Central Hudson Gas & Electric Corporation Files Rehearing Request.

ALBANY, N.Y. -- Central Hudson Gas & Electric Corporation has filed for rehearing on one element of the New York State Public Service Commission's recent order adopting a three-year rate agreement, noting that the Commission failed to update Central Hudson's allowed Return on Equity using the Generic Finance Case Methodology (as was applied in the case involving New York State Electric and Gas Corporation in its one-year rate order announced August 23, 2006). Central Hudson asserted in the filing that the Commission is obligated to make correct and consistent determinations of ROE for all utilities.

"The agreement adopted by the Commission set our allowed ROE at 9.6 percent, as compared to NYSEG's 9.55 percent allowed ROE in its rate case. However, our agreement prohibits us from filing another rate case for three years -- yet does not provide sufficient financial compensation for being constrained in this way," explained Senior Vice President Arthur R. Upright. In the filing, Central Hudson requested that a rehearing be conducted to revise its allowed ROE to 9.9 percent, which Upright said can be accomplished without customer bill impacts.

"The Central Hudson rate agreement that the Commission accepted on July 24, 2006, represented a reasonable settlement that balanced consumer protections with reimbursement for the necessary costs for doing business at a time when all customers have become increasingly dependent upon electricity and natural gas," Upright said. "We don't object to the vast majority of the order's detail, but do believe that the Public Service Commission should consistently and uniformly apply acceptable return policies among utilities operating in the state of New York."

The Central Hudson rate agreement was reached after an 11-month regulatory review in which 20 organizations became Active Parties to the case. It incorporated months of negotiations with several parties, including the Staff of the Public Service Commission and the Consumer Protection Board. Six public hearings were held, and the public was given opportunities to submit comments directly to the Administrative Law Judge presiding over the negotiations. Central Hudson also presented the details of the rate proposal, including the full testimony and exhibits, on its web site.

With the delivery rate increases, Central Hudson customers are projected to continue paying the lowest total electric bills in the state of the New York and natural gas bills that are near the statewide average. The agreement, which increased delivery rates for the first time in 13 years, will be phased in over a three-year period that began August 1, 2006. The typical residential customer who uses 500 kilowatt hours of electricity per month has seen an estimated increase of less than $3.50 per month as a result of the new delivery rates; by the end of the three-year period, that amount will total less than $10 per month. Typical residential natural gas heating customers have seen an increase of about $8 per month; the delivery rate increase will raise these bills by less than $16 per month by the end of the agreement's term.