Commentary: Nothing good about CH-Fortis deal

By Maurice Hinchey

I am very concerned about the proposed acquisition of Central Hudson by the Canadian holding company Fortis, Inc. In the interests of New Yorkers and the future of our great state — especially the mid-Hudson region — it should be rejected.

In my thirty eight years as an elected public official — first in the New York State Assembly and then in the U.S. House of Representatives — I have fought hard for fairness for working families, particularly concerning the necessities of life, including utility matters before the Public Service Commission.

Maurice Hinchey. (Photo by Dan Barton)

Maurice Hinchey. (Photo by Dan Barton)

To establish the development of the renewable energy industry as a promising source of jobs and clean electricity for New Yorkers, I developed many programs, including a solar energy consortium in the Mid-HudsonValley. I am now fighting to protect our communities and our nation from hydraulic fracturing, the highly controversial method of extracting natural gas from shale deposits. If “fracking” comes to New York, experience has proven to us that it will endanger our health and despoil the natural world around us.


The merger agreement contains not one word about renewable energy or investments in the grid that would support an expansion of sustainable sources. In fact, Fortis has publicly disclosed that its energy strategy is tied to continued reliance on fossil fuels, particularly fracked gas.

Fortis CEO and President Stanley Marshall, in a speech in November 2012, told the Toronto Board of Trade that “shale gas is a game-changer not only for the gas industry but for the electricity industry as well.”

On its website, Fortis forecasts its profitability as contingent on, among other things, “the current environment of low natural gas prices and an abundance of shale gas reserves [which] should help maintain the competitiveness of natural gas versus alternative energy sources in North America.”

Instead of supporting the growth of renewable, sustainable energies which will create new jobs and continue New York’s legacy of environmental leadership, Fortis wants to use “community development” funds for a “pilot program” to move its customers from oil to natural gas — for the benefit of the company.

Moreover, the entire amount of community benefit funds that are offered — $5 million over five years — is barely 20 percent of what the top executives of Central Hudson stand to earn immediately from the sale of their stock and substantial “termination” agreements.

This merger will take us backward, not forward. A company that sees fracked shale gas as the high road to the future — and as a necessity for its own survival — is not a company that we want to put in charge of energy distribution in the mid-Hudson Valley or anywhere in New York State.

New York indeed, has been a world leader in environmental protection and innovation.

It has been my special privilege to serve the state that was the first in the world to require permanent protection for wilderness areas, and the first in the nation to establish a conservation law. To protect our beautiful lands and waterways, as well as the health of our river life and people, we forced the cleanup of the PCBs that had been deposited into the Hudson River by a corporate polluter that refused to take responsibility for the environmental consequences of its actions.

Likewise, the proposed acquisition of Central Hudson by Fortis, Inc., would undo much of the progress we made here in recent decades.

Fortis has a dismal track record in its operations elsewhere — in the country of Belize, where the company pushed through a controversial hydroelectric dam over strong environmental objections; and in the Canadian province of British Columbia, where Fortis was cited by the Ministry of Forests for violations of the Forest Practices Code, and for negligence related to a fire near Vaseux Lake in British Columbia.

Economically, it is a bad deal as well. Based on Fortis’s past practices in Canada, and the fact that the deal would provide only a two-year guarantee for the jobs of Central Hudson’s unionized workers, we can expect that the company will make increased use of contractors and that good local jobs will be lost — along with the expertise we need to protect and improve the distribution grid.

The other “public benefits” that the company offers turn out to be illusory or vague. There is a “one-year rate freeze” that is meaningless, since Central Hudson has not requested an increase, and approval generally takes approximately eight months. The promised write-offs for storm damages are based on incomplete information about actual damages, which, in addition, could be largely covered by federal funds.

And because Fortis’s credit rating is worse than Central Hudson’s, the cost of borrowing will substantially increase the $660 million of repairs and improvements that the utility has revealed will be needed over the next five years.

According to New YorkState law, the Public Service Commission is prohibited from approving the sale of any utility unless such sale serves the public interest. In this case, the so-called benefits are small and short-term, and the long-term dangers are immense.

It is to the credit of the PSC that it took the unusual step, in response to growing public opposition, of extending the public comment to May 1, and of holding two additional public hearings. The PSC has now also announced that it will make a Recommended Decision, so that the public and its representatives, as well as all parties to the deal, will have a further opportunity to make their views known. I thank you for that.

Meanwhile, as the commissioners are aware, the Ulster County Legislature, the City of Newburgh, and at least eight towns and villages in the Central Hudson service area have all voted against the proposed takeover, with not a single dissenting vote.

Other municipalities are considering passing similar resolutions.

The IBEW 320, Hudson Valley Area Labor Federation, SEIU 200, the Sierra Club,  Citizen Action and the AARP have all come out against this distasteful deal. At four public hearings, not a single individual spoke in favor of this deal. It has become very apparent that there is nothing good about this deal.


Surely, in a democratic society such as ours, the decision as to what constitutes “public benefit” is not unrelated to the will of an informed public and its elected representatives.

I thank the Public Service Commission for the thoroughness of its process, and strongly urge the Commission to reject this Central Hudson/Fortis deal, which is clearly not in the best interests of the citizens of the HudsonValley and New YorkState.


The writer is a former U.S. congressman and state Assembly member.

There is one comment

  1. Ron

    Why is it alright for U.S. companies to take over Canadian companies – but not the other way around ?

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