(Poughkeepsie, NY) First-quarter earnings for CH Energy Group, Inc. (NYSE:CHG) totaled $1.23 per share in 2008, down from the $1.38 per share earned during the first three months of 2007.

"We experienced a year-over-year quarterly reduction in earnings due in large part to the effect of higher energy supply costs and a weakening economy. Despite this, our core businesses continued to show signs of strength through the first quarter," explained Steven V. Lant, Chairman of the Board, President and C.E.O.

"Higher energy supply costs are resulting in higher total bills, inducing our customers to conserve, and sales volumes were noticeably affected. This conservation may also be influenced by the softening economy and lower consumer confidence," Lant said. 

In the case of Central Hudson, it further widened the gap between the sales forecast incorporated in the utility's current rate agreement, which set rates for electric and natural gas customers, and their actual usage.  In addition, Central Hudson's service territory experienced stormier weather this year, resulting in higher expenses to restore electric service. The combined effect of conservation and increased service restoration expenses depressed earnings per share by about 8 cents for the quarter, he said.

"Central Hudson customers also appear to be having more difficulty paying higher energy bills, and as a result, we increased our reserves for doubtful accounts. That depressed first-quarter earnings by about 5 cents," explained Lant.

"Despite the economic slowdown, we continue to add customers, albeit at a slower rate than in the past. We believe that is because Central Hudson's service territory has not yet experienced the extent of declining home prices or rising unemployment that have impacted other parts of the country," he said.

Earnings by business segment were as follows:

Central Hudson Gas & Electric Corporation

Central Hudson's contribution to earnings was 73 cents, 10 cents lower than that of the first quarter of 2007. In addition to the lower sales driven by what is believed to be additional price-induced conservation and higher expenses for storm restoration, Lant said expenditures for operations, taxes and tree trimming were also higher during the first quarter of 2008, contributing to the 10-cent differential in quarterly results.

"We continue to believe that the sales forecast adopted in our 2006 rate agreement did not accurately reflect the level of customer response to commodity price increases that began in late 2005 and was therefore overstated. This has added pressures to our operations in that we are not collecting enough revenue to earn our authorized rate of return, despite our best efforts to manage expenses," Lant noted. As a result, the utility expects to file a delivery rate increase request during the summer of 2008, which would take effect in mid-2009 if approved by the New York State Public Service Commission.

Griffith Energy Services

The Griffith fuel distribution businesses contributed 37 cents to earnings per share during the first quarter of 2008, compared to 40 cents during the same three months of 2007.  Acquisitions made in 2007 contributed 5 cents to the 2008 first-quarter earnings, and 4 cents were contributed by improved margins on petroleum sales and services. "But here again, conservation in reaction to higher energy prices reduced quarterly results, in this case, by an estimated 3 cents per share. The effects of warmer weather during the first quarter negatively impacted earnings by an additional 6 cents per share, and increased reserves for uncollectible accounts reduced quarterly results by 2 cents per share," Lant noted.

Other Businesses

Holding company CH Energy Group, Inc., Central Hudson Enterprises Corporation (CHEC) partnerships and other investments posted 13 cents toward quarterly results, down from 15 cents during the same period one year ago. Lower margins contributed to lower earnings from the Corporation's ethanol investment, but strong results from the Lyonsdale Biomass Plant, where the capacity factor improved dramatically quarter over quarter, offset that lower return. The remaining difference is due to interest earned on cash investments during the first quarter of 2007, investments which were subsequently utilized and unavailable in 2008.

2008 Earnings Projections

Lant reiterated the revised projection that CH Energy Group's 2008 consolidated annual earnings will total between $2.30 – $2.50 per share. Earnings expectations for individual business units are projected as follows: $1.80 – $ 1.90 per share from regulated utility Central Hudson Gas & Electric Corporation; 20 – 25 cents per share from Griffith fuel distribution; and 30 – 35 cents per share from holding company CH Energy Group, Inc., partnerships and other investments.

About CH Energy Group, Inc.

With more than 493,000 customers, 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 376,000 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, 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 117,000 customers in 10 states, stretching from Rhode Island to the Washington, D.C. area.  CHEC also has interests in a Lexington, Neb., ethanol plant, two wind power projects, a biomass plant in upstate New York, and plans to build a landfill gas energy facility in Auburn, NY, in 2008.

Conference Call:  Mr. Lant will conduct a conference call with investors to review financial results at 2:00 p.m. (ET) today, April 28, 2008.  Dial-in: 1-888-428-4480; 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 April 28, 2008, until 11:59 p.m. (ET) on May 5, 2008, by dialing 1-800-475-6701 and entering access code 918942. 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

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.