Edgar Filing: CENTRAL HUDSON GAS & ELECTRIC CORP

form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________

Commission File Number	Registrant, State of Incorporation Address and Telephone Number	IRS Employer Identification No.


0-30512	CH Energy Group, Inc. (Incorporated in New York) 284 South Avenue Poughkeepsie, New York 12601-4839 (845) 452-2000	14-1804460


1-3268	Central Hudson Gas & Electric Corporation (Incorporated in New York) 284 South Avenue Poughkeepsie, New York 12601-4839 (845) 452-2000	14-0555980

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.

CH Energy Group, Inc.	Yes þ		No o
Central Hudson Gas & Electric Corporation	Yes þ		No o

Indicate by check mark whether the Registrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

CH Energy Group, Inc.	Yes þ		No o
Central Hudson Gas & Electric Corporation	Yes þ		No o

Indicate by check mark whether the Registrants are a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

CH Energy Group, Inc.		Central Hudson Gas & Electric Corporation
Large Accelerated Filer þ		Large Accelerated Filer o
Accelerated Filer o		Accelerated Filer o
Non-Accelerated Filer o		Non-Accelerated Filer þ
Smaller Reporting Company o		Smaller Reporting Company o

Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act):

CH Energy Group, Inc.	Yes o		No þ
Central Hudson Gas & Electric Corporation	Yes o		No þ

As of the close of business on July 31, 2010 (i) CH Energy Group, Inc. had outstanding 15,823,371 shares of Common Stock ($0.10 per share par value) and (ii) all of the outstanding 16,862,087 shares of Common Stock ($5 per share par value) of Central Hudson Gas & Electric Corporation were held by CH Energy Group, Inc.

CENTRAL HUDSON GAS & ELECTRIC CORPORATION MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTIONS (H)(2)(a), (b) AND (c).

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2010

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1 – Financial Statements (Unaudited)

CH Energy Group, Inc.		PAGE
	Consolidated Statement of Income –
	Three and Six Months Ended June 30, 2010 and 2009	1

	Consolidated Statement of Comprehensive Income –
	Three and Six Months Ended June 30, 2010 and 2009	2

	Consolidated Statement of Cash Flows –
	Six Months Ended June 30, 2010 and 2009	3

	Consolidated Balance Sheet –
	June 30, 2010, December 31, 2009 and June 30, 2009	4

	Consolidated Statement of Equity –
	Six Months Ended June 30, 2010 and 2009	6

Central Hudson Gas & Electric Corporation
	Statement of Income –
	Three and Six Months Ended June 30, 2010 and 2009	7

	Statement of Comprehensive Income –
	Three and Six Months Ended June 30, 2010 and 2009	7

	Statement of Cash Flows –
	Six Months Ended June 30, 2010 and 2009	8

	Balance Sheet –
	June 30, 2010, December 31, 2009 and June 30, 2009	9

	Statement of Equity –
	Six Months Ended June 30, 2010 and 2009	11

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

	TABLE OF CONTENTS
		PAGE

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49

ITEM 3	Quantitative and Qualitative Disclosure About Market Risk	95

ITEM 4	Controls and Procedures	95

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	96

ITEM 1A	Risk Factors	96

ITEM 6	Exhibits	96

SIGNATURES		97

EXHIBIT INDEX		98

_______________________________________________

FILING FORMAT

This Quarterly Report on Form 10-Q is a combined quarterly report being filed by two different registrants: CH Energy Group, Inc. (“CH Energy Group”) and Central Hudson Gas & Electric Corporation (“Central Hudson”), a wholly owned subsidiary of CH Energy Group. Except where the content clearly indicates otherwise, any reference in this report to CH Energy Group includes all subsidiaries of CH Energy Group, including Central Hudson. Central Hudson makes no representation as to the information contained in this report in relation to CH Energy Group and its subsidiaries other than Central Hudson.

