 570,240 643,020 641,714 -----------4,570,799 --------TOTAL UNRECOVERED COST OF REDEMPTION ---------53,973 860,846 28,587 29,978 47,665 146,034 146,005 41,891 537,586 176,915 646,345 570,240 643,020 641,714 208,000 32,000 32,000 ---------4,842,799 ----------

UNAMORTIZED DEBT EXPENSE: 6 1/4% MORTGAGE BONDS - 2007 9 1/4% MORTGAGE BONDS - 2021 7.97% MTN 6/11/2003 SERIES A 7.97% MTN 6/13/2003 SERIES A 7.85% MTN 6/2/2004 SERIES A 8.12% MTN 8/29/22 SERIES A 8.14% MTN 8/29/22 SERIES A 6.46% MTN 8/11/03 SERIES A Tax Exempt NYSERDA 4.20% Due 12/1/28 6.00% MTN 1/15/09 Series C 5.45% Series A NYSERDA Bonds 8/1/27 Var Rate Ser B NYSERDA Bonds 7/1/34 Var Rate Series C NYSERDA Bonds 8/1/28 Var Rate Series D NYSERDA Bonds 8/1/28 $65,000 MTN Issued 9/1/01 Due 1/1/07 $10,000 MTN Issued 4/1/03 Due 4/1/08 $10,000 MTN Issued 10/1/03 Due 4/1/09

208,000 32,000 32,000 ---------272,000 ----------

6/30/02 ---------9,156 43,404 15,516 14,328 15,528 6,888 6,900 19,332 19,608 23,580 24,780 17,477 31,332 29,400 32,500 -----------309,729 ----------

Total

UNAMORTIZED LOSS ON REACQUIRED DEBT: REDEMPTION 9 1/4% MTG. BONDS REDEMPTION 10 5/8% MTG BONDS 11/1/05 REDEMPTION 10 3/4% MTG BONDS 9/15/09 7 1/2% POLLUTION CONTROL NOTES - 2014 ADJ RTE POLL CTRL NOTES - DUE 11/1/2020 ADJ RATE POLL CTRL NOTES - DUE 5/1/27 REDEEMED 11 1/4% POLL CTL BDS - 9/1/12 5.375% MORTGAGE BONDS -2028 Redeem 9 1/4% Mortgage Bond Redeem 7.97% MTN Due 5/1/03 Redeem 7.97% MTN Due 5/13/03 Redeem 8.12% MTN Due 8/29/22 Redeem 8.14% MTN Due 8/29/22 Redeem 6.46% MTN Due 8/11/03 Total --------2,856,000 300,000 300,000 500,000 500,000 (100,000) ---------4,356,000 ---------160,082 381,108 741,496 1,850,442 592,800 393,193 298,284 720,510 --------------5,137,915 --------160,082 381,108 741,496 1,850,442 592,800 393,193 298,284 720,510 2,856,000 300,000 300,000 500,000 500,000 (100,000) ---------9,493,915 ---------57,324 87,948 90,324 139,656 187,200 15,168 26,712 26,280 144,000 150,000 150,000 23,810 23,810 (46,154) ---------1,076,077 ----------

UNAMORTIZED DISCOUNT ON L/T DEBT: First Mtg. Bonds - 9 1/4% due 5/1/21 5.45% Ser. A NYSERDA Bonds due 8/1/27 Total ---------------------4,628,000 ---------512,640 78,045 --------590,685 --------10,299,399 --------512,640 78,045 ---------590,685 ---------14,927,399 ---------25,632 2,976 ---------28,608 ---------1,414,414 ----------

Total Debt Issuance and Redemption Expenses

PREFERRED STOCK: --------------6.20% Cumulative Preferred 6.80% Cumulative Preferred 675,000 1,600,000 ---------412,554 454,230 --------1,087,554 2,054,230 ---------150,007 78,256 ----------

Total Preferred Stock Issuance and Redemption Expenses

2,275,000 ----------

866,784 ---------

3,141,784 ----------

228,264 ----------

ATTACHMENT D-1 CENTRAL HUDSON GAS & ELECTRIC CORPORATION CASE NOS. 00-E-1273 & 00-G-1274 JOINT PROPOSAL - BENEFIT POOL
Settlement Period ($000, Net of Tax) RY1 RY2 RY3 --------------------NET BENEFIT FUND: Net Fossil Proceeds Deferred Excess Earnings Net Settlement Benefits NMP2 Proceeds 76,708 9,377 41,621 36,500 ------164,206 (42,500) ------121,706 100,692 88,204

Total Benefit Pool Less: Rate Base Credit

Net Benefit Fund Available Identified Uses (net of tax): Reliability Program - $20 million, 3 Yr Program Offset of Gas Site Remediation Costs - $15 million Refunds

(4,333) (9,750) (15,000) -------92,623

(4,333) -(15,000) -------81,359

(4,333) -(15,000) ------68,871

Remaining Balance Add Cumulative Carrying Charges - Net of Tax

8,069 -------100,692 --------

6,845 -------88,204 --------

5,875 ------74,745 -------

Net Benefit Fund Balance

Identified uses include electric backout credits, and other new stranded costs; potential uses include economic development fund, price spike mitigation, small customer aggregation, other competitive initiatives and additional refunds.

