CH ENERGY GROUP, INC. SHORT-TERM INCENTIVE PLAN

CH ENERGY GROUP, INC.

SHORT-TERM INCENTIVE PLAN

(amended and restated on May 21, 2009)

1.             Purpose. The purpose of this Short-Term Incentive Plan (this "STI Plan") is to reward designated executives of CH Energy Group, Inc. (the "Company") and its Subsidiaries for the achievement of each year's business plan objectives and individual performance goals in a manner consistent with the Company's strategy of achieving long-term shareholder value. On May 21, 2009, the Company amended and restated the STI Plan in its entirety, as set forth herein, with respect to Performance Periods (as defined below) commencing on and after January 1, 2009.

2.             Definitions. The following capitalized words as used in this STI Plan shall have the following meanings:

"Award Opportunity" means a cash award opportunity established under the STI Plan for a Participant by the Committee pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee may establish.

"Board" means the Board of Directors of the Company.

"Chief Executive Officer" means the Chief Executive Officer of the Company.

"Code" means the Internal Revenue Code of 1986, as amended.

"Company" has the meaning given such term in Section 1 of this STI Plan.

"Discretionary Bonus" has the meaning given such term in Section 7 of this STI Plan.

"Employee" means any person employed by the Company or its Subsidiaries, whether such Employee is so employed at the time the STI Plan is adopted or becomes so employed subsequent to the adoption of the STI Plan.

"Participant" means, as to any Performance Period, any Employee who is selected by the Committee to be eligible to participate in the STI Plan for that Performance Period, as provided herein.

"Payout Formula"means the formula established by the Committee for determining Award Opportunities for a Performance Period based on the level of achievement of the Performance Objectives for the Performance Period.

"Performance Objectives" means the measurable or subjective performance objective or objectives established pursuant to this STI Plan for Participants who have received Award Opportunities. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of a Subsidiary, division, business unit, department, region or function within the Company or Subsidiary in which the Participant is employed ( i.e., "team objectives") or in terms of the performance of the individual Participant ( i.e., "individual objectives") and may be based on the following criteria: earnings per share, operating income, revenues, operating margin, profit margin, return on assets, return on equity, return on invested capital, financing, credit ratings, redeployment of capital, cash flow, shareholder value, economic value added, shareholder return (measured in terms of stock price appreciation) and/or total shareholder return (measured in terms of stock price appreciation and/or dividend growth), new customers, cost controls, operating efficiencies, product development, strategic partnering, research and development, market penetration, geographic business expansion, cost targets, productivity, employee satisfaction, management of employment practices and employee benefits, supervision of litigation or labor negotiations, dealings with regulatory bodies, acquisitions or divestitures, delivery cost per kilowatt hour or delivery cost per millions of cubic feet of natural gas, customer satisfaction, program development, frequency or duration of electric or gas service interruptions, number of or severity of gas leaks, avoidance of environmental, public or employee safety problems, realization of the regulated return on equity, and/or strategic business criteria related to a Participant's area or areas of responsibility. The Performance Objectives may be made relative to the performance of other corporations or entities.

"Performance Period" means the Company’s fiscal year or such other period as determined by the Committee in its discretion, within which the Performance Objectives relating to an Award Opportunity are to be achieved. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

"STI Plan" means this CH Energy Group, Inc. Short-Term Incentive Plan, as amended from time to time.

"Subsidiary" means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

3.               Administration. The Committee shall be responsible for administration of the STI Plan. The Committee, by majority action, is authorized to interpret the STI Plan, to prescribe, amend, and rescind regulations relating to the STI Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company and its Subsidiaries, and to make all other determinations necessary or advisable for the administration of the STI Plan, but only to the extent not contrary to the express provisions of the STI Plan.

Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the STI Plan shall be final, binding and conclusive for all purposes and upon all Participants. No member of the Committee shall be liable for any such action or determination made in good faith. The Board (acting solely by the independent directors as identified under the applicable exchange listing standards) may perform any function of the Committee hereunder, in which case the term "Committee" shall refer to the Board.

4.              Eligibility . The Committee, in its sole discretion, shall determine which Employees will be eligible to participate in the STI Plan for any given Performance Period. When making this determination, the Committee shall consider the recommendations of the Chief Executive Officer. Eligible Participants shall be designated by the Committee either before or within 90 days following the beginning of the Performance Period. An Employee who is a Participant for a given Performance Period is neither guaranteed nor assured of being selected for participation in any subsequent Performance Period.

a.         No later than the first 90 days following the beginning of each Performance Period, the Committee shall establish the Award Opportunity for each Participant, including the applicable Performance Objectives and Payou