Table of Contents

PART 1 – FINANCIAL INFORMATION

ITEM 1 – Financial Statements (Unaudited)

CH ENERGY GROUP CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In Thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Operating Revenues
Electric	$	125,096		$	108,597		$	271,058		$	265,350
Natural gas		32,461			31,056			101,548			121,179
Competitive business subsidiaries:
Petroleum products		37,178			33,057			117,338			101,575
Other		7,042			5,909			14,475			12,612
Total Operating Revenues		201,777			178,619			504,419			500,716
Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		53,445			51,884			121,596			143,635
Purchased natural gas		14,754			19,301			52,402			84,126
Purchased petroleum		32,313			26,960			95,084			74,849
Other expenses of operation - regulated activities		50,191			44,390			107,894			90,711
Other expenses of operation - competitive business subsidiaries		13,270			13,148			27,574			28,087
Depreciation and amortization		9,957			9,319			19,881			18,686
Taxes, other than income tax		10,627			9,553			21,480			19,658
Total Operating Expenses		184,557			174,555			445,911			459,752
Operating Income		17,220			4,064			58,508			40,964
Other Income and Deductions
(Loss) income from unconsolidated affiliates		(532	)		(153	)		(298	)		77
Interest on regulatory assets and investment income		1,513			2,350			2,640			3,466
Write-off of note receivable		-			-			-			(1,299	)
Regulatory adjustments for interest costs		(107	)		(659	)		(248	)		(1,188	)
Business development costs		(499	)		(529	)		(802	)		(1,010	)
Other - net		150			(464	)		(36	)		(163	)
Total Other Income (Deductions)		525			545			1,256			(117	)
Interest Charges
Interest on long-term debt		5,649			5,094			11,257			9,874
Interest on regulatory liabilities and other interest		1,487			939			3,150			2,014
Total Interest Charges		7,136			6,033			14,407			11,888

Income (loss) before income taxes, non-controlling interest and preferred dividends of subsidiary		10,609			(1,424	)		45,357			28,959
Income Taxes		4,021			(436	)		18,054			10,993
Net Income (loss) from Continuing Operations		6,588			(988	)		27,303			17,966

Discontinued Operations
(Loss) income from discontinued operations before tax		-			(656	)		-			6,825
Income tax (benefit) expense from discontinued operations		-			(272	)		-			2,832
Net Income (loss) from Discontinued Operations		-			(384	)		-			3,993

Net Income (loss)		6,588			(1,372	)		27,303			21,959

Net income (loss) attributable to non-controlling interest:
Non-controlling interest in subsidiary		(419	)		(157	)		(385	)		(190	)
Dividends declared on Preferred Stock of subsidiary		242			242			485			485
Net income (loss) attributable to CH Energy Group		6,765			(1,457	)		27,203			21,664

Dividends declared on Common Stock		8,545			8,526			17,084			17,050
Change in Retained Earnings	$	(1,780	)	$	(9,983	)	$	10,119		$	4,614

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (CONT'D)
(In Thousands, except per share amounts)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010		2009			2010		2009
Common Stock:
Average shares outstanding - Basic		15,782		15,774			15,780		15,773
Average shares outstanding - Diluted		15,920		15,826			15,918		15,825

Income (loss) from continuing operations attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	0.43	$	(0.07	)	$	1.72	$	1.12
Earnings per share - Diluted	$	0.42	$	(0.07	)	$	1.71	$	1.12

Income (loss) from discontinued operations attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	-	$	(0.02	)	$	-	$	0.25
Earnings per share - Diluted	$	-	$	(0.02	)	$	-	$	0.25

Amounts attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	0.43	$	(0.09	)	$	1.72	$	1.37
Earnings per share - Diluted	$	0.42	$	(0.09	)	$	1.71	$	1.37
Dividends Declared Per Share	$	0.54	$	0.54		$	1.08	$	1.08

CH ENERGY GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
(In Thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Net Income (loss)	$	6,588		$	(1,372	)	$	27,303		$	21,959

