FOR IMMEDIATE RELEASE
CONTACT : Susan Gillespie, 845-658-9820
Jennifer Metzger, 845-658-8967
Manna Jo Greene, 845-807-1270
Dawn Meola, 845-658-3036
Dan Duthie, 845-988-0453
Citizens for Local Power, the grass-roots group formed in opposition to the proposed acquisition of Central Hudson by Canadian holding company Fortis, Inc., will put forward additional demands at two press conferences, in Poughkeepsie on Wednesday, April 17, and in Kingston on Thursday, April 18, at 6:00 p.m., prior to public hearings scheduled by the Public Service Commission (PSC), which begin at 7:00.p.m. The group, which originated in Rosendale, has been working to create greater transparency concerning the details of the proposed deal, and to shed light on the environmental record and strategic planning of Fortis, Inc., Canada’s largest privately held utilities company.
Utilities attorney Dan Duthie, who is advising Citizens for Local Power, points out that in contrast to other recent cases no evidentiary hearing has been held in Case 12-M-0192, the Fortis acquisition of Central Hudson. This is highly unusual since all of the last four major gas and electric cases (National Grid acquisition of Niagara Mohawk Power Corporation – Case 01-M-0075, 2001; Energy East acquisition of NYSEG and RGE – Case 01-M-0404, 2002; National Grid acquisition of KeySpan – Case 06-M-0878, 2007; Iberdrola acquisition of Energy East (NYSEG & RGE), 2008) have had evidentiary hearings, allowing the public to respond to all arguments both for and against the proposed acquisition.
This would be particularly important since two of the parties to the negotiation, Labor union IBEW 320 and the Public Utility Law Project (PULP), formally oppose the Joint Proposal. Labor opposition is quite unusual, indeed unique among recent utility acquisitions. Moreover, the county executives of Ulster and Dutchess, the two counties most immediately impacted, approved only portions of the deal.
Citizens for Local Power also urges the PSC to issue a Recommended Decision, which would make the terms of any final deal available for public examination and response before it becomes law. Duthie points out that “currently there is no evidentiary record, and the PSC has not indicated that it plans to issue a Recommended Decision. Without this public testimony, there is no documentation to explain why the terms of the Joint Proposal meet the Public Interest standard under Section 70 of the Public Service Law, which is the legal requirement for merger approval. If the Commission approves such a transaction on this non-record, no one will have a chance to understand or comment on the rationale until it is too late.” A Recommended Decision might also offer opportunities to improve the outcome for the region. Duthie points out that “in the last major electric and gas merger proceeding, Iberdrola’s acquisition of Energy East, a Recommended Decision was issued explaining why the Commission should withhold approval for the merger. Eventually, the Commission conditioned the approval of the merger on greater benefits for New York, specifically enhanced investment in wind generation.”
Compared with other deals that were approved, the Central Hudson acquisition proposal includes few if any benefits, says Duthie: “The Recommended Decision should explain why all past merger approvals were conditioned on significant ratepayer benefits by way of rate reductions and multi-year rate freezes in the range of hundreds of millions of dollars, while in this case there are no immediate ratepayer benefits. The only benefits that are presented come in the form of accounting credits for some future incorporation into rates.”
Speaking on behalf of Citizens for Local Power, Rosendale resident Susan H. Gillespie pointed to financial issues that would have to be addressed in a Recommended Decision. “Because Fortis, Inc.’s, credit quality is weaker than Central Hudson’s, Central Hudson could suffer financial harm if it is taken over by Fortis. Central Hudson CEO Stephen Lant has estimated that the company needs to invest $660 million over the next five years to catch up with needed capital work on the electricity grid. If Central Hudson’s credit rating slips as a result of the merger, the difference in borrowing costs alone could outweigh the less than $10 million that the deal ‘guarantees’ to Central Hudson over the next five years—‘guarantees’ that are actually non-cash accounting accruals rather than real future benefits for customers.” “What’s more,” said Gillespie, “the so-called savings are meant to result in large part from the fact that Fortis, as a Canadian company, will no longer have to report as a public company. This amounts to a reduction of regulatory oversight, which is not exactly a guarantee of future financial benefit to the rate-payers.”
Citizens for Local Power also argue that the takeover would be detrimental to modernizing and diversifying the state’s energy system. “The Joint Proposal does nothing to advance the Governor’s energy plans to promote clean energy, distributed generation, micro grids, and the jobs that go with these technologies," said Jen Metzger, who chairs the Rosendale Environmental Commission and is a member of the Rosendale group. "There is not one word in the Joint Proposal even mentioning these technologies, much less promoting them.” Manna Jo Greene, a member of the group and also the environmental director of the Hudson River Sloop Clearwater, said, “It is time for our communities to take a stand for their economy, ecology and energy future. Given their history, the Fortis acquisition of Central Hudson will result in increasing electricity rates, outsourcing of local jobs, and will be a major step backwards, preventing the much needed transition to a green energy economy that we are poised to model here in the Hudson Valley.”
Citizens for Local Power and other opponents of the proposed Fortis acquisition are organizing a municipal consortium of villages, towns, cities, counties, and other organizations to join together as a party to this case and to ensure that their collective interests are well represented in PSC decision- making. Consortium members will combine efforts to ensure a rigorous review of the facts and an adequate public accounting of the reasoning behind any decision of the PSC on the proposed acquisition.
Labor unions and area non-profit organizations also have the opportunity to join the consortium. On April 10, the Town of Rosendale became the first town to adopt a resolution on joining the consortium.
The PSC decision to schedule two additional hearings, and to extend the public comment period from March 22 to May 1, came in response to the growing opposition to the takeover from towns and elected officials. To date, resolutions opposing the proposed acquisition by Fortis have been adopted unanimously by the Towns of Rosendale, New Paltz, Woodstock, Olive, and Marbletown, and by the Ulster County Legislature. State Assembly Member Kevin Cahill, State Senators Terry Gipson and Cecilia Tkaczyk, and thirteen Dutchess County legislators with party affiliations including Democratic, Republican, and Conservative, signed letters to the PSC calling for a rejection of the acquisition proposal. Opposition has also come from IBEW Local 320, from the Hudson Valley Area Labor Federation, and from the New York State chapter of the Sierra Club, among others.
Central Hudson’s service area includes 375,000 customers, affecting ca. 680,000 residents of Ulster, Dutchess, and Greene Counties, and parts of Albany, Columbia, Orange, Putnam, and Sullivan Counties.
The Poughkeepsie public hearing will be held in Common Council Chambers, Municipal Building (3rd Floor), 62 Civic Center Plaza (free parking available in parking garage); the Kingston hearing will be held in Council Chambers, Kingston City Hall, 420 Broadway.