ATTACHMENT D-2 ELECTRIC DEFERRED ITEMS INCLUDED IN BENEFIT FUND The June 30, 2001 balances of the following deferred debit and deferred credit accounts, net of tax, are included in the Benefit Fund. No subsequent deferrals to these accounts will be included in the Benefit Fund except for those to make accounting adjustments to the June 30, 2001 balance. DEFERRED DEBITS Adjustable Rate PCB Notes Deferred DSM Costs Tax Rate Change - 1993 Storm Costs - April 1997 Restructuring Costs - Formation of Holding Company Lost Revenues - Job Retention Provision (COPS) Pension Carrying Charge Pension Fund Withdrawal DEFERRED CREDITS Research & Development Costs Management Audit Adjustable Rate Preferred Dividends Over/Under Collection NMP-2 Vendor Litigation - Ratepayer NMP-2 Vendor Litigation Carrying Charge NMP-2 Deferred Settlement Agreement Costs Carrying Charge on NMP-2 Settlement Agreement Costs Carrying Charge on DSM Rate Base DSM Lost Revenues Customer Benefits Account (COPS) Royalty Charge (COPS) R&D 1994 Audit Adjustment Deferred Letter of Credit/Remarketing Fees Deferred Pension Cost Over/Under Collection Deferred OPEB Expense OPEB Carrying Charge Deferred Excess Earnings

ATTACHMENT E GAS DEFERRED ITEMS FOR BALANCE SHEET OFFSET The following gas department deferred debit and deferred credit items will be subject to balance sheet offset accounting to the extent that a net of tax offset of zero is achieved using actual deferred amounts at June 30, 2001. DEFERRED DEBITS Adjustable Rate PCB Notes Amortization of Unbilled Revenue (Case 90-G-0673) Carrying Charge of Newburgh Site Investigation ULIEEP Over/Under Collection (Including Carrying Charges) Pension Carrying Charge DEFERRED CREDITS Unamortized Interruptible Gas Depreciation Research & Development Costs Management Audit Gas Special Franchise Tax R&D 1994 Audit Adjustment Deferred Letter of Credit/Remarketing Fees Deferred Pension Cost Over/Under Collection Deferred OPEB Expense OPEB Carrying Charge

ATTACHMENT F CENTRAL HUDSON GAS & ELECTRIC CORPORATION ELECTRIC INTERCLASS REVENUE ALLOCATION ALLOCATION OF PROPOSED REVENUE INCREASE (DECREASE) EXCLUDING REVENUE TAX USING 15% TOLERANCE BAND ON RATE OF RETURN CASE 00-E-1273 COMPLIANCE FILING $(000)
SC Nos 2 & 12 LINE SC No. 1 SMALL NO. TOTAL RESIDENTIAL GENERAL ----- ------------------------------ --------- ---------- -------1. Net Income (1) $22,717 $10,984 $7,323 SC SC No. 6 SC No. 5 RESIDENTIAL No. SC NO. 3 AREA TIME STRE PRIMARY LIGHTING OF USE LIGHT ---------- -------- ----------- ----$1,708 $198 $1,232 ($34

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----2. % Rate of Return 5.34 4.58 5.89 11.67 4.51 10.08 (0.4

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----3. 5.34 +/- 15% 5.09 4.58 5.89 6.14 4.54 6.14 4.5

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----4. Adjusted Net Income $21,652 $10,985 $7,347 $898 $199 $750 $31

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----5. Adjusted to Initial Net Income $22,717 $11,525 $7,708 $942 $209 $787 $33

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----6. Difference $541 $385 ($766) $11 ($445) $36

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----7. Revenue (Line 7/.66) $819 $583 ($1,161) $17 ($674) $55

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----8. Revenue Increase (Decrease)NET OF FUEL Excludes Revenue Tax

($2,297)

($1,300)

($692)

($95)

($12)

($87)

($3

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----9. Total Revenue Decrease ($2,297) ($481) ($109) ($1,256) $5 ($761) $51

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----10. Present Rate Revenues (Excluding Revenue Tax) $149,179 $84,441 $44,966 $6,160 $758 $5,623 $2,40

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----11. Percent Increase Unconstrained (Decrease) (1.54) (0.57) (0.24) (20.39) 0.66 (13.53) 21.4

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----12. Percent Increase Constrained (Decrease) (1.54) (1.52) (1.52) (1.93) (0.79) (1.94) (0.7

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----13. Total Revenue Increase Constrained

($2,297)

($1,283)

($683)

($119)

($6)

(109)

($1

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

14.