Other Comprehensive Income:
Fair value of cash flow hedges:
Unrealized gains - net of tax of ($9) and ($13) in 2010 and ($38) and ($39) in 2009, respectively		13			57			18			58
Reclassification for gains realized in net income - net of tax of $11 and $35 in 2010 and $0 and $0 in 2009, respectively		(16	)		-			(52	)		-
Net unrealized gains recorded from investments held by equity method investees - net of tax of $0 and ($71) in 2010 and $0 and $0 in 2009, respectively		-			-			107			-

Other comprehensive income		(3	)		57			73			58

Comprehensive Income (loss)		6,585			(1,315	)		27,376			22,017

Comprehensive income (loss) attributable to non-controlling interest		(177	)		85			100			295

Comprehensive income (loss) attributable to CH Energy Group	$	6,762		$	(1,400	)	$	27,276		$	21,722

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In Thousands)

	Six Months Ended June 30,
	2010			2009
Operating Activities:
Net income	$	27,303		$	21,959
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		18,015			17,678
Amortization		1,866			2,607
Deferred income taxes - net		24,282			(11,916	)
Bad debt expense		420			8,216
Distributed (undistributed) equity in earnings of unconsolidated affiliates		602			550
Pension expense		16,030			6,352
Other post-employment benefits ("OPEB") expense		3,729			5,056
Regulatory liability - rate moderation		(9,948	)		-
Revenue decoupling mechanism		(1,362	)		-
Regulatory asset amortization		2,825			2,812
Loss (gain) on sale of assets		15			(39	)
Changes in operating assets and liabilities - net of business acquisitions:
Accounts receivable, unbilled revenues and other receivables		11,232			34,596
Fuel, materials and supplies		2,435			8,695
Special deposits and prepayments		1,351			(860	)
Prepaid income taxes		(9,055	)		-
Accounts payable		(6,165	)		(16,323	)
Accrued income taxes and interest		102			19,094
Customer advances		(7,499	)		(7,639	)
Pension plan contribution		(31,673	)		(6,850	)
OPEB contribution		(3,750	)		-
Regulatory asset - storm deferral		(16,673	)		-
Regulatory asset - manufactured gas plant ("MGP") site remediation		(7,858	)		(1,970	)
Regulatory asset - PSC tax surcharge and general assessment		482			-
Deferred natural gas and electric costs		3,959			30,912
Other - net		1,629			4,148
Net cash provided by operating activities		22,294			117,078

Investing Activities:
Proceeds from sale of assets		58			189
Additions to utility and other property and plant		(34,693	)		(66,162	)
Other - net		(2,703	)		(2,676	)
Net cash used in investing activities		(37,338	)		(68,649	)

Financing Activities:
Redemption of long-term debt		-			(20,000	)
Proceeds from issuance of long-term debt		-			50,000
Borrowings (repayments) of short-term debt - net		3,000			(35,500	)
Dividends paid on Preferred Stock of subsidiary		(485	)		(485	)
Dividends paid on Common Stock		(17,074	)		(17,046	)
Other - net		(101	)		(116	)
Net cash used in financing activities		(14,660	)		(23,147	)

Net Change in Cash and Cash Equivalents		(29,704	)		25,282
Cash and Cash Equivalents at Beginning of Period		73,436			19,825
Cash and Cash Equivalents at End of Period	$	43,732		$	45,107

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	11,517		$	10,172
Federal and state taxes paid	$	14,445		$	7,039
Additions to plant included in liabilities	$	2,964		$	5,113
Regulatory asset - storm deferral costs in liabilities	$	2,770		$	-

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In Thousands)
	June 30,		December 31,		June 30,
	2010		2009		2009
ASSETS
Utility Plant
Electric	$	934,309	$	908,807	$	888,772
Natural gas		286,016		281,139		274,251
Common		141,940		139,754		137,619
Gross Utility Plant		1,362,265		1,329,700		1,300,642

