CH Energy Group, Inc. : Fortis and Central Hudson File Settlement Agreement
28 Janeiro 2013 - 2:30PM
News Release
January 28, 2013
For Release: Immediately
Contact: CH
Energy Group: Denise D. VanBuren, (845)
471-8323
Fortis:
Donna Hynes, (709) 737-2800
Fortis and
Central Hudson File Settlement Agreement
Includes Substantive Customer Benefits and
Protections
(ALBANY, NY) Nearly $50 million to
fund customer and community benefits, plus a one-year electric
and natural gas customer delivery rate freeze, and customer
protections, including the continuation of Central Hudson Gas &
Electric Corporation ("Central Hudson") as a stand-alone
utility company, are cornerstones of a settlement of all issues
among the signatories (the "Settlement Agreement") filed with
the New York State Public Service Commission (the
"Commission") regarding the acquisition of Central Hudson, the
utility subsidiary of CH Energy Group, Inc.
("CH Energy Group") (NYSE:CHG), by Fortis Inc. ("Fortis")
(TSX:FTS). Other signatory parties to the
Settlement Agreement are the Staff of the New York State
Department of Public Service, Multiple Intervenors and
the Utility Intervention Unit of the New York State
Department of State. The Settlement Agreement indicates that the
acquisition is in the public interest pursuant to New York State
Public Service Law, Section 70, and therefore the aforementioned
parties recommend approval of the Settlement Agreement by the
Commission. Support was also received from several counties
for the portions of the Settlement Agreement of relevance to the
respective counties' interests. Closing of the acquisition is now
expected to take place during the second quarter of 2013, subject
to receiving approval from the Commission.
"This Settlement Agreement provides multiple and substantive
benefits to our customers and the communities we serve," said
Steven V. Lant, Chairman of the Board and President of
CH Energy Group. "The proposed terms also retain
substantial autonomy for Central Hudson, allowing us to continue
our mission of serving our customers well, while providing
opportunities to improve service through a close association with
the Fortis family of utility companies. We are pleased and
excited to have reached this step toward finalizing the transaction
with Fortis."
"Fortis worked closely with management of Central Hudson through
this thorough regulatory approval process and has gained increased
knowledge about the utility's operating philosophy and the
regulatory oversight requirements in New York State," said Stan
Marshall, President and Chief Executive Officer, Fortis
Inc. "This Settlement Agreement will provide tangible
benefits to Central Hudson's customers and will strengthen the
utility's ability to meet the energy needs of its current and
future customers."
The Settlement Agreement will moderate future customer rate
increases by providing $35 million to cover expenses that
normally would be recovered in customer rates, for example
significant restoration expenses related to Superstorm Sandy, the
October 2011 snowstorm and Tropical Storm Irene, and other similar
expenses. Also, under the terms of the Settlement Agreement,
Central Hudson customers will save a guaranteed $9.25 million over
five years resulting from the elimination of costs the utility now
incurs as a public company. Additionally, the Settlement
Agreement requires that customer delivery rates be frozen until
July 1, 2014 and requires the establishment of a $5 million
Customer Benefit Fund for economic development and low income
assistance programs for communities and residents of the Mid-Hudson
Valley.
Becoming part of the Fortis family of utilities, which currently
serve more than two million customers, will bring benefits to
Central Hudson, explained Lant. "Central Hudson will be in
the position to benefit from shared experiences and knowledge from
other Fortis utility companies, as all of us seek to continuously
improve our operations," he said. "In addition,
Fortis has greater access to capital that will enhance
Central Hudson's ability to make significant investments in
the electric and gas system to improve customer service and system
reliability, including those recommended in the Governor's Energy
Highway initiative."
Central Hudson will continue to maintain its name and Poughkeepsie
headquarters, as well as all of its employees and the utility's
substantial civic and community presence in the Mid
Hudson Valley. The Settlement Agreement also provides
financial protections for CH Energy Group, Central Hudson and
its customers as part of the larger Fortis organization, and
Central Hudson will continue to have annual independent financial
audits. Within one year, the Board of Directors of Central
Hudson will transition to a majority of independent directors,
increase members from the Hudson Valley and New York State, and
include representatives from Fortis.
"Fortis remains focused on closing the acquisition and providing
the benefits to Central Hudson customers as quickly as
possible," concluded Marshall.
The definitive merger agreement was announced between CH Energy
Group and Fortis in February 2012. CH Energy Group shareholders
approved the transaction in June 2012, and several other required
regulatory approvals by U.S. federal agencies were subsequently
received. For more information and to view the Settlement
Agreement, visit www.CentralHudson.com or
www.FortisInc.com.
#
# #
About CH Energy
Group
CH Energy Group, Inc. is an energy delivery company headquartered
in Poughkeepsie, NY. Regulated transmission and distribution
subsidiary Central Hudson Gas & Electric
Corporation serves approximately 300,000 electric and about 75,000
natural gas 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 north from
the suburbs of metropolitan New York City to the Capital
District at Albany. CH Energy Group also operates Central Hudson
Enterprises Corporation (CHEC), a non-regulated subsidiary composed
primarily of Griffith Energy Services, which supplies petroleum
products and related services to approximately 56,000 customers in
the Mid Atlantic Region.
About
Fortis
Fortis Inc. is the largest investor-owned distribution utility in
Canada, serving more than 2 million gas and electricity customers.
Its regulated holdings include electric utilities in five Canadian
provinces and two Caribbean countries and a natural gas utility in
British Columbia. It owns nonregulated hydroelectric
generation assets across Canada and in Belize & Upstate New
York. It also owns hotels and commercial real estate in
Canada.
FORWARD-LOOKING STATEMENTS
Statements
included in this news release and any document 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's and Central
Hudson's future business prospects, revenues, proceeds, working
capital, investment valuations, liquidity, income, and margins, as
well as the acquisition by a subsidiary of Fortis Inc. and the
expected timing of the transaction, 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: the possibility that various
conditions precedent to the consummation of the proposed Fortis
transaction will not be satisfied or waived, including regulatory
approvals of the proposed Fortis transaction and the timing and
terms thereof; the impact of delay or failure to complete the
proposed Fortis transaction on CH Energy Group's stock price; the
costs associated with the proposed Fortis transaction; deviations
from normal seasonal weather and storm activity; fuel prices;
energy supply and demand; potential future acquisitions;
legislative, regulatory, and competitive developments; interest
rates; access to capital; 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 Central Hudson 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.
For additional information, contact: |
CH Energy
Group, Inc.
Investors:
Mr. Stacey A. Renner
Treasurer
Telephone: (845) 486-5730
srenner@cenhud.com |
Media:
Ms. Denise D. VanBuren
Corporate Secretary & VP- Corporate Communications
Telephone: (845) 471-8323
dvanburen@cenhud.com |
Fortis
Inc.
Investors
Mr. Barry Perry
Vice President Finance and Chief Financial Officer
Fortis Inc.
Telephone: (709) 737- 2822 |
Media: Ms.
Donna Hynes
Manager, Investor and Public Relations
Fortis Inc
Telephone: (709) 737-2800 |
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: CH Energy Group, Inc. via Thomson Reuters ONE
HUG#1673569
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