CH Energy Group Announces Third-Quarter Results

(Poughkeepsie, NY)  CH Energy Group, Inc. (NYSE: CHG) posted earnings of 34 cents per share during the third quarter of 2009, 16 cents higher than those of the same period last year. Year-to-date earnings for 2009 totaled $1.71, 20 cents higher than the same nine months of 2008.

“After two years of declining profitability at Central Hudson Gas & Electric, our largest subsidiary, we have begun to see a welcome recovery of our earnings to a level that should allow us to attract the investment capital needed to meet the needs of our utility customers,” said Chairman, President and Chief Executive Officer Steven V. Lant. 

“New electric and natural gas delivery rates and the Revenue Decoupling Mechanisms (RDMs) that took effect July 1, 2009, were essential in helping us to better recover rising operating expenses and achieve a higher level of shareholder return,” he said. Lant explained that the RDMs “allow us to more fully recover our costs and to actively promote conservation and energy efficiency without sacrificing financial stability.

“Customers who take advantage of opportunities to save energy will see the full benefit of their reduced consumption in both the delivery and supply portions of their bills.  We’re now offering a number of programs that actively promote energy efficiency, and additional opportunities are available through programs administered by the New York State Energy Research and Development Authority (NYSERDA),” he added.

Earnings by business unit were as follows:

Central Hudson Gas & Electric Corporation

            Third-quarter earnings at Central Hudson were 55 cents per share, up 18 cents from the third quarter of 2008, when the utility was operating under a rate agreement based on a revenue forecast that did not allow adequate recovery of the increasing costs of providing service. Lant said the positive effect on year-to-date earnings of the rate orders that took effect July 1, 2009, and July 1, 2008, as well as lower storm restoration expenses, was largely offset by higher expenses and lower sales. Year-to-date, the utility has posted $1.39 in earnings per share, an improvement of 4 cents over the same period last year.

            “There were several significant earnings pressures on the utility during the third quarter, including rising uncollectible accounts and increased taxes and depreciation,” Lant said. “While the rates that took effect July 1 have helped to restore our revenues to more satisfactory levels, on-going and increasing cost pressures must be addressed through our current rate case request.” That filing, made on July 31, 2009, and expected to take effect by July 1, 2010, would increase average residential bills by 3.7 percent for electric and 3.5 percent for natural gas customers, if approved as requested.

Griffith Energy Services

            Griffith posted a loss of 22 cents for the quarter, results that were 6 cents better than the third quarter of 2008 and largely attributable to strong operational oversight and cost containment.  “Due to the seasonal nature of Griffith’s fuel delivery business, a loss in the third quarter is entirely expected. What is more important to focus on is the strong performance by this business unit year to date: 28 cents in earnings, as compared to a loss of 8 cents at this same time last year. Higher margins, colder winter weather and cost management all were important positive factors, which more than offset the effects of customer conservation. These earnings represent this unit’s best performance yet and demonstrate its successful management under difficult business conditions,” Lant said.

Other Businesses and Investments

   Other business units posted 1 cent in earnings per share, down from 9 cents during the third quarter one year ago. Higher income taxes and interest expense contributed to the decline. Year to date, this segment has posted 4 cents in earnings, down 20 cents from the same period one year ago. “These results were largely driven by the impact of an extended maintenance outage at the Lyonsdale biomass plant, a reserve recorded in the first quarter related to a potential ethanol project and increased interest expense,” explained Lant.

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 74,000 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, 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 108,000 customers in 10 states, stretching from Rhode Island to the Washington, D.C. area.  CHEC also has interests in a Lexington, Neb., ethanol plant and several renewable energy projects in the Northeast.

Earnings Results Conference Call

Mr. Lant will conduct a conference call with investors to review financial results today at 2:00 p.m. Eastern Time. The dial-in number for the call is 1-800-230-1074, and the conference name is “CH Energy Group.” The call will also be Webcast live in listen-only mode, and can be accessed in the Investor Relations section of CH Energy Group's website at. Supplemental materials can be found here to assist participants in following the Conference Call presentation. A digitized replay of the call will be available from 4:30 p.m. Eastern Time on October 26, 2009, until 11:59 p.m. on November 2, 2009, by dialing 1-800-475-6701 and entering access code number 118289. The Webcast will also be available for replay for approximately 30 days.

Forward-Looking Statements –