I heard that Central Hudson is increasing rates because of insufficient sales – is that true?
It’s important to understand that utilities are regulated, and rates are designed to recover the largely fixed costs of owning, operating, and maintaining the electric and natural gas systems based on a forecasted level of sales. The sales forecast approved in the current rate agreement was based upon historical trends and assumed delivered energy volumes would be higher than has actually occurred. This has resulted in a shortfall in operating revenue, and means that Central Hudson is not earning sufficient revenues to cover its obligations to both customers and shareholders.
