Part Two With CH Energy, Fortis Executives On Proposed Merger
There has been a brighter public spotlight lately on the proposed merger between Canadian energy company Fortis and Poughkeepsie-based CH Energy Group, parent of Central Hudson Gas and Electric Corporation. In response, top executives from both companies have been making the rounds, trying to allay concerns and separate fiction from fact. Here is part two of their interview with WAMC’s Hudson Valley Bureau Chief Allison Dunne.
Fortis would acquire CH Energy for some $1.5 billion. The beginnings of the deal were nearly one-and-a-half years ago, and both executives are hoping the New York State Public Service Commission issues its decision in June.
That’s Barry Perry, vice president, finance and chief financial officer of Fortis. He and Chairman, president, and CEO of CH Energy Group Steven Lant insist that CH Energy would continue to operate as a stand-alone company. The difference, says Perry, is one shareholder, Fortis, would replace 30,000 CH Energy shareholders. Despite such assurances, several lawmakers and others remain dubious. Some who oppose the deal have cited the potential use of the North American Free Trade Agreement, or NAFTA, by Fortis to circumvent PSC regulation. Perry says that is not the case, and that CH Energy would continue under PSC rules.
And opponents have said they want a greater commitment to alternative energy. CH Energy’s Lant says there is just so much he can do.
He says his company needs to improve its infrastructure, including hardening the system to weather future storms, and Fortis has the capital to make that happen. Here’s Perry.
Fortis and CH Energy filed with the PSC in January a joint proposal containing $50 million in customer benefits, and part of this includes money Fortis would pay to offset costs affiliated with previous storms.
Another concern of some involves a potential severance package for Lant and other top executives.
Two administrative law judges issued a recommended decision May 3, writing that they find it relatively easy to conclude that the benefits of the merger transaction pursuant to the Joint Proposal are outweighed by the detriments. It is an advisory opinion to be considered by the PSC. And in writing the conclusion, the judges note the intense opposition by some to the deal and the lack of response on the part of, particularly, Fortis. Ever since, both companies have embarked upon a major public relations campaign. Here’s Perry.
And here’s Lant.
Both Perry and Lant say the opposition, as well its intensity, did surprise them.
Their latest videos, fact sheet, and other information about the proposed deal are at centralhudson.com.
That was Steven Lant, chairman, president and CEO of CH Energy Group; along with Barry Perry, vice president, finance and chief financial officer of Fortis, Inc. The first part of this interview is available at wamc.org.