DSM Adjustment

($42)

($6)

($29)

($7)

----- ------------------------------ --------- ---------- -------- ---------- -------- ----------- -----15. Final Total Revenue Increase ($2,339) ($1,289) ($712) ($126) ($6) ($109) ($1

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

(1) PRO FORMA COST OF SERVICE STUDY FOR THE RATE YEAR ENDING JUNE 30, 2002, WITH HYDRO CLASSIFIED 100% ENERGY AND TURBINES CLASSIFIED 100% DEMAND. 51

ATTACHMENT G SHEET 1 OF 5 CENTRAL HUDSON GAS & ELECTRIC CORPORATION LOW INCOME PROGRAM POWERFUL OPPORTUNITIES PLAN OBJECTIVES: An effective low income program should provide a practical opportunity for customers who, due to an illness or disability or loss of job, have fallen behind in their utility payments and are struggling to pay their arrears. An effective low income program should empower customers by developing a comprehensive plan to improve their overall financial situation to become self-reliant. An effective low income program should teach customers about the cost of electricity -- and how energy conservation and energy efficiency does make a difference for affordability. An effective low income program should bring peace of mind to the customers -- that their utility bills can be worked out at a level they can handle. An effective low income program should build a stronger relationship between customers, Central Hudson and the community. And lastly, an effective low income program should enable Central Hudson to focus its collection efforts on customers who can but don't pay their utility bills. PLAN DESIGN & ADMINISTRATION Powerful Opportunities is a managed approach, designed to accomplish three primary goals: (1) Provide customers with an affordable payment plan for past and future utility bills; (2) Provide customers with the tools to obtain long-term, overall financial stability and self-sufficiency; and (3) Provide customers with the energy services and education required to enable them to reduce their energy usage and potentially their payment amount. In addition, our low income program is designed to include an incentive to encourage customers to meet their Powerful Opportunities obligations. To attain the first goal, "provide customers with an affordable payment plan for past and future utility bills" the following actions are recommended:

Attachment G Sheet 2 of 5 - Place the customer on budget billing for future bills. - Place the customer's arrears in suspend; no LPCs will be charged to this amount while the customer is a participant of the Program. - Give an incentive: a $ for $ match on payments made above the current budget amount. The maximum match paid by Central Hudson will be $20 per month per customer. - If the customer is a heating customer, give one additional GNF benefit at the end of the Program (last $125 of arrears). - Offer a lower basic service charge of $5.00 per month for both gas and electric customer participants. It is recommended Central Hudson collaborate with community resources to attain the second goal of "providing customers with the tools to obtain overall financial stability and self-- sufficiency"; and the third goal, "providing customers with the energy services and education required to enable them to reduce their energy usage". A partnership with a community--based organization, such as Dutchess County Community Action Agency (DCCAA), would contribute to the overall integrity of the Program. DCCAA has established trust and credibility in helping families with their self--sufficiency goals. In addition, DCCAA is a well--known and respected entity within the network of community assistance agencies. DCCAA can effectively coordinate community resources, educate consumers, establish individual customer assessments and referrals, and provide program administration and outreach to our mutual clients. A partnership with DCCAA would provide: - A multi-county network, which spans our entire service territory, with the ability to disseminate, support and monitor implementation of the program. - Referrals to local, state and federal assistance programs, and coordinate with the NYS Weatherization Program.

Attachment G Sheet 3 of 5 - Expertise in assisting low income customers with the ability to gain greater competency in their household management through energy efficient products and consumer education. - Family development training to promote greater self-sufficiency and self-reliance to the Program participants, and internal sensitivity training to our customer--contact employees. CUSTOMER'S ELIGIBILITY AND OBLIGATIONS Eligibility for participation in this Program is outlined below: - Must be a CHG&E customer whose bills are not directly paid to the Company by a local department of social services office, and the account must be their primary residence. - Customer must have an account that is 60 days or more in arrears. - Customer who has a household income equal to or less than 200% of poverty level, as determined for that program year. - Customers will be considered categorically eligible if they are enrolled in the New York State Home Energy Assistance Program or any other federal or state assistance program with similar or stricter income eligibility requirements than 200% of the poverty level. - Customer must complete a Program application form and financial statement (DSS 3596), submit required documentation and be approved for participation. - Customers in an energy crisis (locked for non-payment) at the time of application may be eligible to participate, however, the amount they are required to pay for turn-on will not be matched by Central Hudson.