Less: Accumulated depreciation		387,556		375,434		379,502
Net		974,709		954,266		921,140

Construction work in progress		54,176		58,120		57,358
Net Utility Plant		1,028,885		1,012,386		978,498

Non-Utility Property & Plant
Griffith non-utility property & plant		28,492		27,951		42,724
Other non-utility property & plant		39,631		37,654		20,534
Gross Non-Utility Property & Plant		68,123		65,605		63,258

Less: Accumulated depreciation - Griffith		19,586		18,619		24,786
Less: Accumulated depreciation - other		4,165		3,333		2,634
Net Non-Utility Property & Plant		44,372		43,653		35,838

Current Assets
Cash and cash equivalents		43,732		73,436		45,107
Accounts receivable from customers - net of allowance for doubtful accounts of $7.6 million, $7.7 million and $9.1 million, respectively		83,192		94,526		94,872
Accrued unbilled utility revenues		9,132		14,159		8,542
Other receivables		7,619		6,612		7,371
Fuel, materials and supplies		22,406		24,841		27,890
Regulatory assets		68,881		59,993		35,601
Prepaid income tax		10,918		1,863		-
Fair value of derivative instruments		1,138		741		500
Special deposits and prepayments		19,987		21,290		22,255
Accumulated deferred income tax		1,269		300		21,851
Total Current Assets		268,274		297,761		263,989

Deferred Charges and Other Assets
Regulatory assets - pension plan		151,589		168,705		181,083
Regulatory assets - OPEB		-		-		7,682
Regulatory assets - other		101,944		83,691		93,831
Goodwill		35,651		35,651		67,455
Other intangible assets - net		13,678		14,813		34,045
Unamortized debt expense		5,000		5,094		4,937
Investments in unconsolidated affiliates		8,136		8,698		8,834
Other investments		12,035		10,812		9,559
Other		16,139		16,619		15,242
Total Deferred Charges and Other Assets		344,172		344,083		422,668
Total Assets	$	1,685,703	$	1,697,883	$	1,700,993

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (CONT'D) (UNAUDITED)
(In Thousands)
	June 30,			December 31,			June 30,
	2010			2009			2009
CAPITALIZATION AND LIABILITIES
Capitalization
CH Energy Group Common Shareholders' Equity
Common Stock (30,000,000 shares authorized: $0.10 par value; 16,862,087 shares issued) 15,823,371 shares, 15,804,562 shares and 15,789,759 shares outstanding, respectively	$	1,686		$	1,686		$	1,686
Paid-in capital		350,311			350,367			350,851
Retained earnings		236,118			225,999			221,248
Treasury stock - 1,038,716 shares, 1,057,525 shares and 1,072,328 shares, respectively		(43,668	)		(44,406	)		(45,059	)
Accumulated other comprehensive income		257			184			113
Capital stock expense		(328	)		(328	)		(328	)
Total CH Energy Group Common Shareholders' Equity		544,376			533,502			528,511
Non-controlling interest in subsidiary		1,000			1,385			1,258
Total Equity		545,376			534,887			529,769
Preferred Stock of subsidiary		21,027			21,027			21,027
Long-term debt		463,899			463,897			463,896
Total Capitalization		1,030,302			1,019,811			1,014,692
Current Liabilities
Current maturities of long-term debt		24,000			24,000			-
Notes payable		3,000			-			-
Accounts payable		40,732			43,197			36,621
Accrued interest		6,169			6,067			6,080
Dividends payable		8,787			8,777			8,769
Accrued vacation and payroll		6,939			6,192			7,528
Customer advances		14,951			22,450			22,803
Customer deposits		8,512			8,579			8,446
Regulatory liabilities		19,592			29,974			32,475
Fair value of derivative instruments		24,729			13,837			14,677
Accrued environmental remediation costs		8,398			17,399			8,950
Accrued income taxes		-			-			19,354
Deferred revenues		3,631			4,725			6,642
Other		13,892			17,814			15,258
Total Current Liabilities		183,332			203,011			187,603
Deferred Credits and Other Liabilities
Regulatory liabilities - OPEB		3,696			1,521			-
Regulatory liabilities - other		88,086			91,457			84,212
Operating reserves		4,413			4,756			4,620
Accrued environmental remediation costs		4,747			6,375			17,564
Accrued OPEB costs		44,879			46,241			54,298
Accrued pension costs		125,912			152,383			161,712
Other		13,726			14,245			12,104
Total Deferred Credits and Other Liabilities		285,459			316,978			334,510
Accumulated Deferred Income Tax		186,610			158,083			164,188
Commitments and Contingencies
Total Capitalization and Liabilities	$	1,685,703		$	1,697,883		$	1,700,993

