ST. JOHN'S, NEWFOUNDLAND AND LABRADOR -- (Marketwire) -- 01/28/13 -- (TSX: FTS) - 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.
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