Attachment G Sheet 4 of 5 - The maximum Program enrollment targets are:
YEAR 1 2 3 TARGET 250 500 1000

In order for the customer to become a participant of Powerful Opportunities, they must agree (in writing) to the following terms and responsibilities: - Only if consistent with a DCCAA assessment of an individual participant's ability to pay, participants shall pay at least an additional $5 per month (for $60 per year) on their arrears. - Participate in energy conservation/efficiency training and budget counseling sessions as prescribed by their Family Development Specialist. - Agree to the recommended follow-up schedule, and meet with their designated Family Development Specialist according to that schedule. - Apply for community and government assistance as suggested by the Family Development Specialist. - Customers who become delinquent on a current bill will be dropped from the Program after 60 days delinquency and will not be eligible for re-entry for the same arrears. A minimum $10/month DPA will be offered and then regular collection cycle will begin. - Re-entry to the program, however, will be permitted if a participant who is dropped from the program for nonpayment of current bills subsequently receives emergency assistance through a Department of Social Services program and the amount of the delinquency after the customer's prior enrollment in the program is paid in full. OTHER ASSISTANCE - HEAP payments (regular and emergency) will be applied to the customer's current charges and will not be matched by Central Hudson. If a HEAP payment is more

Attachment G Sheet 5 of 5 than the current amount due, the excess will be applied to the arrears, with no Company match. - Other community assistance (i.e., Red Cross, Church Charities, etc.) will be matched by Central Hudson if the funding is paid to the customer for payment of bills, and the customer passes the payment to Central Hudson to be applied to their arrears. Community assistance payments made directly to Central Hudson on behalf of the customer will be applied to the current bill first, then to the arrears, with no match. DCCAA ROLE: DCCAA will work closely with Consumer Outreach to develop and maintain an effective low income program. Upon approval of this draft proposal, DCCAA will prepare and submit for our review and approval a Program outline and fee for their part in Powerful Opportunities. The Program outline will include: - Implementation Plan (including targeted outreach, toll- free number, etc.) - Procedures (including forms, letters, follow-up, collaboration with neighboring Community Action Agencies located in our service territory, etc.) - Community and Government Assistance Referrals - Weatherization Plan (including appliance repair and replacement) - Case Management: Family Development Training Outline (for long-term self--sufficiency) Energy Efficiency/Conservation Budget Counseling - Sensitivity Training Outline (for CHG&E employees) - Evaluation Process

ATTACHMENT H SHEET 1 OF 2 CENTRAL HUDSON GAS & ELECTRIC CORPORATION RATE BASE - SUMMARY FINAL SETTLEMENT POSITION ($000)
ELECTRIC ------------------------------------RY 1 RY 2 RY 3 ------------------------$ 671,892 $ 703,930 $ 743,956 (244,559) --------427,333 (5,354) (42,500) 30,160 (603) 17,559 (66,670) 23,507 --------383,432 (3,217) --------$ 380,215 --------(256,038) --------447,892 (16,196) (42,500) 28,731 (615) 15,948 (67,869) 24,135 --------389,526 (3,217) --------$ 386,309 --------(270,252) --------473,704 (26,650) (42,500) 29,088 (627) 14,228 (69,353) 24,909 --------402,799 (3,217) --------$ 399,582 --------8,434 4,290 (17,760) 5,181 --------120,693 (998) --------$ 119,695 --------8, 4, (18, 5, -----122, ( -----$ 121, -----GAS -------------------RY 1 RY -------------$ 190,346 $ 196, (69,798) --------120,548 (72, -----123,

BOOK COST OF UTILITY PLANT LESS: ACCUMULATED PROVISION FOR DEPRECIATION AND AMORTIZATION

NET PLANT RELIABILITY CAPITAL PROGRAM NET SETTLEMENT BENEFITS NONINTEREST-BEARING CONSTRUCTION WORK IN PROGRESS CUSTOMER ADVANCES FOR UNDERGROUNDING DEFERRED CHARGES ACCUMULATED DEFERRED TAXES WORKING CAPITAL

