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Times are difficult for many of us here in the Hudson Valley, and also across the nation. We understand. Rising costs for food, energy and nearly all of the goods and services upon which we all rely are having an impact on residents and businesses, and Central Hudson is no exception. As the region’s utility, we have an obligation to provide continuous, reliable electric
We have had tough choices to make about how to adequately fulfill our obligations to our customers and investors during these times of rising costs. We’ve reached a point where we must raise our rates in order to recover the costs of providing the level and quality of service that our customers expect and require, and to invest in the region’s electric and natural gas systems in order to meet rising energy needs and improve the reliability of service. This rate proposal is only the third made by Central Hudson in 15 years. This request comes from a need to safely and reliably operate our critical energy systems. Restoring electric service after damaging storms, improvements to the existing gas and electric system and construction of new facilities are all ways in which Central Hudson must serve the needs of our customers. As neighbors and a concerned local corporate citizen, we know times are tough for everyone, and we’re minimizing our request as much as possible. Central Hudson is controlling costs by continuously improving productivity and working more efficiently – we are a lean company and extremely cost conscious, and we took this step only because it was necessary. Under deregulation, Central Hudson purchases electricity and natural gas from the wholesale market on behalf of our customers, who pay the same energy commodity prices as we do. Although Central Hudson does not control the price of electricity or natural gas, we use a variety of purchasing methods, such as energy contracts, hedging and real-time purchases, to provide a measure of price stability in energy costs. While the market commodity prices for energy have risen recently, Central Hudson does not retain any revenues from energy supply sales. In fact, we only retain the delivery portion of the bill, which is stable, regulated and typically represents 30 to 40 percent of the total bill. This new rate proposal is for delivery, which funds our operations. This proposal includes energy efficiency programs to help our customers save energy, lower their bills and help protect the environment. On July 31, 2008, Central Hudson Gas & Electric Corporation filed a new rate plan with the New York State Public Service Commission. The rate proposal, if approved, would raise total overall electricity bills for all classes of customers by about 2.5 percent, and natural gas bills by about 10 percent at current market supply costs for energy. The typical residential customer might expect to see his/her total electric bill increase by 3.5 percent based on current market supply costs for electricity; or approximately $3.46 dollars per month; an average residential natural gas heating customer should expect to see about an 8 percent increase in total bills based on current market supply costs for natural gas, or about $14.70 per month when averaged over 12 months. These changes would take place in the summer of 2009, after an 11-month regulatory process that will include public hearings and other opportunities for interested parties to submit comments regarding the proposal. To view Central Hudson's filing letter and executive summary of the proposal, click here. Have questions? We have the answers.
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Also proposed are energy efficiency programs to help our customers better manage their energy use. In addition, the filing includes a revenue decoupling mechanism, that the Public Service Commission asked utilities to propose and which will break the link between sales and revenues, permitting Central Hudson to fully support customers’ steps to become more energy efficient.