Central Hudson is requesting a rate hike

Central Hudson is requesting a rate hike

In one of the stranger press releases I have read in a while, Central Hudson Energy Group (NYSE:CHG) states:

Higher energy costs induced our customers to use less energy… the weakening economy has further induced our customers to use less energy… As a result, we believe it is necessary and prudent to take two actions. First, we are reducing our earnings guidance for 2008, and second, we are filing a utility rate case to bring our revenues into line with the costs to serve our customers. (emphasis mine)

Which is interesting in a way. The stock holders of a publicly traded company expect a certain payout over time, the utility company does everything in it’s power to provide that payout, including reducing line men and support staff, ect. However, when the economy really hits the floor and people begin conserving electricity so they can still pay for it, it is time to ask for a rate increase. Nice. By the way, I am already paying ¢16.8/kWh. How much higher can it go?

This is the problem with a publicly traded utility company. The most important thing is not the customer or the quality of service, its the bottom line on a P&L. It is more important to the CEO and the board of directors to keep the stock value high so they can get their yearly bonus and retire to Martha’s Vineyard than to provide good, reasonably priced electrical service to the community.

So, what is a homeowner to do? If you have read this blog, you already know the answer to that. Take control of the situation and be your own power company. Photovoltaics are looking more and more competitive these days especially with the state incentives available. As energy prices continue to rise and PV prices either stay relatively the same or drop, the utility companies will find themselves competing head to head with renewable energy products. They may find that they are pricing themselves out of a customer.

Update: It looks like they are filing for 3.5% increase on electricity and 10% on natural gas.

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