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DUFF & PHELPS CREDIT RATING CO. ADDS CENTRAL HUDSON GAS & ELECTRIC CORPORATION TO RATING WATCH -- UNFAVORABLE

 CHICAGO, March 30 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has added the fixed income securities of Central Hudson Gas & Electric to Rating Watch -- Unfavorable. Central Hudson Gas & Electric's securities are rated as follows: first mortgage bonds, secured medium- term notes, and collateralized pollution control revenue bonds `A-' (Single-A-Minus); non-collateralized pollution control revenue bonds `BBB+' (Triple-B-Plus); preferred stock `BBB' (Triple-B); and commercial paper Duff 1- (One Minus).
 On March 24 the New York Public Service Commission (PSC) Staff recommended a one percent decrease in electric rates based on a very low proposed 10.1 percent return on allowed equity. In November 1992, the company requested a 3.8 percent ($15.7 million) increase to cover new electric distribution facilities, recovery of FAS 106 costs, increased operating costs, higher taxes, and to offset electric sales declines.
 The company relies on International Business Machines Corp. (IBM) for most of its industrial sales. IBM operates three major plants within the company's service territory. Central Hudson Gas & Electric expects significant annual revenue losses as a result of IBM's downsizing efforts, which include significant workforce reductions and curtailment of certain operations. Revenues from residential and commercial customers are also likely to come under pressure as IBM reduces employment.
 In addition, credit protection measures may be negatively impacted near term by the recent fire at the 600 mw Roseton unit 2, of which Central Hudson Gas & Electric is the operator, and owns a 210 mw interest. The plant will be out of service for a minimum of several months. Insurance proceeds should cover a majority of repair costs. Nonetheless, cash flow may be somewhat constrained until insurance proceeds and monies from other co-owners are received.
 In the absence of adequate rate relief, the company's credit protection measures will be negatively impacted.
 Central Hudson Gas & Electric provides electric and gas service to an area in New York's mid-Hudson Valley.
 -0- 3/30/93
 /CONTACT: William A. Abrams of Duff & Phelps Credit Rating Co., 312-368-3112/
 (CNH)


CO: Central Hudson Gas & Electric Corporation ST: New York IN: UTI SU: RTG

SM -- NY059 -- 1082 03/30/93 13:18 EST
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Publication:PR Newswire
Date:Mar 30, 1993
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