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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15 (d)
of the Securities Exchange Act of 1934
Date of Report - December 22, 1998
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 1-3268 14-0555980
State or other (Commission File (IRS Employer
jurisdiction of Identification) Number)
incorporation number
284 South Avenue, Poughkeepsie New York 12601-4879
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (914) 452-2000
PART II - OTHER INFORMATION
Item 5. Other Events.
Former Manufactured Gas Plant Facilities. Reference is
made to Note 9, "Commitments and Contingencies", to the
Consolidated Financial Statements of the Registrant's Annual
Report, on Form 10-K (as amended by Amendment No. 1 on Form 10-K/A), for the
fiscal year ended December 31, 1997 ("10K Report"),
under the caption "Former Manufactured Gas Plant Facilities", and
to the similar caption in Part II, Item 1 of the Registrant's
Quarterly Reports, on Form 10-Q, for the quarterly period ended
June 30, 1998 and September 30, 1998, for a description of a
lawsuit filed by the City of Newburgh, New York (City) against
Registrant in the United States District Court in the Southern
District of New York, involving one of the Company's former
manufactured gas plant facilities.
The trial began November 30, 1998 and on December 18,
1998 the jury made its determination that the proper cost of
environmental remediation on the City's property is $20 million
and the Registrant's share is 80% (or $16 million). In addition,
the jury awarded the City $435,000 of damages for increased costs
of future operations of the City's sewage treatment plant due to
the existence of contamination.
The Court reserved to itself decision on the City's
allegations that Registrant violated certain provisions of the
federal Resource Conservation and Recovery Act and the federal
Emergency Planning and Community Right to Know Act. The extent
of exposure to the Registrant under these allegations cannot be
estimated. In addition the City's request for attorney's and
consultant's fees (estimated to be approximately $5 million) also
is yet to be determined by the Court.
The Court is expected to issue a decision on the
matters referred to in the immediately preceding paragraph in the
Spring of 1999. Upon issuance of such decision either party will
have 30 days to appeal the jury's decision and/or the Court's
decision.
Registrant and the City have stipulated that the
damages for clean-up costs awarded by the jury will be deposited
by the City into an interest earning account ("Clean-up Fund")
which, upon Court approval, shall be applied to the costs of the
environmental clean-up of the City's properties pursuant to the
related Order on Consent entered into by Registrant with the New
York State Department of Environmental Conservation ("NYDEC") (as
described under said caption "Commitments and Contingencies").
Any excess funds in the Clean-up Fund shall be retained by the
City. Within 45 days after any appeals become final in this
matter, the City may apply to the NYDEC to assume the
responsibilities of Registrant under said Order on Consent. If
the City does not so apply to NYDEC, or does apply and is not
accepted for substitution by the NYDEC, Registrant shall continue
to be responsible under said Order on Consent. In the event the
amount in the Clean-Up Fund is not sufficient to satisfy the
clean-up responsibilities under said Order on Consent, the party
responsible for the clean-up will be responsible for any excess
required to comply with said Order on Consent. As previously
reported in said Quarterly Reports, Registrant has also
voluntarily agreed to fund the costs of constructing the
clarifier at the City's sewage treatment plant, which is
estimated to cost $2.8 million.
At this time, Registrant can make no prediction as to
the full financial effect this matter will have on it, including
the extent, if any, of insurance reimbursement and including
implementation of environmental clean-up under said Order on
Consent. Registrant has received authorization from the New York
State Public Service Commission ("PSC") to defer certain costs
related to this matter, as described under said caption
"Commitments and Contingencies". Registrant can make no
prediction as to whether or not, or to what extent, if any, the
PSC will permit recovery of such costs through rates.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Registrant)
By: (SGD.) Donna S. Doyle
DONNA S. DOYLE
Controller
Dated: December 22, 1998
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