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)
(In Thousands, except share amounts)

	CH Energy Group Common Shareholders
	Common Stock			Treasury Stock
	Shares Issued	Amount		Shares Repurchased		Amount			Paid-In Capital			Capital Stock Expense			Retained Earnings			Accumulated Other Comprehensive Income / (Loss)			Non-controlling Interest			Total Equity
Balance at December 31, 2008	16,862,087	$	1,686	(1,079,004	)	$	(45,386	)	$	350,873		$	(328	)	$	216,634		$	55		$	1,448		$	524,982
Comprehensive income:
Net income																22,149						(190	)		21,959
Dividends declared on Preferred Stock of subsidiary																(485	)								(485	)
Change in fair value:
Derivative instruments																			58						58
Dividends declared on common stock																(17,050	)								(17,050	)
Treasury shares activity - net				6,676			327			(22	)														305
Balance at June 30, 2009	16,862,087	$	1,686	(1,072,328	)	$	(45,059	)	$	350,851		$	(328	)	$	221,248		$	113		$	1,258		$	529,769

Balance at December 31, 2009	16,862,087	$	1,686	(1,057,525	)	$	(44,406	)	$	350,367		$	(328	)	$	225,999		$	184		$	1,385		$	534,887
Comprehensive income:
Net income																27,688						(385	)		27,303
Dividends declared on Preferred Stock of subsidiary																(485	)								(485	)
Change in fair value:
Derivative instruments																			18						18
Investments																			(52	)					(52	)
Reclassification adjustments for losses recognized in net income																			107						107
Dividends declared on common stock																(17,084	)								(17,084	)
Treasury shares activity - net				18,809			738			(56	)														682
Balance at June 30, 2010	16,862,087	$	1,686	(1,038,716	)	$	(43,668	)	$	350,311		$	(328	)	$	236,118		$	257		$	1,000		$	545,376

The Notes to Financial Statements are an integral part hereof.

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CENTRAL HUDSON STATEMENT OF INCOME (UNAUDITED)
(In Thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Operating Revenues
Electric	$	125,096		$	108,597		$	271,058		$	265,350
Natural gas		32,461			31,056			101,548			121,179
Total Operating Revenues		157,557			139,653			372,606			386,529

Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		52,649			51,242			119,523			141,765
Purchased natural gas		14,754			19,301			52,402			84,126
Other expenses of operation		50,191			44,390			107,894			90,711
Depreciation and amortization		8,422			7,989			16,836			15,998
Taxes, other than income tax		10,462			9,363			21,113			19,330
Total Operating Expenses		136,478			132,285			317,768			351,930

Operating Income		21,079			7,368			54,838			34,599

Other Income and Deductions
Interest on regulatory assets and other interest income		1,508			1,866			2,633			2,611
Regulatory adjustments for interest costs		(107	)		(659	)		(248	)		(1,188	)
Other - net		144			(543	)		(38	)		(373	)
Total Other Income		1,545			664			2,347			1,050

Interest Charges
Interest on other long-term debt		4,813			4,568			9,586			9,348
Interest on regulatory liabilities and other interest		1,488			1,323			3,151			2,761
Total Interest Charges		6,301			5,891			12,737			12,109