UNADJUSTED RATE BASE CAPITALIZATION ADJUSTMENT TO RATE BASE

TOTAL RATE BASE

ATTACHMENT H SHEET 2 OF 2 CENTRAL HUDSON GAS & ELECTRIC CORPORATION DEFERRED CHARGES, DEFERRED TAXES AND WORKING CAPITAL FINAL SETTLEMENT POSITION ($000)
ELECTRIC -------------------------------------RY 1 RY 2 RY 3 ---------------------DEFERRED CHARGES SOFTWARE PURCHASES MTA TAX UNAMORTIZED DEBT EXPENSE INCREMENTAL DEFERRED DEBT EXPENSE UNAMORTIZED DISCOUNT LONG-TERM DEBT CARRYING CHARGE ON NEWBURGH SITE INVESTIGATION $ 2,647 2,426 8,211 3,783 492 $ 2,221 2,426 8,459 2,375 467 $ 1,564 2,246 7,710 2,085 443 G -----------------RY 1 R ---------$ 1,197 769 1,337 780 80 $

0 --------

0 --------

0 --------

127 --------

---

TOTAL DEFERRED CHARGES

$ 17,559

$ 15,948

$ 14,228

$

4,290

$

DEFERRED TAXES MTA TAX NORMALIZED DEPRECIATION INVESTMENT TAX CREDIT COST OF REMOVAL CONSTRUCTION OVERHEADS CONTRIBUTIONS IN AID OF CONSTRUCTION DEFERRED AVOIDED COST INTEREST CAPITALIZED UNBILLED REVENUE REPAIR ALLOWANCE ACRS METHOD CHANGE MORTGAGE TAXES BONDS REDEEMED CARRYING CHARGE ON NEWBURGH SITE INVESTIGATION REDEMPTION PREMIUMS RELIABILITY EXPENDITURES

($ 849) (59,588) (3,102) (1,510) (1,438) 1,662 1,303 4,231 (6,044) (97) (134) (716) 0 (1,230) 842 -------($66,670) --------

($ 849) (62,728) (2,800) (1,536) (1,329) 1,651 1,288 4,231 (6,149) (87) (121) (806) 0 (1,097) 2,463 -------($67,869) --------

($ 849) (66,162) (2,498) (1,572) (1,220) 1,638 1,276 4,231 (6,244) (77) (108) (726) 0 (1,005) 3,963 -------($69,353) --------

($ 269) (18,639) (700) (174) 341 294 1,811 (24) (21) (117) (45) (217) -------($17,760) --------

($ (1

--($1 ---

TOTAL DEFERRED TAXES

WORKING CAPITAL OTHER MATERIAL AND SUPPLY WORKING CAPITAL PREPAID PROPERTY TAXES - OTHER PREPAID INSURANCE - OTHER OTHER PREPAYMENTS OPERATION AND MAINTENANCE CASH WORKING CAPITAL

4,248 8,571 398 592 9,698 -------$ 23,507 --------

4,336 8,916 406 605 9,872 -------$ 24,135 --------

4,422 9,272 415 617 10,183 -------$ 24,909 --------

1,408 1,623 112 105 1,933 -------$ 5,181 --------

--$ ---

TOTAL WORKING CAPITAL

ATTACHMENT I STATE OF NEW YORK PUBLIC SERVICE COMMISSION CASE 00-E-1273 - PROCEEDING ON MOTION OF THE COMMISSION AS TO THE RATES, CHARGES, RULES AND REGULATIONS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION FOR ELECTRIC SERVICE CASE 00-G-1274 - PROCEEDING ON MOTION OF THE COMMISSION AS TO THE RATES, CHARGES, RULES AND REGULATIONS OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION FOR GAS SERVICE SUPPLEMENTAL ENVIRONMENTAL ASSESSMENT FORM PREPARED BY: CENTRAL HUDSON GAS & ELECTRIC CORPORATION, STAFF OF THE DEPARTMENT OF PUBLIC SERVICE, AND THE OTHER SIGNATORY PARTIES TO THE JOINT PROPOSAL Dated: Albany, New York August 27, 2001

