Public Service Commission Approves New Central Hudson Delivery Rates

(Albany, NY) The New York State Public Service Commission approved new electric and natural gas delivery rates for customers of Central Hudson Gas & Electric Corporation at its meeting on July 19. The new delivery rates are the first increase in more than 13 years for Central Hudson customers, and will be phased in over three years beginning August 1, 2006. By the end of the phase-in period in 2009, customers' total electric bills will increase by approximately 11 percent and total gas bills by about 9.5 percent.

The approved rates were proposed to the Commission in April under an agreement reached by Staff of the New York State Public Service Commission, Central Hudson, Multiple Intervenors (a consortium representing large industrial users) and the United States Department of Defense (representing the United States Military Academy at West Point).

“We commend the Public Service Commission for approving the agreement, as it balances important initiatives that meet the region’s growing energy needs while ensuring that our customers continue to pay amongst the lowest delivery prices in the Northeast,” said Arthur R. Upright, Senior Vice President of Regulatory Affairs. A typical residential electric customer who uses about 500 kilowatt hours of electricity per month will see an estimated increase of less than $3.50 per month this year as a result of the new delivery rates; by the end of the three-year period, that amount would total less than $10 per month.

Upright estimated that a typical residential natural gas heating customers could expect to see a bill increase of about $8 per month in 2006; the delivery rate increase would raise these bills by less than $16 per month by the end of the three-year agreement. Total bills for natural gas customers should remain near the statewide average with the new delivery rate structure, he said.

“There were many substantial contributing factors in determining these new rates, including needed infrastructure improvements, general inflation, increased pension expenses, and enhancements to our safety, environmental and reliability improvement programs," explained Upright. "The new rates will provide necessary funds to cover increased costs, and the three-year phase-in period will prevent undue impacts on our customers.”

Highlights under the approved rate plan include an assistance plan for low-income customers who are experiencing financial difficulties in paying their energy bills; continued funding of programs to encourage customers to explore new opportunities available through the competitive energy supply market; a program to more effectively trim vegetation that could interrupt electric service; funding of expenses associated with safety and environmental programs, such as the clean up of former Manufactured Gas Plants and testing for stray voltage; and an established return on equity of 9.6 percent with the potential to share earnings above 10.6 percent with customers.

Central Hudson Gas & Electric Corporation serves approximately 363,500 customers in eight counties of New York State's Mid-Hudson River Valley, delivering natural gas and electricity in a 2,600-square-mile service territory that extends from the suburbs of metropolitan New York City north to the Capital District at Albany. It is a wholly owned subsidiary of CH Energy Group, Inc.

#          #            #