Capitalization Long-Term Debt

12 Months Ended

Dec. 31, 2012

Capitalization - Long-Term Debt [Abstract]

NOTE 9 - Capitalization - Long-Term Debt

Details of CH Energy Group's and Central Hudson's long-term debt are as follows (In Thousands):

		December 31,
Series	Maturity Date	2012			2011
Central Hudson:
Promissory Notes:
2002 Series D (6.64%)⁽³⁾	Mar. 28, 2012	$	-		$	36,000
2008 Series F (6.854%)⁽⁵⁾	Nov. 01, 2013		30,000			30,000
2004 Series D (4.73%)⁽³⁾	Feb. 27, 2014		7,000			7,000
2004 Series E (4.80%)⁽⁴⁾	Nov. 05, 2014		7,000			7,000
2007 Series F (6.028%)⁽⁵⁾	Sep. 01, 2017		33,000			33,000
2004 Series E (5.05%)⁽⁴⁾	Nov. 04, 2019		27,000			27,000
1998 Series A (6.50%)⁽¹⁾	Dec. 01, 2028		16,700			16,700
2006 Series E (5.76%)⁽⁴⁾	Nov. 17, 2031		27,000			27,000
1999 Series B⁽¹⁾⁽²⁾	Jul. 01, 2034		33,700			33,700
2005 Series E (5.84%)⁽⁴⁾	Dec. 05, 2035		24,000			24,000
2007 Series F (5.804%)⁽⁵⁾	Mar. 23, 2037		33,000			33,000
2009 Series F (5.80%)⁽⁵⁾	Nov. 01, 2039		24,000			24,000
2010 Series A (4.30%)⁽⁶⁾	Sep. 21, 2020		16,000			16,000
2010 Series B (5.64%)⁽⁶⁾	Sep. 21, 2040		24,000			24,000
2010 Series G (2.756%)⁽⁶⁾	Apr. 01, 2016		8,000			8,000
2010 Series G (4.15%)⁽⁶⁾	Apr. 01, 2021		44,150			44,150
2010 Series G (5.716%)⁽⁶⁾	Apr. 01, 2041		30,000			30,000
2011 Series G (3.378%)⁽⁶⁾	Apr. 01, 2022		23,400			23,400
2011 Series G (4.707%)⁽⁶⁾	Apr. 01, 2042		10,000			10,000
2012 Series G (4.776%)⁽⁶⁾	Apr. 01, 2042		48,000			-
2012 Series G (4.065%)⁽⁶⁾	Oct. 01, 2042		24,000			-
			489,950			453,950


Less: Current Portion			(30,000	)		(36,000	)

Central Hudson Net Long-term debt		$	459,950		$	417,950

CH Energy Group:
Promissory Notes:
2009 Series A (6.58%)	Apr. 17, 2014	$	6,500		$	6,500
2009 Series B (6.80%)	Dec. 15, 2025		21,552			22,559

Less: Current Portion			(1,076	)		(1,006	)

CH Energy Group Net Long-term debt		$	486,926		$	446,003

(1)	Promissory Notes issued in connection with the sale by NYSERDA of tax-exempt pollution control revenue bonds.
(2)	Variable (auction) rate notes.
(3)	Issued pursuant to a 2001 PSC Order approving the issuance by Central Hudson prior to June 30, 2004, of up to $100 million of unsecured medium-term notes.
(4)	Issued pursuant to a 2004 PSC Order approving the issuance by Central Hudson prior to December 31, 2006, of up to $85 million of unsecured medium-term notes.
(5)	Issued pursuant to a 2006 PSC Order approving the issuance by Central Hudson prior to December 31, 2009, of up to $120 million of unsecured medium-term notes.
(6)	Issued pursuant to a 2009 PSC Order approving the issuance by Central Hudson prior to December 31, 2012, of up to $250 million of unsecured medium-term notes or other forms of long-term indebtedness.

Griffith had no third-party long-term debt outstanding as of December 31, 2012 or 2011.

Long-Term Debt Maturities

See Note 15 - "Fair Value Measurements" for a schedule of long-term debt maturing or to be redeemed during the next five years and thereafter.

On September 22, 2009, the PSC authorized Central Hudson to issue up to $250 million of long-term debt through December 31, 2012 to finance its construction expenditures, refund maturing long-term debt, and potentially refinance its 1999 NYSERDA Bonds, Series B. On November 20, 2009, Central Hudson registered a new series of notes, Series G, pursuant to the authority granted by the PSC. An amended registration statement was filed on December 23, 2009 and the registration of the Series G notes became effective on January 6, 2010.

On September 14, 2012, the PSC authorized Central Hudson to enter into a multi-year committed credit up to $175 million and to issue up to $250 million of long-term debt through December 31, 2015. The Order authorized Central Hudson to issue the long-term debt to finance its construction expenditures, refund maturing long-term debt, redeem existing callable debt and preferred stock, and refinance its 1999 NYSERDA Bonds, Series B.

NYSERDA

Central Hudson's outstanding Series B NYSERDA Bonds total $33.7 million at December 31, 2012. These bonds are tax-exempt multi-modal bonds that are currently in a variable rate mode. In its Orders, the PSC has authorized deferral accounting treatment for variations in the interest costs from these bonds. As such, variations between the actual interest rates on these bonds and the interest rate included in the current delivery rate structure for these bonds are deferred for future recovery from or refund to customers and therefore do not impact earnings.

To mitigate the potential cash flow impact from unexpected increases in short-term interest rates on Series B NYSERDA Bonds, on March 28, 2012, Central Hudson purchased an interest rate cap based on an index of short-term tax-exempt debt. The rate cap is two years in length with a notional amount aligned with Series B and will expire on April 1, 2014. The cap is based on the monthly weighted average of an index of tax-exempt variable rate debt, multiplied by 175%. Central Hudson would receive a payout if the adjusted index exceeds 5.0% for a given month. The rate cap replaced an expiring rate cap with substantially similar terms. See Note 14 – "Accounting for Derivative Instruments and Hedging Activities" for fair value disclosures related to this instrument.

Central Hudson is currently evaluating what actions, if any, it may take in the future in connection with its Series B NYSERDA Bonds. Potential actions may include converting the debt to another interest rate mode or refinancing with taxable bonds.

Debt Expense

Expenses incurred in connection with CH Energy Group's or Central Hudson's debt issuance and any discount or premium on debt are deferred and amortized over the lives of the related issues. Expenses incurred and unamortized costs written off on redemptions of Central Hudson's debt prior to maturity have been deferred and are amortized over the remaining lives of the related extinguished issues, as directed by the PSC.

Debt Covenants

CH Energy Group's $28.1 million of privately placed notes require compliance with certain restrictive covenants including maintaining a ratio of total consolidated debt to total consolidated capitalization of no more than 0.65 to 1.00 and not permitting certain debt, other than the privately placed notes, associated with the unregulated operations of CH Energy Group to exceed 10% of total consolidated assets. Currently, CH Energy Group is in compliance with all of these debt covenants.

CENTRAL HUDSON GAS & ELECTRIC CORP 10-K