Central Hudson's 3-Yr Rate Plan Approved
The New York State Public Service Commission (the "PSC") today approved a new three-year rate plan for Central Hudson Gas & Electric Corporation, an indirect, wholly owned subsidiary of Fortis Inc. (FTS.TO) providing for critical system investments and customer service programs to meet the energy needs of the Mid-Hudson Valley.
Covering the period July 1, 2015 through June 30, 2018, the Rate Plan takes effect following a two‑year rate freeze that was agreed to as part of the utility's acquisition by Fortis. The allowed rate of return on equity under the Rate Plan is reduced from 10% to 9% and the utility's equity thickness remains at 48%. Sharing mechanisms with customers are also in effect should the actual ROE be higher.
The Rate Plan includes capital investments of approximately US$490 million during the three‑year period targeted at making the electric and natural gas systems stronger, smarter and better. Customers will now benefit from smart-grid investments in the electric distribution system that will utilize new technologies to increase automation, enhance the integration of distributed and renewable generation and improve grid efficiency. Natural gas system investments will include replacement of cast iron and bare steel gas mains on an accelerated basis in order to enhance safety and better protect the environment. Other investments include storm hardening, replacement of aging infrastructure and enhanced security measures for utility facilities.
The innovative programs included in Central Hudson's original proposal in support of the PSC's Reforming the Energy Vision ("REV") proceedings are under a separate review by regulators. A collaborative of stakeholders representing broad interests was formed to examine potential demonstration projects in support of REV, and a report detailing proposed projects was submitted by Central Hudson on May 1, 2015. Central Hudson's proposed non-wires alternatives project for targeted demand response, however, was approved as part of the Rate Plan.