I. INTRODUCTION This document provides the substantive information solicited by Appendix A of 6 NYCRR 617.20, part of the regulations promulgated by the New York State Department of Environmental Conservation pursuant to the State Environmental Quality Review Act ("SEQRA"), Article 8 of the New York Environmental Conservation Law. An environmental assessment is an evaluation of the known or potential environmental consequences of a proposed action. Such an assessment also determines whether additional relevant information about such impacts is needed. Environmental assessments help involved and interested agencies identify their concerns about the action and provide guidance to the lead agency in making its determination of significance. An Environmental Assessment Form ("EAF") provides an organized approach to identifying the information needed by the lead agency to make its determination of significance. A properly completed EAF describes a proposed action, its location, its purpose and its potential impacts on the environment. The EAF is the first step in the environmental impact review process and leads to either a positive declaration (requiring further analysis of the potentially significant adverse environmental impacts) or a negative declaration (requiring no further analysis). II. ENVIRONMENTAL ASSESSMENT FORM INFORMATION (PART I OF EAF) A. APPLICANT/SPONSOR: Central Hudson Gas & Electric Corporation ("Central Hudson" or "Company") 284 South Avenue Poughkeepsie, New York 12601 B. NAME OF ACTION: Public Service Commission ("Commission") approval of the terms of the Joint Proposal for the resolution of Cases 00-E-1273 and 00-G-1274 C. LOCATION OF ACTION: Central Hudson electric and gas service territories D. DESCRIPTION OF ACTION: The Company and other Signatory Parties to the Joint Proposal are petitioning the Commission under the Public Service Law of the State of New York for approval of the terms of their Joint Proposal for the resolution of Cases 00-E-1273 and 00-G-1274. These cases relate to the rates, charges, rules and regulations of the Company for electric and gas service, respectively, and to the Commission's

restructuring and competitive market development policies in Case 94-E-0952(1) (electricity) and Cases 93-G0932 and 97-G-1380(2) (gas). The Commission's consideration of the rate-related aspects of the Joint Proposal is a "Type II exempt rate action"(3) that does not require SEQRA analysis. Accordingly, the Commission's consideration of the restructuring and competitive market development-related aspects of the Joint Proposal is the potential action that has been evaluated in this Assessment. The Joint Proposal does not require any construction activities which would directly affect the environment. As a result, consideration of the terms of the Joint Proposal is an "unlisted" action as defined in 6 NYCRR 617. While 6 NYCRR 617.6 generally calls for the use of the short EAF set forth at 6 NYCRR 617.20, Appendix C, because this action does not involve physical construction as contemplated by the short EAF, a narrative EAF has been utilized.(4) 1. CASE 00-E-1273 Case 00-E-1273 was occasioned by the implementation of the Commission's policy of supporting increased competition in electricity markets, which it adopted in Opinion No. 96-12 in Case 94-E-0952. Case 00-E-1273 was preceded and required by Case 96-E-0909(5) in which, by an Order issued February (1) IN THE MATTER OF COMPETITIVE OPPORTUNITIES REGARDING ELECTRIC SERVICE (2) Respectively, PROCEEDING ON MOTION OF THE COMMISSION TO ADDRESS ISSUES ASSOCIATED WITH THE RESTRUCTURING OF THE EMERGING COMPETITIVE NATURAL GAS MARKET AND IN THE MATTER OF ISSUES ASSOCIATED WITH THE FUTURE OF THE NATURAL GAS INDUSTRY AND THE ROLE OF THE LOCAL DISTRIBUTION COMPANIES (3) Opinion No. 98-14 at 41. (4) A narrative EAF has also been used in similar cases. See, Case 99-G-0336, NIAGARA MOHAWK POWER CORPORATION - GAS MULTI-YEAR RATE AND RESTRUCTURING PROPOSAL, Opinion No. 00-9 issued July 27, 2000; Case 99-G-1469, BROOKLYN UNION GAS COMPANY - MULTI-YEAR RESTRUCTURING AGREEMENT, Order Establishing Interim Rate Plan issued December 26, 2000; Case 98-G-1589, ROCHESTER GAS AND ELECTRIC CORPORATION - PLANS FOR GAS RATES AND RESTRUCTURING, Order Adopting Terms of Joint Proposal issued February 28, 2001. (5) IN THE MATTER OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION'S PLANS FOR ELECTRIC RATES AND RESTRUCTURING PURSUANT TO OPINION NO. 96-12

