EXHIBIT 99(i)9
FOR RELEASE: IMMEDIATELY
August 8, 2000
MEDIA CONTACTS:
Local News Media: Central Hudson: Denise D. VanBuren (845) 471-8323
Trade, Nat'l Media: Potomac Communications: Mimi Limbach (202) 466-7391
(202) 256-3210
CENTRAL HUDSON AND CO-OWNERS TO SELL FOSSIL-FUEL GENERATING PLANTS
TO DYNEGY INC. FOR $903 MILLION
Central Hudson Gas & Electric Corporation today announced that it, along
with Consolidated Edison Company of New York, Inc. and Niagara Mohawk Power
Corporation, have agreed to sell the Danskammer and Roseton electric generating
plants to Dynegy Inc. for $903 million. The plants are located in the Town of
Newburgh, Orange County, in the State of New York, and have a combined capacity
of 1700 megawatts.
"We are quite pleased with the sale and will apply Central Hudson's share
of the proceeds to benefit our customers and shareholders," said Paul J. Ganci,
Chairman of the Board, President and Chief Executive Officer of CH Energy Group,
Inc. [NYSE: CHG], Central Hudson's holding company parent.
"Customers will benefit in three ways. The gain from the sale of the
plants, when combined with other measures we have taken, will avoid any future
payments by customers, commonly referred to as 'competitive transition charges,'
in order to recover stranded costs. Secondly, the proceeds will further provide
Central Hudson with the additional funds to accelerate our programs to enhance
electric service reliability - without impacting customer prices. And, Central
Hudson customers will benefit from a transition power agreement which enables
Central Hudson to purchase varying amounts of electricity from the plants
through 2004," Ganci said.
He added that, " To a large measure, Central Hudson's success as a
low-cost generator was the result of the innovation, commitment, and
productivity of our employees at the plants, whose employment is protected under
terms of the sale agreement."
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The proceeds received from the sale will also benefit shareholders. "It
re-affirms and enhances the Company's strategy to reinvest and redeploy capital
at an accelerating pace in the acquisition of competitive energy services and
supply businesses in the Northeast," Ganci said.
Senior Vice President Ronald P. Brand, who headed the Central Hudson
auction team, also explained that as a delivery company, Central Hudson's
primary mission will be to safely and reliably deliver electricity that
customers have purchased in the competitive marketplace. "The transition power
purchase agreement will enable us to offer some element of electric price
stability during a three- to four-year period while those competitive markets
mature," he said.
He noted that the Company expects that the gain from the sale will enable
it to maintain delivery wire charges that are among the lowest in the region. At
the same time, Central Hudson will - with the approval of the New York Public
Service Commission - be investing to further enhance electric service
reliability.
"The sale agreement recognizes the contribution of our 200 employees at the
plants, and also provides protection for them," Brand said. Dynegy will retain
all unionized employees and will assume the current collective bargaining
agreement, and will make employment offers to most of the 40 management
employees. Those individuals not retained by Dynegy will be employed by Central
Hudson.
John Reed, Executive Director with Navigant Consulting, Inc., a leading
asset divestiture firm retained by Central Hudson to manage the auction,
attributed the successful sale to the productivity and the actions that Central
Hudson took over the last decade to consistently invest in the power plants to
maintain them at the highest level of operational and environmental performance.
"Central Hudson, its management team and the employees deserve the
lion's share of the credit for the high level of interest expressed by bidders
and for the competitive sales price offered by the winner," said Reed. "The
final price is the result of sound management and dedicated, committed employees
who operate the plants safely and effectively."
Central Hudson estimates that its share of the gross sale proceeds will be
about $695 million, and that its net proceeds, after taxes and transaction
costs, will be an estimated $450
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million. Included in these proceeds will be an earned auction incentive of
approximately $18 million, which Central Hudson, under its arrangement with the
Public Service Commission, will be entitled to retain for the benefit of its
shareholders.
According to Senior Vice President Arthur R. Upright, the sale of the
plants will require the approval of the Public Service Commission. Central
Hudson expects to file promptly for that approval and will propose to establish
a balanced and fair distribution to provide benefits to customers and
shareholders. Portions of the transaction will also require approval from the
Federal Energy Regulatory Commission and the Federal Trade Commission.
The sale will be made to comply with the Public Service Commission's 1996
and 1998 Orders to deregulate the electric utility industry in New York State.
The Commission required Central Hudson to sell, at auction, its fossil fuel
plants by July 2001. The sale is being made as a result of a competitive auction
process and is subject to regulatory approval. It is expected to close within
four to six months.
Navigant Consulting, Inc. served as financial advisor on the transaction.
Legal counsel was provided by Dickstein, Shapiro, Morin & Oshinsky, and the firm
of Gould and Wilkie.
ABOUT DANSKAMMER AND ROSETON:
The Danskammer plant consists of four generating units, constructed between
1951 and 1967, with a total generating capacity of 500 megawatts; Units 1 and 2
burn fuel oil and natural gas, while Units 3 and 4 burn coal and natural gas to
produce electricity. In addition, the site contains 5 megawatts of diesel
generators for use in restarting the main units. The two identical Roseton
units, which went on line in 1974, have a combined capacity of 1,200 megawatts
and produce electricity from burning fuel oil or natural gas. Central Hudson
currently owns 35 percent of the Roseton facility, while Niagara Mohawk Power
Corporation and Consolidated Edison Company of New York, Inc. own 25 and 40
percent, respectively.
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ABOUT CENTRAL HUDSON:
Central Hudson Gas & Electric Corporation is a combination natural gas and
electric utility serving a population of approximately 623,000 in a 2,600
square-mile area of the Mid-Hudson Valley, stretching from 25 miles north of New
York City to 10 miles south of Albany. Central Hudson serves parts of Albany,
Columbia, Dutchess, Greene, Orange, Putnam, Sullivan and Ulster counties. It is
a subsidiary of CH Energy Group, a family of energy generation and services
companies with holdings throughout the Northeast.
ABOUT DYNEGY INC.:
Dynegy Inc. [NYSE: DYN] is one of the country's leading energy merchants.
Through its leadership position in energy marketing, power generation,
transportation, gathering and processing, the company provides energy solutions
to its customers primarily in North America, the United Kingdom and Europe.
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