April 21, 2006
Mr. Michael Moran
Branch Chief
Division of Corporation Finance
U. S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0404
Re: CH Energy Group, Inc.
Form 10-K for the calendar year ended December 31, 2005 Filed March 30,
2006
File No. 333-52797
Dear Mr. Moran:
We are writing in response to your comment letter dated April 11, 2006 with
respect to the above referenced filing of CH Energy Group ("Energy Group").
Responses to each of your comments, with the text of each comment, are set forth
below.
Item 3 - Legal Proceedings, page 19
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1. We note that you merely make reference to disclosures included in the
financial statements. In future filings, please revise this item to include
disclosures related to the specific items requested under his heading. We note
that the section of the financial statements that you reference includes
disclosures concerning future purchases and legal matters that do not appear to
exceed the quantitative threshold for inclusion in this section.
In future filings, beginning with the quarterly report on Form 10-Q for the
period ended March 31, 2006, we will include required disclosures related to the
specific items requested under this heading.
-2-
Financial Statements
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Note 2 Regulatory Matters, page 105
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Non-Utility Land Sales, page 113
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2. We note from your disclosure that Central Hudson has filed Notices of Intent
with the PSC to sell 15 parcels of non-utility real property. Please tell us
whether you have classified these properties as held for sale. Additionally,
tell us what is the book value of the properties and whether you expect to
record a significant gain.
These properties have not been classified as held for sale. Their book value is
$333,000, which we deemed immaterial. The PSC has not completed a review of the
property sales, but once that review is complete Central Hudson will finalize
the sales. The magnitude of any gains on the sales is uncertain and depends on
several factors, including the results of the PSC review, the market value of
certain parcels at the time of sale, brokers fees and commissions and applicable
taxes.
Note 11 Commitments and Contingencies, page 135
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City of Poughkeepsie, page 138
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3. We note your disclosure concerning a lawsuit alleging Central Hudson was
negligent in supplying natural gas to a home in Poughkeepsie. Tell us whether an
accrual has been established for this matter and, if so, how much. If no accrual
has been established or if there is a range of additional possible loss in
excess of an accrued amount, tell us whether you have estimated a range of
reasonable possible loss. You indicate your insurance carrier was notified. Tell
us whether you have recorded any receivable related to expected recoveries in
the matter.
Central Hudson reviews legal matters with its outside counsel on a regular basis
and has concluded that the likelihood of liability in this matter is remote. No
accrual has been established and no receivables have been recorded for expected
recoveries.
-3-
In responding to these questions Energy Group acknowledges that:
* Energy Group is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to
the filing; and
* Energy Group may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
If you have any questions on the foregoing, please contact Donna S. Doyle, Vice
President - Accounting and Controller (845-486-5566).
Very truly yours,
Christopher M. Capone
Chief Financial Officer
CH Energy Group, Inc.