Schumer to regulators, who must approve Fortis’s purchase of CH Energy Group Inc.: consider effect on rates and quality of service before you give a green light

Today, U.S. Senator Charles E. Schumer sent a letter to the heads of both the Federal Energy Regulatory Commission (FERC) and Public Services Commission (PSC) urging the regulators to closely consider the effect on rates and quality of service that Fortis’s decision to purchase CH Energy Group, Inc. could have on Hudson Valley residents. Following last week’s announcement that Fortis Inc. intends to purchase CH Energy Group, Inc., parent company to Central Hudson Gas & Electric Company, Schumer wants to ensure that rate payers won’t be hit with higher rates or suffer a setback in the quality of service in the event the purchase is approved. Both FERC and PSC must sign off on the purchase agreement before it is approved. Throughout the process, Schumer is asking both regulators to put ratepayers front-and-center when considering the ramifications of the purchase. He is also asking the regulators to factor in the fate of 900 Central Hudson jobs that Schumer wants to see preserved under the new owner.

“Central Hudson customers throughout the Hudson Valley can ill afford to pay higher rates or suffer a setback in the quality of their utility service,” said Schumer. “We need to make sure that the new proposed owners aren’t going to jack up prices or cut back on service once this plan goes through. As FERC and the PSC consider whether allowing this purchase to take place, I’m asking that they put customers and ratepayers first, and ensure that they’re adequately protected before any contracts are signed.”

Central Hudson provides service to nearly 300,000 electric and 75,000 natural gas customers throughout the Mid-Hudson Valley, ranging from north of New York City to Albany. A new owner with the ability to set new rates and change service plans could result in significant changes for a huge number of New York families. Especially in light of the fact that some customers are still recovering from last year’s tropical storms, Schumer wants to ensure that ratepayers aren’t hit with another burden on their wallets if the deal is approved.

Schumer’s push marks his most recent effort to protect New York customers prior to and after proposed energy company utility mergers. Due to the serious potential cost and service effects that these agreements can have on customers, Schumer has long worked to represent the customer during such negotiations.

A copy of Schumer’s letter appears below:

 

Dear Chairmen Wellinghoff and Brown:

 

I write to express my concern regarding the recently proposed acquisition by Fortis, Inc. of CH Energy Group, Inc. As a primary energy supplier to residents of Mid-Hudson Valley region of New York, I would urge the Federal Energy Regulatory Commission (FERC) and Public Service Commission (PSC) to focus on this transactions potential impact on customers, particularly service quality and any change to energy rates.

CH Energy Group, Inc. is headquartered in Poughkeepsie, New York, services approximately 300,000 electric and 75,000 natural gas customers in eight counties of the Mid-Hudson Valley through their subsidiary Central Hudson Gas & Electric Corporation (Central Hudson). This is a 2,600 square mile service territory that extends from areas New York City to Albany, which encompasses a population of 680,000 delivering 5,180 gigawatt-hours of electricity and 18,154 million cubic feet of natural gas.

The proposed acquisition will have a direct impact on ratepayers in that region who have already been burdened with extended service outages during tropical storms Irene, Lee, and the more recent winter storm. As these storms have taught us, it is essential to make communication with customers a top priority. I urge the PSC and FERC to ensure that Fortis, Inc. keeps the lines of communication open and maintain customer satisfaction through the use of technology and text messaging to ensure that customers are kept informed, as Central Hudson has done in the past.

I urge FERC and the PSC to focus your investigation on this transactions potential impact on customers, particularly service quality and energy rates to ensure New York customers are protected. It is essential that Fortis keep a local contingency of customer service offices and professionals to deal with the litany of issues which are sure to arise as this transaction progresses. I also ask that Fortis, Inc. remain vigilant in ensuring repairs are conducted in an expedient time frame and that the the necessary resources and tools are available on the ground in the local communities to deal with any power outages or problems that arise in the future. Finally, I ask that you ensure that Fortis will protect the 900 good-paying jobs that Central Hudson currently provides.

Additionally, I have voiced my concern on behalf of New York customers prior to (and after) other proposed energy company-utility mergers within New York, due to the serious potential cost effects these agreements can have on customers.  Since the “customer” does not have a seat at the table when these agreements are being constructed, I find it necessary that their concerns and well-being are taken into consideration.