CH Energy Group Issues Second-Quarter Earnings Results

(Poughkeepsie, NY) CH Energy Group, Inc. (NYSE:CHG) earned 43 cents per share for the second quarter of 2010, as compared to the 9-cent loss that was posted during the same period of 2009. Earnings for the first six months of 2010 totaled $1.72 per share, as compared to the $1.37 per share earned during the first half of 2009.

“Our earnings strongly recovered from the significantly depressed levels of 2009, continuing a trend that began with the delivery rate increase that took effect at Central Hudson in July 2009," said Chairman of the Board, President and C.E.O. Steven V. Lant. “These new rates were better aligned with our costs of providing service to customers, and they allowed Central Hudson to earn a more appropriate return.”

Central Hudson, which represents approximately 90 percent of CH Energy Group’s total assets, is a regulated transmission and distribution utility serving approximately 300,000 electric and 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley.
CH Energy Group released the following earnings results by business unit:

Central Hudson Gas & Electric Corporation
            Central Hudson earned 62 cents per share during the second quarter of 2010, up from 6 cents per share posted during the same period of 2009. For the first six months of 2010, the utility earned $1.66 per share, as compared to 84 cents per share posted during the first half of 2009, with the majority of the improvement credited to second-quarter results.

“While more appropriate delivery rates and revenue stabilization were the primary factors that improved earnings, we also continued to be very austere in our expense management, which contributed significantly to these strong results,” Lant said.

He noted that other items, including higher expenses associated with restoring electric service after storms, depreciation and taxes and the impact of unfavorable weather combined to partially offset the positive influences. Lant also said that the second-quarter results include deferred expenses associated with the extraordinary level of uncollectible accounts over the course of the rate year that ended June 30, 2010.

Griffith Energy Services
            Griffith Energy Services posted a loss of 10 cents per share during the second quarter of 2010, improved results from the 14-cent loss that occurred during 2009’s second quarter. “Owing to the seasonal nature of Griffith’s fuel oil business, we fully anticipated a loss during the period and we were encouraged to see progress as compared to a year ago,” Lant said. Half of the improvement was due to the 2009 partial divestiture. Additionally, better margins and lowered expenses help to offset a reduction in heating oil volumes and the impact that warmer weather had on sales.

For the first six months of 2010, Griffith posted earnings of 16 cents per share, down from the 50 cents per share earned during the first half of 2009. “Most of the difference is related to the divestiture of about 40 percent of Griffith that occurred in late 2009 as part of our strategic decision to reduce cash flow and earnings volatility,” Lant explained.

Other Businesses and Investments

            The other businesses and investments of CH Energy Group posted a loss of 9 cents per share during the second quarter, as compared to a loss of 1 cent per share during the same period of 2009.  This part of the business posted a loss of 10 cents per share during the first half of the year, as compared to earning 3 cents per share during the same period of 2009. The earnings from the Lyonsdale Biomass Plant in upstate New York were 4 cents per share lower for the quarter, due largely to the cost of a turbine overhaul that is expected to improve operating efficiency, as well as the expiration of a federal tax credit program at the end of 2009. Earnings were also reduced at the Cornhusker Energy Lexington Plant in Lexington, Neb.

Lant also said that CH Energy Group is reviewing its strategy with respect to the allocation of capital to renewable energy projects and has suspended making new investments in such projects pending completion of this review.

About CH Energy Group, Inc.: CH Energy Group, Inc. is a family of companies seizing new opportunities in the energy marketplace through two primary subsidiaries. Central Hudson Gas & Electric Corporation is a regulated transmission and distribution utility serving approximately 300,000 electric and about 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley, and 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.  Central Hudson Enterprises Corporation (“CHEC”), a non-regulated subsidiary, is the umbrella for a family of energy-related companies and investments focused primarily on fuel distribution and renewable energy.  Griffith Energy Service’s fuel distribution business supplies energy products and services to approximately 58,000 customers in five states and Washington, D.C. CHEC also has interests in several renewable energy projects in New York and other states.

Conference Call:  Mr. Lant will conduct a conference call with investors to review financial results at 2:00 p.m. (ET) today, July 30, 2010. Dial-in: 1-888-276-0005; Conference Name “CH Energy Group.” Supplemental materials will be posted to the Company’s Web site at www.CHEnergyGroup.com to assist participants in following the Conference Call presentation.  A digitized replay of the call will be available from 4:30 p.m. (ET) on July 30, 2010, until 11:59 p.m. (ET) on August 6, 2010, by dialing 1-800-475-6701 and entering access code 164409. In addition, the call will be webcast live in listen-only mode and available for replay for approximately 30 days within the Investor Relations section of the Company’s Web site at www.CHEnergyGroup.com

 Financial Statements Available Here

Forward-Looking Statements –

Statements included in this News Release and any documents 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 and its subsidiaries' future business prospects, revenues, proceeds, working capital, liquidity, income, and margins, 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: weather; fuel prices; corn and ethanol prices; plant capacity factors; energy supply and demand; interest rates; potential future acquisitions; developments in the legislative, regulatory, and competitive environment; 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 its subsidiaries 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.

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