Central Hudson Files Austerity Plan

(Albany, NY) Central Hudson Gas & Electric Corporation filed a mandated austerity plan with the New York State Public Service Commission today, under the guidelines of a statewide notice issued in May. The plan outlines further cost cuts proposed by Central Hudson through reduced capital expenditures and operating expenses that will provide savings to customers without causing immediate impacts to service, safety or reliability.

Measures include temporarily postponing approximately $20 million, or 20 percent, of planned capital expenditures for the year to reduce the associated carrying charges; lowering Research and Development expenses by $350,000; and freezing executive base salaries. The plan also proposes to temporarily scale-back distribution tree trimming by 20 percent and amend the cycle on stray voltage testing, a state-mandated program, for a combined savings of $2.6 million. “These reductions can be realized without immediately affecting safety or service reliability,” said Carl E. Meyer, President and Chief Operation Officer of Central Hudson.

“We recognize the economic environment facing local residents and businesses today, and this plan is designed to help provide a measure of relief for our customers when is comes to their energy bills,” said Meyer. “Importantly, these temporary reductions should not have an appreciable effect on the reliability or safety of the services we provide in the short term.”

If approved, the savings are proposed to be reflected as a credit on electric and natural gas bills for a 12-month period, after which these important initiatives would be reinstated. “Until the plan is approved, it will not be possible to determine the actual credit amount that would appear on individual customer bills,” noted Meyer.

“Central Hudson is already a lean company, and has been operating under severe financial constraints brought about by reduced sales volumes from what was contained in the 2006 rate plan,” said Meyer. “We’ve been meeting this challenge by lowering expenses wherever possible, and over the last few years have made significant strides in scaling back operating costs.” Meyer cited reductions in employee benefit costs projected to save about $75 million over five years; productivity improvements as measured by an increase of 7,600 new customers served by 35 fewer employees from 2006 to 2008; and various internal initiatives to improve operational efficiencies while lowering costs.

“Although we continue to search out ways to reduce costs while improving service, this new austerity plan will offer additional savings for our customers during these trying times,” he said.

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