The
New York State Public Service Commission announced Thursday a decision on new electric and
natural gas delivery rates for customers of Central Hudson Gas & Electric Corporation. The new rates replace the expiring rate plan approved on July 24, 2006. According to the Public Service Commission, customers’ total electric delivery charges are projected to increase by approximately $3.95 cents per month, and total
natural gas delivery charges by about an average of $10.90 per month, on July 1, 2009. Central
Hudson will review details of the rate order when it is issued.
“The new rates apply to delivery charges only, which pay for the maintenance and operation of the natural gas and electric systems and various services, and typically represent about one-third to one-half of the total bill. However, market supply prices for electricity and natural gas, which are typically the largest component of bills, have declined sharply in recent months – and if the new delivery rates were effective today, based on the increases indicated by the Public Service Commission, the total typical bills for electricity and natural gas would likely be lower than they were a year ago; nearly 10 percent lower for electricity and 50 percent lower for natural gas than June of last year,” said Michael L. Mosher, Vice President of Regulatory Affairs. He added that Central Hudson has developed a suite of electric Energy Efficiency programs that offer financial incentives to help residents and businesses reduce their energy use, offering additional ways to save, and will soon offer similar incentives for natural gas efficiency measures.
The delivery rates also include natural gas and electric “revenue decoupling mechanisms,” as directed by the Public Service Commission, which breaks the link between sales and revenues and encourages full support of customers’ steps to become more energy efficient. The plan also incorporates an electric bill credit, initially proposed by Central Hudson, to effectively mitigate the impact of the new rates.
“After an 11-month review process and careful consideration of all the facts, the Public Service Commission agreed to this adjustment, which will allow Central Hudson to continue to serve customers reliably and safely, while considering the economic conditions we all face today,” said Mosher.
“We are sensitive to our customers’ concerns over rising costs, and have worked diligently to both reduce our operating expenses and increase our productivity,” said Mosher. “For example, our employees agreed to adjustments that will lower benefit costs by $75 million over the next five years, and we serve more customers with fewer employees than we did in 2006. Also, our recently filed austerity plan, which the Commission indicates is incorporated in the new rates, provides additional savings,” he said.
Mosher also indicated that the need for continued investment in the region’s electric and natural gas infrastructure, coupled with rising inflation, increased material and operating costs and higher taxes, would necessitate future, and potentially regular, rate filings. “These new rates are critical to our ability to serve our customers today, and despite our cost-conscious approach to managing our operations, ongoing infrastructure improvements and higher expenses may make future rate increases unavoidable,” he said.
Central Hudson Gas & Electric Corporation serves approximately 374,000 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.