19, 1998 and by Opinion No. 98-14 issued June 30, 1998, the Commission adopted an electric rate and restructuring plan for the Company pursuant to the Commission's policy of supporting increased electricity market competition as adopted in Case 94-E-0952. Case 00-E-1273 and the Joint Proposal address ratemaking associated with the restructuring of the Company from a vertically integrated utility to a delivery service company, as envisioned by the Commission in Case 94-E0952 and implemented, to the extent of the Company's divestiture of its fossil fueled generating units and measures to promote retail access, in Case 96-E-0909. This is in the form of removing from rates those charges associated with the Company's former interests in fossil fueled generating units and establishing the methods and procedures for customer acquisition of and payment for electric supply provided by marketers. Case 00-E-1273 and the Joint Proposal additionally address the furtherance of the Commission's policy of supporting increased competition in electricity markets by unbundling rate elements and providing back-out credits to customers who take supply service from ESCOs or marketers, funding increased customer understanding of competitive electricity supply options and efforts to obtain input from ESCOs and marketers regarding the furtherance of the development of a competitive retail electricity supply market in the Company's service territory. On May 3, 1996, the Commission issued a Final Generic Environmental Impact Statement ("FGEIS") in Case 94-E-0952 with respect to the proposed action of adopting a policy supporting increased competition in electricity markets. In adopting such policy in Opinion No. 96-12, the Commission found that the FGEIS "did not identify reasonably likely significant adverse impacts" of the action except with respect to air quality, energy efficiency and research and development in response to which the Commission adopted mitigation measures including monitoring the environmental impacts of the action.(6) By Opinion No. 98-14 in Case 96-E-0909, based on an EAF filed by the Company on June 17, 1997,(7) the Commission found the potential environmental impacts of the rate and restructuring plan for the Company therein adopted to be "within the range of thresholds and conditions set forth in the FGEIS" thereby requiring no further SEQRA action, but, "as a matter of discretion," monitoring of the Company's restructuring and environmental impacts was implemented.(8) 2. CASE 00-G-1274 On November 3, 1998, the Commission issued its Policy Statement Concerning the Future of the Natural Gas Industry in New York State and Order Terminating Capacity Assignment in Cases 93-G-0932 and 97-G-1380 ("Gas Policy Statement"). In the Gas Policy Statement, the Commission articulated its vision of the future of the natural gas industry, which is to "facilitate development of a competitive market; eliminate barriers to competition; provide guidance to LDCs and marketers, especially with regard to expiring capacity contracts; and (6) Opinion 96-12 at 76-81. (7) Opinion 98-14, Appendix D. (8) Opinion 98-14 at 41-42.

address customer inertia.(9) The Commission conducted an analysis under the State Environmental Quality Review Act, determined that there would be no significant environmental impact from adoption of the Gas Policy Statement and issued a Notice of Determination of Non-Significance.(10) Case 00-G-1274 and the Joint Proposal address the furtherance of the Commission's policy of supporting increased competition in natural gas retail supply markets by unbundling rate elements and providing back-out credits to customers who take supply service from marketers, funding increased customer understanding of competitive gas supply options and funding efforts to obtain input from marketers regarding the furtherance of the development of a competitive retail as supply market in the Company's service territory. In that regard the Joint Proposal is similar in principle to gas restructuring settlements pursuant to the Gas Policy Statement of other companies that have been approved by the Commission.(11) III. EVALUATION OF ENVIRONMENTAL IMPACTS (PART 2 OF EAF) Specific environmental impacts that might result from the Joint Proposal are highly unlikely. The Joint Proposal will not cause direct environmental effects because the Joint Proposal does not involve physical activities that might have impacts on the environment. Instead, the Joint Proposal might contribute to the creation of circumstances that subsequently induce activities which might cause environmental effects. In preparing this environmental assessment, the Signatory Parties have set out an evaluation of a range of potentially conceivable secondary consequences of the Joint Proposal in order to assist the Commission in its evaluation of this matter. The Signatory Parties have relied on qualitative judgments as to the potential changes resulting from the proposed actions and the magnitude and importance of the corresponding potential environmental impacts. A. IMPACT ON AIR The Signatory Parties were unable to identify any direct effects on air emissions resulting from the Joint Proposal. The Commission, however, clearly contemplated the possibility that

(9) Gas Policy Statement at 3-4. (10) Gas Policy Statement at 9. (11) Case 99-G-0336, NIAGARA MOHAWK POWER CORPORATION - GAS MULTI-YEAR RATE AND RESTRUCTURING PROPOSAL, Opinion No. 00-9 issued July 27, 2000; Case 99-G-1469, BROOKLYN UNION GAS COMPANY - MULTI-YEAR RESTRUCTURING AGREEMENT, Order Establishing Interim Rate Plan issued December 26, 2000; Case 98-G-1589, ROCHESTER GAS AND ELECTRIC CORPORATION - PLANS FOR GAS RATES AND RESTRUCTURING, Order Adopting Terms of Joint Proposal issued February 28, 2001.

