Central Hudson will continue working for approval of its proposed merger between parent company CH Energy Group Inc. and Canadian energy company Fortis Inc., despite a recent advisory opinion by the state Public Service Commission recommending against the deal in its current form.
“Together with Fortis, we intend to file exceptions regarding several conclusions in the recent recommended decision that are simply not supported by the record in the proceeding,” Steven V. Lant, chairman, president and CEO of CH Energy Group and Central Hudson’s chairman, said in a statement. “We welcome the opportunity to participate in further discussions with the Department of Public Service and other parties in order to gain approval of the merger agreement.”
Lant said the regional utility company believes the concerns expressed in the decision can be successfully resolved and that the transaction is still expected to close in this second quarter.
“As the Mid-Hudson Valley’s local utility company, Central Hudson recognizes the critical importance of providing superior customer service and supporting the communities we serve,” said Lant. “We also recognize that Fortis is a strong partner who supports these values and brings substantial, long-term benefits to our customers, our region and Central Hudson.”
The recent recommended decision by two administrative law judges confirmed the value of all of the proposed financial benefits to customers, CH said.
“In addition to avoiding the ongoing costs we would incur as a publicly traded company, the agreement provides $5 million in customer benefit funds to enhance economic development and low-income programs, and $35 million to offset costs normally paid for by customers, including those of recent storms,” Lant said. “These benefits are real, substantial and would not be available were it not for this merger agreement, as was noted in the recommended decision. Of great concern to us is that the decision did not recognize the nature and value of the stand-alone model under which Fortis utilities operate.”
Stan Marshall, president and CEO of Fortis, said his company model “places key decision-making authority at the local level – with existing employees and a board of directors with strong, local representation, thereby retaining Central Hudson’s close relationship with their customers and the communities they serve.”