Thursday, May 30, 2013

Robert F. Kennedy Jr. to NYPSC: Don't Approve Fortis Inc.'s Proposed Acquisition of Central Hudson

In a letter filed May 29, 2013 with the New York Public Service Commission, Robert F. Kennedy Jr. has asked the Commission to follow the recommendation of two Administrative Law Judges and disapprove the proposed acquisition of Central Hudson Gas and Electric Co. by Fortis, Inc., a Canadian holding company.  Citing Fortis' conduct in Belize, he stated:
My own experience with Fortis, Inc., has shown Fortis to be a corporation that pursues growth and expansion at the expense of, and with breathtaking disregard for, the people its utilities were created to serve.
Further, he questioned the future financial stability of Fortis:
There are other reasons why the PSC should be extremely skeptical about Fortis's capacity and appropriateness to be the owner of a New York State utility. Some of these are financial. Fortis may have begun as a hydroelectric company in Newfoundland, but it has long since become a holding company whose principal interests and motivations are financial. Its success is predicated on continuous expansion, with all the risks that inevitably accompany such a stragegy. The acquisition of Central Hudson, for $1.5 billion, including $500,000,000 in outstanding debt, financed by a $600,000,000 subscription, and producing almost $500,000,000 in goodwill, which cannot be used to raise rates, will place significant additional financial pressure on the company—pressure that will have to be relieved either by cutting costs, or by further expansionary tactics and new acquisitions, all of which will tend to reduce Fortis' already weak capacity to add anything, either financially or managerially, to the responsible evolution and strengthening of Central Hudson.
Mr. Kennedy's letter is available in the Public Comment section of the PSC case file in Case 12-M-0192


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