Why was Central Hudson a good fit for Fortis? “CH Energy’s regulated utility operations in New York State are similar to our regulated utility operations in Canada,” said the 60-year-old Marshall. He said the deal allowed Fortis to enter the American regulated electric and gas distribution business “with a reasonably sized utility.”
Central Hudson operates under cost-of-service regulation, allowing the company to earn a 10 percent return on equity in recent years. Its investments are expected to result “in attractive rate-base growth,” Marshall continued.
Starting as a modest utility in Canada’s Maritime Provinces, Newfoundland-based Fortis has gained “substantial experience” swallowing newly acquired utilities, such as major companies in Alberta and British Columbia, within the past decade. Now it’s ready to cross the U.S. border to add Central Hudson to its portfolio.
“We are extremely pleased to deliver compelling value to our shareholders and to become the first U.S.-based member of the Fortis federation of utility companies,” said CH Energy Chairman Steven V. Lant. The two executives also said that Fortis “will maintain the current level of funding for the philanthropic organizations across Central Hudson’s service territory.”