increased competition could promote increased energy usage and, thereby, have adverse air quality impacts. The Signatory Parties believe that the provisions of the Joint Proposal intended to further the Commission's policy of supporting the development of competitive markets for retail energy will neither directly nor indirectly affect the supply market prices in a manner that would encourage increased energy usage not within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 or not within that contemplated by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement. The Signatory Parties also believe that the associated unbundling of the Company's rates as provided for in the Joint Proposal will not result in delivery service rates that would encourage energy usage not within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 or not within that contemplated by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement. As a result, the Signatory Parties believe that any impacts on air quality resulting from the Joint Proposal are within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 and within those contemplated by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement. B. IMPACT ON WATER The Signatory Parties were unable to identify and direct effects on water quality resulting from the Joint Proposal. As discussed in the Impact on Air section above, the Joint Proposal could result in an increased demand for electricity or natural gas. This increased demand in turn could contribute to the need to construct new production, transmission or distribution facilities to serve the increased demand. With such new construction there could be the need to conduct work in environmentally sensitive areas such as wetlands or streams. While this work could potentially impact the environment, it would be subject to all applicable federal and state environmental regulatory requirements including SEQRA review prior to construction. As a result and as the Commission found with respect to gas restructuring, "these speculative impacts need not be considered at this time."(12) With regard to electric restructuring, this similar potential effect would be within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. C. IMPACT ON LAND The Signatory Parties were unable to identify any direct effects on land use resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. (12) Gas Policy Statement, Notice of Determination of Non-Significance at 1-2.

D. IMPACT ON PLANTS AND ANIMALS The Signatory Parties were unable to identify and direct effects on plants and animals resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. E. IMPACT ON AGRICULTURAL LAND RESOURCES The Signatory Parties were unable to identify any direct effects on agricultural land resources resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. F. IMPACT ON AESTHETIC RESOURCE The Signatory Parties were unable to identify any direct effects on aesthetic resource resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. G. IMPACT ON HISTORIC AND ARCHEOLOGICAL RESOURCES The Signatory Parties were unable to identify any direct effects on historic and archeological resources resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. H. IMPACT ON OPEN SPACE AND RECREATION The Signatory Parties were unable to identify and direct effects on open space and recreation resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. I. IMPACT ON TRANSPORTATION The Signatory Parties were unable to identify any direct effects on transportation resulting from the

Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. J. IMPACT ON ENERGY The Commission clearly contemplated the possibility that increased competition could promote increased energy usage. The Signatory Parties believe that the provisions of the Joint Proposal intended to further the Commission's policy of supporting the development of competitive markets for retail energy will neither directly or indirectly affect the supply market prices in a manner that would encourage increased energy usage not within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 or not within that contemplated by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement. The Signatory Parties also believe that the associated unbundling of the Company's rates as provided for in the Joint Proposal will not result in delivery service rates that would encourage energy usage not within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 or not within that contemplated by the Commission in its Determination of Non-Significance reached in connection with the Gas Policy Statement. K. NOISE AND ODOR IMPACT The Signatory Parties were unable to identify any direct noise and odor effects resulting from the Joint Proposal. However, as indicated above, new construction or expansion of production, transmission or distribution facilities could have potential environmental impacts. These impacts, however, would be mitigated by regulatory requirements and SEQRA review at the time as noted by the Commission in its Determination of NonSignificance reached in connection with the Gas Policy Statement and within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952. L. IMPACT ON PUBLIC HEALTH The Signatory Parties were unable to identify any direct effects on public health resulting from the Joint Proposal because under the Joint Proposal the Company would continue to have the responsibility to maintain its facilities for the transmission and distribution of natural gas and electricity in conformance with all applicable regulatory requirements. M. IMPACT ON GROWTH AND CHARACTER OF COMMUNITY OR NEIGHBORHOOD The Joint Proposal's effect of reducing the cost of electricity and gas to consumers will have a positive effect on the economic well-being of communities in the Company's service territory. Price reductions along with the funding of economic development initiatives as provided for in the Joint Proposal will encourage local business growth and the retention and growth of employment. They will also encourage the relocation of businesses to the Company's service territory from outside New York State. In addition, the Joint Proposal includes incentive regulation provisions which encourage the education of consumers regarding energy competition to facilitate the development of the competitive retail energy supply market. It is possible that lower gas prices could lead to a potential for gas distribution franchise expansions, as the Commission has recognized previously. The potential for such expansions under the Joint Proposal is

limited, however, in light of the 20% penetration limitations on the availability of the gas back out credits. Therefore, the potential impacts are considered to be indistinguishable from those that would occur in the absence of the Joint Proposal. IV. SIGNIFICANCE OF ENVIRONMENTAL IMPACTS After a review of the changes called for under the Joint Proposal, the Signatory Parties conclude that no further environmental review is necessary with respect to the Joint Proposal. No significant environmental impact which would result from the subject Joint Proposal was identified. Any potential effects are within the range of thresholds and conditions set forth in the FGEIS in Case 94-E-0952 with respect to electric restructuring and within the Commission's Determination of Non-Significance in Cases 93-G-0932 and 97-G-1380 with respect to gas restructuring.