Executives of Central Hudson Gas & Electric Corp. and Canadian energy company Fortis Inc. have issued a nearly 900-word response to U.S. Sen. Charles Schumer regarding the companies’ proposed merger.
Though two state administrative law judges on May 3 reported the merger’s negatives outweighed its benefits, the two utilities said they will press on with their $1.5 billion deal. The public letter to New York’s senior senator – which closes with an open invitation to meet – is the latest move in that effort.
It addresses Schumer’s concerns as to how the transaction will affect utility customers in the Hudson Valley and infrastructure and green energy investments and what preparations the companies are making for future storm disasters.
Steven Lant, chairman, president and CEO of Central Hudson, and Barry Perry, vice president of finance and CFO of Fortis, addressed those concerns.
They said the merger “will provide customers with $49.25 million in guaranteed benefits that will mitigate future rate pressure. Any future delivery rate decisions will continue under the well-established process of the New York State Public Service Commission for establishing customer rates, but with the benefit of this $49.25 million to offset or mitigate increases that would otherwise occur.”
The executives said that under Fortis ownership, Central Hudson “will continue to invest prudently in our electric and gas infrastructure to ensure continued reliable and safe service to customers. Central Hudson’s five-year capital plan calls for $660 million in capital expenditures, including infrastructure improvements, an automated distribution system, natural gas distribution expansion, storm-hardening measures, and service-enhancing expenditures.”
Fortis’s. they said, “will ensure that CH can raise the equity to make these necessary investments and will permit CH to participate in larger-scale electric and gas transmission projects than it otherwise could on its own.”
The executives assured Schumer that Central Hudson “will continue to play a leading role in the green and renewable energy arena” in line with state laws and energy policy. They noted that Fortis’s operating utility on Prince Edward Island has worked with provincial officials to connect the largest proportion of wind energy in North America.
Regarding storm preparations, Lant and Perry said that Central Hudson as part of its overall capital expenditures plan is engaged in projects such as flood prevention strategies for vulnerable substations. The Canadian company’s financial support “will assure Central Hudson’s ability to fund needed system improvements.”