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| 8-K - CENTRAL HUDSON GAS & ELECTRIC CORP 8-K 2-4-2010 - CENTRAL HUDSON GAS & ELECTRIC CORP | form8-k.htm |
News Release
February
3, 2010
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For
Release:
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Immediately
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Contact:
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John
Maserjian, (845) 471-8323
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Parties
Propose a Multi-Year Agreement for
New
Central Hudson Delivery Rates
(Albany,
NY) The Staff of the New York State Department of Public Service, Central Hudson
Gas & Electric Corporation and Multiple Intervenors (a consortium
representing large industrial customers) have reached an agreement and filed a
proposal for a multi-year rate plan that would phase in new electricity and
natural gas delivery rates for customers of the Poughkeepsie-based utility over
the next three years. The joint proposal comes as a result of Central Hudson's
July 2009 rate proposal, and would become effective July 1, 2010, if approved by
the Public Service Commission.
The joint
proposal would increase average (estimated in 2010-2011 to be 630 kilowatt-hours
per month) residential electric delivery charges by $2.56 per month in the first
year, $1.96 per month in the second year and $1.89 per month in the third year.
The average residential natural gas delivery charges would increase by $5.86 per
month in the first year, $2.73 per month in the second year and $2.02 per month
in the third year.
“Even
with the projected delivery rate increases, we believe that our customers will
continue to pay among the lowest electric bills in New York,” said Michael L.
Mosher, Vice President of Regulatory Affairs. “In addition, energy supply costs
remain significantly lower than last year – for example, natural gas supply
prices are currently 28 percent lower than year-ago levels, and electricity
supply prices are 21 percent lower. This could potentially offset the increase in delivery
charges and result in possible reductions in customers’ total bills compared to
those of last year – if energy supply prices remain lower.”
Taxes and
assessments are expected to comprise approximately 30 percent of total delivery
charges on customer bills, with property taxes alone representing approximately
40 percent of the proposed first year electric delivery rate increase and more
than 25 percent of the proposed first year gas delivery rate
increase.
“The
joint proposal gives us the opportunity to fund ongoing and needed investments
in the region’s electric and natural gas infrastructure; to recover expenses
associated with continued environmental compliance; address externally imposed
costs, such as rising property taxes; maintain service levels, including our
vegetation management program to reduce the incidence of service interruptions
due to tree contact with utility lines; and to continue important safety
programs, such as stray voltage testing,” Mosher continued.
Additional
highlights of the joint proposal include expansion of a program to assist
low-income customers who are experiencing financial difficulties in paying their
energy bills; continuation of a bill discount for customers receiving benefits
through the Home Energy Assistance Program; economic development programs to
retain and attract jobs for residents of the Mid-Hudson Valley; and an
authorized return on equity of 10 percent with the potential to share higher
earnings with customers.
“Central
Hudson is extremely cost conscious, and controls expenses by continuously
improving productivity and working more efficiently,” said Mosher. “Even with
such continued focus, however, a modest delivery rate increase is necessary to
keep up with general cost increases and to fulfill service
obligations.
“Central
Hudson has taken steps to minimize this rate request, particularly in these
difficult economic times. For example, more than $4 million in expense
reductions and savings were identified to reduce the proposed increase,” said
Mosher. Other measures to reduce costs include:
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An
austerity plan, implemented in 2009, to temporarily reduce operating
costs, which is incorporated in current rates and will save customers $3
million through June 2010.
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Productivity
improvements, for example: about 8-percent more customers were served by
Central Hudson with about 5-percent fewer employees in 2009 than in
2002.
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In
addition, the next phase of the Electric Bill Credit (EBC) would begin in July
2010 under the joint proposal. Approximately $20 million is expected to be
returned to customers through the EBC by June 2010, with additional credits of
$12 million and $4 million by June 2011 and June 2012, respectively. The EBC was
implemented in July 2009 to return $36 million to customers through a credit on
electric bills, phased over three years in decreasing amounts each year. The
credit appearing on bills with the next phases would decrease compared with the
prior phase, with the net effect of increasing average residential electric
bills by an additional $1.86 per month in the first year, $1.69 per month in the
second year, and $.79 in the third year.
The joint
proposal can be viewed at www.CentralHudson.com
under the Rates and Tariffs tab, or go directly to
www.CentralHudson.com/JointProposal.pdf.
# # #
Forward-Looking
Statements –
Statements
included in this News Release and any documents incorporated by reference which
are not historical in nature are intended to be, and are hereby identified as,
“forward-looking statements” for purposes of the safe harbor provided by
Section 21E of the Exchange Act. Forward-looking statements may
be identified by words including “anticipates,” “intends,” “estimates,”
“believes,” “projects,” “expects,” “plans,” “assumes,” “seeks,” and similar
expressions. Forward-looking statements including, without
limitation, those relating to CH Energy Group and its subsidiaries' future
business prospects, revenues, proceeds, working capital, liquidity, income, and
margins, are subject to certain risks and uncertainties that could cause actual
results to differ materially from those indicated in the forward-looking
statements, due to several important factors, including those identified from
time-to-time in the forward-looking statements. Those factors
include, but are not limited to: weather; fuel prices; corn and ethanol prices;
plant capacity factors; energy supply and demand; interest rates; potential
future acquisitions; developments in the legislative, regulatory, and
competitive environment; market risks; electric and natural gas industry
restructuring and cost recovery; the ability to obtain adequate and timely rate
relief; changes in fuel supply or costs including future market prices for
energy, capacity, and ancillary services; the success of strategies to satisfy
electricity, natural gas, fuel oil, and propane requirements; the outcome of
pending litigation and certain environmental matters, particularly the status of
inactive hazardous waste disposal sites and waste site remediation requirements;
and certain presently unknown or unforeseen factors, including, but not limited
to, acts of terrorism. CH Energy Group and its subsidiaries undertake no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise. Given
these uncertainties, undue reliance should not be placed on the forward-looking
statements.