Income Before Income Taxes		16,323			2,141			44,448			23,540

Income Taxes		6,334			924			17,814			9,729

Net Income		9,989			1,217			26,634			13,811

Dividends Declared on Cumulative Preferred Stock		242			242			485			485

Income Available for Common Stock	$	9,747		$	975		$	26,149		$	13,326

CENTRAL HUDSON STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
(In Thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
Net Income	$	9,989	$	1,217	$	26,634	$	13,811
Other Comprehensive Income		-		-		-		-
Comprehensive Income	$	9,989	$	1,217	$	26,634	$	13,811

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CENTRAL HUDSON STATEMENT OF CASH FLOWS (UNAUDITED)
(In Thousands)

	Six Months Ended June 30,
	2010			2009
Operating Activities:
Net income	$	26,634		$	13,811
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		16,105			15,470
Amortization		731			528
Deferred income taxes - net		22,081			(13,394	)
Bad debt expense		70			5,122
Pension expense		16,030			6,352
OPEB expense		3,729			5,056
Regulatory liability - rate moderation		(9,948	)		-
Revenue decoupling mechanism		(1,362	)		-
Regulatory asset amortization		2,825			2,812
Changes in operating assets and liabilities - net:
Accounts receivable, unbilled revenues and other receivables		7,719			20,599
Fuel, materials and supplies		1,628			7,946
Special deposits and prepayments		2,652			1,261
Prepaid income taxes		(4,363	)		-
Accounts payable		(1,086	)		(12,702	)
Accrued income taxes and interest		103			15,974
Customer advances		(5,665	)		(2,985	)
Pension plan contribution		(31,673	)		(6,850	)
OPEB contribution		(3,750	)		-
Regulatory asset - storm deferral		(16,673	)		-
Regulatory asset - MGP site remediation		(7,858	)		(1,970	)
Regulatory asset - PSC tax surcharge and general assessment		482			-
Deferred natural gas and electric costs		3,959			30,912
Other - net		5,232			5,105
Net cash provided by operating activities		27,602			93,047

Investing Activities:
Additions to utility plant		(31,402	)		(60,389	)
Other - net		(2,811	)		(2,941	)
Net cash used in investing activities		(34,213	)		(63,330	)

Financing Activities:
Redemption of long-term debt		-			(20,000	)
Borrowings (repayments) of short-term debt - net		3,000			(25,500	)
Additional paid-in capital		-			25,000
Dividends paid on cumulative Preferred Stock		(485	)		(485	)
Other - net		(101	)		(118	)
Net cash provided by (used in) financing activities		2,414			(21,103	)

Net Change in Cash and Cash Equivalents		(4,197	)		8,614
Cash and Cash Equivalents - Beginning of Period		4,784			2,455
Cash and Cash Equivalents - End of Period	$	587		$	11,069

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	9,779		$	10,064
Federal and state taxes paid	$	8,910		$	7,417
Additions to plant included in liabilities	$	2,936		$	5,113
Regulatory asset - storm deferral costs in liabilities	$	2,770		$	-

The Notes to Financial Statements are an integral part hereof.

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CENTRAL HUDSON BALANCE SHEET (UNAUDITED)
(In Thousands)

	June 30,		December 31,		June 30,
	2010		2009		2009
ASSETS
Utility Plant
Electric	$	934,309	$	908,807	$	888,772
Natural gas		286,016		281,139		274,251
Common		141,940		139,754		137,619
Gross Utility Plant		1,362,265		1,329,700		1,300,642

Less: Accumulated depreciation		387,556		375,434		379,502
Net		974,709		954,266		921,140

Construction work in progress		54,176		58,120		57,358
Net Utility Plant		1,028,885		1,012,386		978,498

Non-Utility Property and Plant		681		681		441
Less: Accumulated depreciation		34		33		31
Net Non-Utility Property and Plant		647		648		410

Current Assets